A PROJECT REPORT ON

CONTEMPORARY ISSUES IN BANKING SECTORS

In partial fulfillment for the requirement of the project study course in two year fulltime masters of business administration programme of Gujarat University Submitted To:

N.R.Institute of business management Submitted By: Tejas Thakker [08111] Harshal Parikh [08071] Project Guide: PROF. Dr. Sneha Shukla

Batch: 2008-2010

N.R Institute of Business Management

Table of content
CHAPTER No. Preface Acknowledgement Executive Summary Research Methodology Objective 1 2 Introduction to the banking industry Industry analysis - S.W.O.T Analysis - Five Force Analysis - Pest Analysis 3 4 About State Bank of India Contemporary issues in banking sector ( 4.1) (4.2) (4.3) (4.4) (4.5) - Bank@home - Retail business development - Money laundering - Cheque truncation - Equator principle 47 59 78 90 107 21 27 30 35 1 2 3 PARTICULARS PAGE No.

5 6 7

Analysis Suggestions Bibliography

119 131 140

N.R INSTITUTE OF BUSINESS MANAGEMENT (GLS-MBA)

Certificate
This is to certify that Mr. Tejas Thakker Roll no 8111 and Mr.Harshal Parikh roll no.8071 students of N.R INSTITUTE OF BUSINESS MANAGEMENT (GLS-MBA) has successfully completed their project study on contemporary issues in banking sector in partial fulfillment of MBA Programme of Gujarat university. This is their original work and work has not been submitted elsewhere.

Dr Hitesh Ruparel Director in charge

Prof Dr Sneha Shukla core faculty,nribm& Project guide

PREFACE
Today banking industry plays a crucial role in development of Indian economy. Today with the growth of private sector banks public sector banks are also facing intense competition. It is time when banks need to redefine their role. We have taken this project to study contemporary issues in banking sector. We have taken five most recent happening issues in banking sector. Bank at home is an issue where banks will try to reach to our home and will provide personalized service. Under retail business development government banks will try to cross sell products with traditional banking products to generate more revenues. Today with the fear of terrorism money of underworld and money obtained through unauthorized sources can be converted in legal money which is a danger to economy. In cheque truncation RBI Is aiming at fast clearance of cheques with the use of technology.equator principle is a new concept and essential when global warming and such other environmental issues occur. we have studied bank at home model of SBI and proposed RBD plan for SBI and analyzed remaining topics .our study will be helpful to other students ,SBI ,other banks and to every person who is associated with banks. We hope our analysis suggestion will be very useful to above mention entities.

ACKNOWLEDGEMENT
On the successful completion of this project I would like to express gratitude to all the people who have helped us in completion of this project. I wish to extend my deep and sincere gratitude to Mr.dinesh thakker of state bank of India who take out time from their busy schedules to provide us with their valuable guidance at the time of need and who also helped us whole heartedly to achieve the ultimate goal of the study. I would also like thank him for providing us guidance for understanding the operations of the Bank. Finally would like to express my gratitude to, Prof Dr Sneha Shukla of N. R. Institute of business management who gave us constant guidance through out our grand project.

EXECUTIVE SUMMARY
The main object of the project was to learn about the contemporary issues in banking sector such as Bank@Home, Retail business development, Money laundering, Cheque truncation and equator principle. In order to understand and analyze the feasibility and response of BANK@HOME service, we focus on the walk inns at the branch that already are customers of the bank and meet them while they were in queue waiting for their turn through informal communication. Obtained information revealed that many of the existing customers who live even far off from the branch have high frequency of visits to the branch. The Bank will have to promote the service in order to reach out to the customers and make its presence felt. Observation also indicated that the foot falls at the branch actually come from various parts of the city irrespective of the relationship the customers have with the branches through out the city, which will make the task even more difficult to put up drop boxes throughout the city strategically For awareness of the service we gave awareness strategies, Promotional strategies, Pamphlet to educate customers Regarding the service, places where the drop boxes should be placed, and some suggestions to overcome the problem which may arise. Retail business development Model that is basically a new dimension of selling product to customers for nationalized banks, , in order to grow in the present scenario banks have to make sure that they attract new clients not only by providing them new service but also by making them aware and wining their trust. Rbd helps banks in achieving their goals. we

have made the attempt that how rbd can become revenue generation model for the bank. Money Laundering refers to the conversion or "Laundering" of money which is illegally obtained, so as to make it appear to originate from a legitimate source. Here we have studied the role of banks in money laundering concept. Truncation is the process of stopping the flow of the physical cheque issued by drawers the drawee branch. The physical instrument will be truncated at some point en-route to the drawee branch and an electronic image of the cheque would be sent to the drawee branch along with the relevant information like the MICR fields, date of presentation, presenting banks etc. Here we have studied how this concept will be helpful to banks as well as customers. Equator Principles are voluntary set of guidelines developed for managing social and environmental issues related to the financing development projects. Banks adopting the Equator Principles undertake to provide loans only to projects whose sponsors can demonstrate their ability and willingness to comply with comprehensive processes aimed at ensuring that projects are developed in a socially responsible manner and according to sound environmental management practices. Here the purpose of study is to understand the role of banks in equator principles.