Académique Documents
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CHAPTER 1 INTRODUCTION
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Primary market: It is a market for new issue or new financial claims. Secondary market: It is a market for existing securities and those already issued and quoted in stock exchange.
*Information has been collected from the book A Hand book of banking by N. S. Toor
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b) Government Securities Market: It is also called gilt-edged securities market. It is a market where government securities are traded (long term securities)
FINANCIAL INSTRUMENTS
A financial instrument refers to these documents which represent financial claims on assets. Financial instrument can also be called financial securities. These instruments are classified into a) PRIMARY SECURITIES: Shares and debentures issued directly to Public. b) SECONDARY SECURITIES: These securities issued by some intermediaries ex; UTI and Mutual fund again these securities may be classified on the basis of duration as follows. Short Term Securities: Within one year ex; bills of exchange. Medium Term Security: Maturity period between 1-5 years ex; debentures. Long Term Securities: Maturity period more than 5 years ex; Gilts.
FINANCIAL SERVICES
a) MERCHANT BANKING: A merchant banker is a financial intermediary who helps to transfer capital from those it to those who need it. b) LOAN SYNDICATION: Much number of banks joins together and forms a syndicate to provide loan as big sum to corporate. c) LEASING: A lease is an agreement under which a company acquires a right to make use of capital assets like machinery for agreed period in return for periodic payment of rentals. d) HIRE PURCHASE: It is an agreement relating to transaction in which goods are let on hire. e) FACTORING: It is an agreement under which a financial intermediary assumes the credit risk in the collection of book debt passes for its client. f) VENTURE CAPITAL: A venture capitalist finances a project based on the potentialities of new innovative projects for new entrepreneurs. g) MUTUAL FUND: A mutual fund refers to a fund raised by a financial services company by pooling the savings of the public.
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Introduction
Any amount borrowed or lent is called a loan. If money is borrowed it is debt of business and if loan is given, it is receivable for the business.
Loan is a method of lending under which bank gives credit to a borrower for a fixed period and for a specific purpose. Loan are promises for future payment, they have to be repaid in periods beyond a year and are, therefore long term liabilities.
The process of granting of loans and advances post credit worthy evaluation of the borrower coupled with the legal documentation is more often than not , reinforced by a strong recovery and monitoring process. The risks associated with adverse selection and moral hazard are to be prevented at any cost.
REVIEW OF LITERATURE:
It is mandatory to scan through the literature which has already gone through the proposed study subject. Various research works on lending practises of SBM has been very helpful in the successful conduct of the study. However all such studies concentrate on certain issues and suggest piecemeal solution. Therefore, a comprehensive study is elusive. The text and academics literature which helped the study in details are:
A Hand Book of Banking by N. S. Toor Ramman Finance management. Finance management and policies by James C. Van Horne. Management accounting principle and practises by R. K. Sharma. Accounting for managers S. P Jain and K.L. Narang. Research methodology by C.R. Kothari. Business Research Methods by Appannaiah Reddy and Ramnath
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Objectives
To study different types of loans extended by the bank. To study the procedure of granting loans and advances by the bank. To evaluate the norms for sanctioning loans. To confirm the non existence of the conditions of adverse selection and moral hazard. The ascertain the reasons, if any, for the non performance assets and if significant to evaluate the recovery process To ascertain the credit risk management system at the bank
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This refers to the method of data description. Descriptive research includes surveys and fact findings enquire of different kinds. The major purpose of descriptive research is description of the state of affair as it exists at present. In business research we quite often use the term export facto research for descriptive research studies. The main characteristics of this method is that the researcher has no control over the variable, he can only report what has happened or what is happening. The method of research utilised in descriptive research are survey methods of all kinds including comparative and correlation methods. Sources of data Collection The data is most vital and the integral aspect, which is responsible for the completion of any project.
Primary data The primary data will be collected through personal interaction with the executives and managers of the Bank as also from an verification of the records to the extent permitted. Primary data will also be collected, collated and interpreted through observation of the processes at the bank
Secondary data It will be retrieved and collated from the annual reports of the Bank, from reports in various magazines, academic journals and other published papers of repute.
Plan of Analysis
The data collected will be analyzed using the various techniques and tools generally accepted as proper for such analysis. Techniques like Risk Identification and financial analysis will be used in arriving at the logical conclusion.
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Chapter Scheme
1) INTRODUCTION 2) RESEARCH DESIGN 3) INDUSTRY PROFILE 4) PROFILE OF THE COMPANY/ORGANISATION/SYSTEM. 5) ANALYSIS AND INTREPRETATION OF DATA. 6) SUMMARY OF FINDINGS ,CONCLUSION & RECOMMENDATION. BIBLOGRAIPHY. APPENDIX.
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My bank Surakhshna- A unique deposit scheme linked with insurance cover has been introduced. Insurance cover to a maximum of Rs. 5 lakh on deposits held for 5 years and more.
Saving Plus- In order to provide value added services to our Personal Segment customers, a new specialized auto sweep product for Personal Segment savings bank customers has been introduced.
Saral Savings Bank account (No Frills account)- This account comes with very low minimum balances as well as low / nil charges, to cater to the needs of individual from the vast sections of population who are, otherwise, not fulfilling certain conditions of our existing Savings Bank requirements.
SBM Tax Saver Scheme (Tax saving scheme under Sec 80c of the IT act)A Bank Term Deposit Scheme 2006 has been introduced by the Central Government commencing from the financial year 2006-07 wherein time deposits made upto Rs.1.00 lakh for a period of 5 years are exempted from payment of Income tax under Sec 80C The following are the Deposit Scheme provided by State Bank of Mysore:
It combines the features of Current account, Savings Bank a/c, TDR or RID a/c. The product proposes to give liquidity to the depositor with high returns and convenience. It provides the depositor an automatic overdraft facility in Current a/c and automatic withdrawal of Term deposits in units through SB a/c. Depositor has to simultaneously open TDR / RID a/c for Rs.1000/-, SB a/c with balance Rs.500/- and Current a/c.
A fixed deposit scheme for 5 & 8 years to get an additional interest of 0.25% and 0.5% respectively more on base interest rate (of 3 years deposit). The depositor has the option to invest in long term maturity at a floating rate with an opportunity to gain in any upward movement in interest rate. Minimum deposit of Rs.50000/-.
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Customer can open an account with a deposit as low as Rs.100/- to Rs.300/-(Rs. 250/- for chequebook facility and Rs.100/- without chequebook facility) depending upon the area and earn interest at 3.5% (wef 01/03/2003) per annum. Computerized branches - Rs.500/- and for Specialized hi-tech branches - Rs.2000/-
Term Deposits
In this scheme, customers can invest a lumpsum amount for a specific period from 15 days upto 120 months and collect interest at monthly (discounted), quarterly, half- yearly or yearly intervals.
Reinvestment Deposits
According to this scheme, customers investment and interest for the specified period is paid together at the end of the term. It gives the highest yield of interest on savings taking care of customers future needs like marriage, house construction, children's higher education, etc., Period can be from 6 months upto 10 years
Recurring Deposits
In this scheme, the minimum monthly installment is Rs.20/- and is accepted in multiples of Rs.5/thereafter. Deposits are accepted from 6 months to 120 months
Cash Certificate
In this scheme, customers pay an odd sum of money and receive a huge round sum. The period of this scheme is from 6 months to 10 years, with quarterly compounding of interest.
A special deposit scheme, with interest compounding quarterly for persons with seasonal income like agriculture. Deposit in five yearly installments gets a huge sum after 10 years.
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A novel pension plan for a tension free future specially for self-employed / daily wage earners who are not covered under pension scheme. Customers save specified amount at regular monthly intervals for a specified period of say, 7 / 10 years when young and energetic. They get a regular monthly income after 7th / 11th year equal to or twice the monthly saving throughout life or get a huge sum for their large needs.
This is a plan which takes care of old age. Customers save a specified small sum every month for 15 or 25 years (renewed every 10 years) and it is re-cycled every 10 years to get the maximum benefit of compound interest.
Advances
Personal Banking schemes Commercial & Institutional Banking schemes Agricultural Banking schemes Micro and Small Enterprises schemes (MSE)
NRI Services
NRI Deposits International Banking - Forex services Performa for foreign currency remittances Account opening form for non-resident Indians Interest rates on NRE Deposits and schemes Details of its correspondent Banks -Exchange companies with Draft drawing arrangement with the Bank -Money Transfer to India Through Western Union -Remittance facility through State Bank of India, New York Branch
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LOAN SCHEMES
Personal Loans Eligibility Individuals, employees of state / central government, Public Sector undertakings, reputed profit making Public limited companies, Multi national companies with a minimum service of two years and drawing a net salary of Rs. 6,000/- or above. Purpose To meet personal expenses like marriage, family functions, medical expenses, travel etc., Loan Amount Upto Rs. 1.50 lacs depending on repayment capacity of the individuals. Security Third party guarantee of equal means. Securities like LIC policies, NSC, KVIP, Shares etc., Period of Repayment 12 months to 36 months. Type of Loan Demand loan. Processing Fee 1% of loan amount (one time).
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Mortgage Loan
Eligibility Individuals, employees, professionals, self-employed and others who are income tax assessee whose net monthly income is of Rs. 12,000/- for salaried persons or net annual income of Rs. 1,50,000/- in case of others and self-employed. AGE Maximum age - 65 years. Loan Amount Rs. 1.00 lac to Rs. 50.00 lacs Salaried Class - Maximum 36 times net monthly income. Others - Maximum three times the net annual income. Type of Loan Term loan or current account overdraft Security Equitable mortgage of unencumbered residential house / flat or urban commercial or industrial property in the name and possession of the borrower, either self acquired or vacant property. Rented out property will be accepted as security only where lease is in existence in favour of corporation of good standing and repute. Power of attorney authorising the Bank to collect rent should be given. Margin 50% of the market value of the security. Period of Repayment Repayable in 84 equated monthly instalments. Processing Fee 1.25% of the loan amount (one time)
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Housing Loan
Under Personal Segment, You can avail a loan for
Construction or Purchase of a new house or flat Repairs / Renovation / Extension of existing house For purchase of plot for construction of house within two years For purchase of built houses not more than 15 years old Housing loan against II charge For Purchase of Furnishings / Consumer durables as part of the project
Quantum of Loan amount Loan amount for all categories Net Annual Income EMI / NMI Ratio Upto Rs. 60000/Above Rs. 60000 to less than Rs.1,20,000/Above Rs. 1,20,000/- to less than Rs.2,00,000/Above Rs. 2,00,000 to less than Rs.5,00,000/Above Rs. 5,00,000 to less than Rs.10,00,000/Above Rs. 10 lacs 20% 25% 30% 50% 55% 65%
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Margin Amount Upto Rs. 30 lakhs Above Rs. 30 laks to 75 lakhs Above Rs 75 lakhs to 1.00 Crore Above Rs 1.00 crore 40% Margin (%) 20% 20% 25%
Margin for Purchase of New houses which are ready for possession (Applicable to First sale only) Amount Upto Rs. 75 lakhs Above Rs.75 laks to 1 cr Above Rs 1.00 crore Margin (%) 15% 20% 30%
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Interest Penal interest of 1% in case of default of three or more consecutive instalments. Loan amount Upto Rs 25 Lacs Processing Charges (w.e.f. 01.06.2011) 0.25% of loan amount, with a minimum of Rs 500/Above Rs 25 Lacs and upto Rs 75 Lacs Above Rs 75.00 Lacs Insurance The house property has to be insured covering all risks. Group insurance is available to cover the life of the borrower on payment of one time upfront premium. Disbursement Direct to the sellers in case of purchase. For Construction / Repairs / Renovations in a phased manner Repayment Repayable in monthly instalments. Repayment period ranging from 5 to 25 years, including a moratorium period ranging from 6 to18 months from the date of the first disbursement. Schemes and Interest Rates are subject to changes from time to time. Attractive features of State Bank of Mysores Housing Finance scheme
Rs 10,000/-
Rs 20,000/-
Loans from State Bank of Mysore are cheaper than housing finance agencies / companies. Nominal processing charges. No administration charges. No commitment charges. Interest charged on reducing balances. Facility available at all branches in India. Exemption from wealth tax for one house under Wealth Tax Act.
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Repayable in 36 to 60 months. Minimum loan amount Rs. 10000/-. Demand Loans upto Rs.25000/- payable in 36 months. Demand Loans above Rs. 25000/- repayable in 36 months Term loans repayable in more than 36 months and upto 60 months.
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Hypothecation of assets created (articles bought) Third party guarantee acceptable to the bank if check off facility is not available.
Insurance Cover
Vehicles bought to be insured for full value. For articles above Rs.10000/- insurance will be for market value or atleast 110% of the loan amount whichever is higher.
Specially for the Salaried class for purchase of two-wheelers Minimum net salary of Rs.2000/- per month with availability of check off system. Loan sanctioned upto 90% of the cost of vehicle or 12 times the net monthly income whichever is less. Gross deduction including loan instalment should not exceed 33% of the gross salary.Maximum - Rs. 4.00 lacs or 80% of the cost of vehicle +1%. Second hand cars - 60% of market value; not older than 5 years; Maximum loan - Rs. 2 lacs. Repayable in 36 months, may be extended upto 60 months
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Vehicle should be insured for full value. One-time service fee of 1% of loan amount.
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INTEREST RATES: SCHEMES AND INTEREST RATES ARE SUBJECT TO CHANGES FROM TIME TO TIME. Second Educational Loan To enable the students for taking higher education, provided the student secures 60% marks in existing course. The second loan is to be availed only from the branch where the first educational loan has been sanctioned. Repayment Technical / Professional Higher studies in India / Abroad Repayment of loan to commence immediately after disbursal, by the parent / guardian, out of his / her income. Instalments may be nominal (to cover interest portion, at least) during the period the student is undertaking the studies. The instalments will be stepped up one year after the completion of the course or after the student gets a job, whichever is earlier, so that the loan gets repaid together with interest within a period of 60 to 84 months thereafter. Security Amount. Upto Rs. 4.00 lacs Security NIL
Above Rs. 4.00 lacs Collateral in the form of a suitable 3rd party guarantee and upto Rs. 7.50 lacs Above Rs. 7.50 lacs Collateral security by way of immovable property or equal to the loan amount in the and upto Rs. 10.00 lacs form of Government securities / NSCs / Units of UTI Guarantee of parents / guardians (in the case of minors, the parent / guardian will execute the documents on behalf of the minor and also in his capacity as co-borrower) / third party guarantee where sufficient collateral security is not available Insurance An insurance policy will be taken on the life of the student borrower for an amount equivalent to the loan amount and the policy should be convertible whole-life one for 25 / 30 years, convertible after 5 years into
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Fee payable to college/school/ hostel Examination/ Library/Laboratory fees Purchase of books/equipments/ instruments/ uniforms Caution deposit/ building fund/ refundable deposit supported by institution bills/receipts [not to exceed 10% of tuition fees for the entire course]
Purchase of computers, if essential for completion of course Any other expense required to complete the course like study tours, visits to foreign universities in exchange programs, project work, thesis, etc
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Upto Rs. 4 lacs: Nil. Above Rs.4 lacs: 5% Scholarship/ assistantship to be included in the margin Margin may be brought in on year to year basis as and when disbursements are made on a pro-rata basis
Security: Co-obligation of parent/guardian. In case of married person, co-obligation can either be of spouse or parent/parent-in-law. Processing Fee Nil Moratorium Period Up to 6 months after completing the course. Repayment Maximum 5-7 years after commencement of repayment
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MYBANK ADHYAPAK Personal loan scheme for teacher community Eligibility Permanent Teachers / Non-Teaching Staff of Central / State Govt. Educational Institutions and also Teachers and Non-Teaching Staff of Govt. Recognised Schools / Colleges / Aided Institutions Purpose Personal Loan for any purpose including purchase of consumer durables Loan Amount 10 times net monthly income with a maximum of Rs.1.00 lac Income of Spouse Spouse income may be added to arrive at the eligible loan amount provided spouse is also employed and stands as guarantor. Type of Account Demand Loan Account Margin Nil Repayment Maximum of 36 months in equated monthly instalments Processing Fee Rs.250/- flat Security Upto Rs.25,000/- Nil (only Check off facility).
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MYBANK UTSAV Personal loan scheme for individuals for meeting expenditure related to Festivals Eligibility a)Employees of State / Central Govt.,/ PSUs / profit making Public / Private Ltd., Companies, Institutions etc., with a minimum of 2 years service. b)Self employed persons with a minimum 3 years standing / experience. c)Persons having regular source of income from verifiable channels like Pensions and Interest on TDRs / NSCs / Govt. Securities etc., Purpose Loan to individuals for meeting expenditure related to Festivals Minimum Net Income Net Monthly Income (NMI) of Rs.3000/- & above Loan Amount Four times the net monthly income with a minimum of Rs.5000/- and a maximum of Rs.50,000/- (Borrowers other than salaried people should produce acceptable proofs with respect to their annual income) Security Primary - Nil Collateral - personal guarantee of the spouse if employed, or any other person of adequate worth where check off facility is not available Repayment Period Maximum of 12 months through EMIs. No penalty for prepayment Processing Fee Rs.100/- per application
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Sanjeevini
This scheme is introduced to provide timely assistance for obtaining Medical treatment for Salaried class, Self employed persons, Employees of reputed PSUs, Profit making public limited companies, Self employed engineers, Doctors, Architects, Chartered Accountants, MBAs, Pesioners of PSUs, Govt. (state/central) public sector banks and also pensioners of State Bank of Mysore. Salient features of the scheme: Eligibility: a) Employees of Government, Reputed PSUs and profit making Public Limited Compani, with a minimum of 10 years service b) Self Employed Engineers, Doctors, Architects, Chartered Accountants, MBAs, with a minimum 5 years standing. They should be below 65 years of age c) Pensioners of PSUs / Govt. (State/Central) Public Sector Banks who have taken premature voluntary retirement and are 60 years of age or less, including pensioners of SBM d) Agents of Insurance / KVP / Mutual Funds etc., who are tax assesees and whose gross annual income exceeds Rs. 1.50 lacs. The facility will be considered only if a power of attorney or mandate is registered with the principal organisation with which the agent deals, authorising them to remit the commission direct to the Bank. Provided, however, that if the person treated happens to be a minor Son / Daughter of an eligible applicant, the loan can be extended to the Parent earning Income Criteria: a) For Employees / Pensioner - Net monthly income Rs. 6000/b) For Self Employed Person - Net annual income of Rs. 1,50,000/- as per latest I.T. Returns c) For Agents - Gross income exceeding Rs. 1.50 lakh per annum (to produce latest I.T. Returns) d) Income of the spouse can be considered if the spouse guarantees the loan Loan Amount:
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Maximum 12 months net monthly income, Net of all deductions, including Income Tax for salaried individuals and pensioners and 1 year's net annual income in case of Self-employed professionals Employees subject and to the ceilings Rs. as 1.50 below: lacs
Professionals:
Pensioners who have taken early retirement and Agents under eligibility above Rs. 1.00 lac Margin: 15 % of the total cost of Hospital bill Rate of Interest: (wef 10.08.2008) With check-off facility Without check-off facility Type of Loan: Medium Term Loan Security: Tangible Collateral Security. Procesing fee: 0.50% with a maximum of Rs. 500/-. Disbursal: 1. Directly to hospital against production of bills or 2. Payment against indents from hospital 3. Reimbursement may also be considered within 15 days from the date of discharge when payment has already been made Repayment: Minimum -36 months Maximum 72 months - out of Salary / Pension /Professional Income / Agricultural Income Age limit: Maximum 65 years Other Conditions: 15.25% 15.50%
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Samachar
This product has been introduced to meet the needs of journalist community who are directly involved in providing updated happenings over the globe. For purchase of Cameras, Computer, Books, Two wheelers, Mobile phones etc., for permanent employees of leading Newspapers. Salient features of the scheme: Eligibility: a) Permanent employees of Leading Newspapers b) Minimum net salary Rs. 5000/- per month Loan Amount: a) 12 times of Net monthly income. b) Minimum Rs. 10000/-. Maximum Rs. 1,00,000/Margin: 10% Type of Loan: Term loan repayable in 36 - 60 months Security: Hypothecation of the articles / Vehicles purchased Guarantee: i) No guarantee needed if check-off facility is available ii) Acceptable third party guarantee if check-off facility is not available
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The society shall prepare a village wise demand list of all the borrowers. The list shall contain the information of over dues at the beginning of the year i.e. 1st April; loans falling due for repayment are subsequent months up to March. The total demand for the year should be arrived at on basis of demand falling due in different months. The demand register shall be prepared by 30th November by the Secretary of the society which shall be test checked by the Supervisor in at least 10% cases.The list of defaulters shall be displayed in the notice board of the society, gram panchayat and at conspicuous places in the village for information of the borrowers. A copy of the list shall be supplied to the Area Directors and President of the society to pursue with the defaulting members for repayment 2. Service Of Demand Notice:The demand notice to members shall be prepared by the Secretary and service of the notices on the members completed by 31st December. In case of KKGC and KKSC holders, the demand notice shall be served by the Bank Supervisor. As regards other members, the Secretary of the society shall personally have the notices and obtain the dated acknowledgement of the borrowers on the reverse of the duplicate copy. In case the borrower is absent from the village, the notice shall be served on his purpose or any adult member of the family. In no case the demand notice shall be allowed to be served on the borrowers through the Peon/Watchman of the society 3.Fixation Of Target:Fortnightly target for recovery should be fixed for each society/branch month wise starting from December onwards and communicated to all concerned. Normally the target for recovery should be 15% of the demand by December, 20% in January 25% in February and 30% in March. The achievement against the target shall be monitored and reviewed every month in branch level meetings of PACS and branch Managers meeting at the Head Office of the CCBs. The shortfall in achievement during the month shall be added to the next months target. Fortnightly report of recovery of loans shall be submitted by the CCBs to OSCB in the prescribed format from January to March on the 3rd day of the succeeding fortnight to which it relates.
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5. Display Of Default List:The names of top 20 defaulters shall be displayed prominently by painting in black color on the wall in the branch/PACS premises. This should be updated twice a year i.e. in April and October.
6. Recovery Camp:Recovery camps shall be organized at strategic places for a cluster of societies. The detail schedule of holding such camps should be drawn up much in advance and communicated to all concerned. The senior officers of Head Office shall attend those camps unfailingly for which mobilization of the loanees should be done by the field staff of the Society/branch at least 2 weeks prior to the date of the camp. The District Collector and other senior officers like P.D., DRDA, DDA, DAO, DRCS, and BDO may be invited to attend such camps. The non-official Directors and President of societies may also be associated in recovery of loans. Other line department officers should also be invited to attend the recovery camps. The CEO of CCBs shall attend at least 15 recovery camps in a month during the recovery drive (January-March and May-June).
7. Supervise Of Field Movement:The CEOs/Senior Officers of CCB should contact surprise check on the movement of the field staff and take exemplary against the erring employees. The secretary of PACS shall display his tour programme on the notice board/wall of the society when leaving HQs. 8. Legal Action:All defaulted loan accounts of Rs. 2,000/- and above crop seasons shall be covered by disputes. In case of direct lending by KCCB, all NPA accounts shall also be covered under dispute. The dispute
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Particulars Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Interest Spread Net Profit Margin Adjusted cash margin (%) Return on longterm fund Interest income / Total Funds Net Interest income / Total Funds Non Interest income / Total Funds Interest Expended / Total Funds Current Ratio Quick Ratio
Mar 12 10 110.47 1176.49 4.36 6.64 7.54 115.78 9.9 3.62 0.08 6.28 0.03 24.73 78.77 12.55 68.8 79.07 29.61 6.14
Mar 11 10 156.22 961.09 4.77 11.06 12.17 102.75 9.34 4.27 0.06 5.08 0.03 21.01 77.62 13.76 59.89 77.42 29.74 6.66
Mar 10 10 250.01 1108.66 4.29 11.08 12.13 145.93 9.42 3.94 0.07 5.48 0.02 20.74 76.88 12.42 62.25 76.82 31.86 6.27
Profitability Ratios
Leverage Ratios
Advances/loans Profit and loss funds(%) account ratio Capital adequacy ratio Interest earned Debt coverage Credit deposit ratio ratio Investment deposit ratio Cash deposit ratio
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Year
2009- 2010 2010 2011 2011 2012 Total
Amount ( in Crores)
22,156.11 27,868.11 35,393.55 85,417.77
Percentage (%)
25.95 32.62 41.43 100
ANALYSIS: From the above table it can be analysed that in the year 2009 2010 the total no. of advances was 22,156.11 crore with a 25.95%; in 2007 2008 the total no. of advances was 27,868.11 crore 32.62% and in the year 2010 2011the amount is 35,393.55 with 41.43%.
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Total advances
INTERPRETATION: From the above pie- chart it can be inferred that in the year 2010 2011 showed the maximum advances.
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Year
2009 2010 2010 - 2011
Percentage (%)
31.80 32.50
2011- 2012
1,591.42
35.70
Total
4463.66
100
ANALYSIS:
From the above table it is analysed that when we compare the year 2009 2010 the amount outstanding was 1,418.57 crore with 31.80%. In the year 2010 2011 the amount was 1,453.67 crore with 32.50 % and in the year 2011 2012 it was 1,591.42 crore with 35.70%.
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36%
INTERPRETATION:
From the above pie- chart it can be inferred that there is continuous growth every year in the housing finance segment. There is a noticeable growth in the home loan segment which is very profitable to the bank for their further financial improvement.
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Year
2009 - 2010 2010 - 2011
Percentage (%)
23.62 26.96
2011- 2012
146.81
49.42
Total
297.06
100
ANALYSIS:
From the above table it is analyzed that when we compare the year 2009 2010 the amount outstanding was 70.18 crore with 23.62% . In the year 2010 2011 the amount was 80.02 crore which shows 26.96% and in the year 2011 2012 the amount was 146.81 crore with 49.42%.
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car loan
150 100 50 0 2009 - 2010 2010 - 2011 Year Amount outstanding in Rs. Crore Percentage
2011 - 2012
INTERPRETATION: From the above graph it can be inferred that in the year 2011 2012 there is a substantial growth in the car loans as against all previous years.
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Year
2009- 2010
Amount( in Crore)
384.46
Percentage (%)
28.31
425.11
31.32
548.24
40.37
Total
1357.81
100
ANALYSIS:
From the above table it is analyzed that when we compare the year 2009 2010 the amount was 384.46 crore which shows 28.31%. In the year 2010 2011 the amount was 425.11 crore which shows 31.32% and in the year 2011 2012 the amount was 548.24 crore which shows the percentage of 40.37.
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personal loan
600 500 400 300 200 100 0 2009 - 2010 2010 - 2011 2011 - 2012 Amount outstanding in Rs. Crore Percentage
INTERPRETATION: From the above mentioned graph it can be interpreted that there is a substantial growth every year in the personal loans.
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Table 5 Table showing outstanding loan for the years 2009- 2012. (d) Educational loan
Year
2009 2010 2010 - 2011 2011 2012
Percentage (%)
26.88 33.09
335.07
40.03
Total
836.9
100
ANALYSIS:
From the above table it is analysed that when we compare the year 2009 2010 the amount outstanding is 224.99 crore with 26.88%. In the year 2010 2011 the outstanding amount is 276.84 crore with 33.09% and in the year 2011 2012 the outstanding amount is 335.07 crore with 40.03%.
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350 300 250 200 150 100 50 0 2009 - 2010 2010 - 2011 Amount outstanding in Rs. Crore Percentage
2011 - 2012
INTERPRETATION:
From the above graph it is seen that there is a constant growth in the education loan of State Bank of Mysore. There is a noticeable growth in the education loan segment which is very profitable to the bank for their further financial improvement
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Year
2009 2010 2010 - 2011 2011 2012
Percentage (%)
30.28 32.54
4,260.36
37.18
Total
11,457.3
100
ANALYSIS:
From the above table it is analyzed that when we compare the year 2009 2010 the amount was 3,469.72 crore with 30.28%. In the year 2010 2011 the amount was 3,727.22 crore with 32.54% and in the year 2011 2012 the amount was 4,260.36 crore with 37.18% .
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INTERPRETATION: From the above graph it can be inferred that there is a moderate growth in the loans of the retail sector from 2009 - 2012.The maximum growth is in the year 2011 2012.
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Year
2009 2010 2010 - 2011 2011 2012
Percentage (%)
26.05 31.29
21,349.41
42.66
Total
50,042.94
100
ANALYSIS: From the above table it is analysed that when we compare the year 2009 2010 the amount was 13,032.09 crore which shows a percentage of 26.05. In the year 2010 2011 the amount was15,661.44 in crore which shows the percentage of 31.29 and in the year 2011 2012 the amount was 21,349.41 in crore which shows the percentage of 42.66.
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Graph 7 Graph showing outstanding loans to corporate sector for the year 2009 - 2012.
43%
INTERPRETATION: From the above pie-chart it is inferred that there is constant growth in the outstanding loans in corporate sector.
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Table 8 Table showing outstanding loans to others which includes priority sector for the year 2009 - 2012.
Year
2009 2010 2010 2011
Percentage (%)
24.53 35.03
2011 - 2012
10,118.47
40.44
Total
25,020.14
100
ANALYSIS: From the above table it is analyzed that when we compare the year 2009 20010 the amount was 6,138.64 crore with 24.53%. In the year 2010 2011 the amount was 8,763.02 crore with 35.03% and in the year 2011 2012 the amount was 10,118.47 crore with 40.44%.
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INTERPRETATION: From the above graph it can be inferred that there is a noticeable growth in the outstanding loan by others which includes priority sector which is highly beneficial to the bank.
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Year
2009 2010
Percentage (%)
26.16
2010 - 2011
28,151.68
32.55
2011 2012
35,728.24
41.29
Total
86,520.37
100
ANALYSIS: From the above table it is analysed that when we compare the year 2009 2010 the amount outstanding was 22,640.45 crore which shows a percentage of 26.16. In the year 2010 2011 the amount was 28,151.68 crore which shows the percentage of 32.55 and in the year 2011 2012 amount was 35,728.24 crore which shows the percentage of 41.29.
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41%
INTERPRETATION: From the above graph it is inferred that there is a substantial growth in the outstanding loan in business sector which concludes that it is highly advantageous to the bank for their further financial improvement.
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Table 10 Table showing total outstanding retail advances for the year 2009- 2012
Year
2009 2010
Percentage (%)
30.28
2010 - 2011
3,727.22
32.53
2011 - 2012
4,260.36
37.19
Total
11,457.3
100
ANALYSIS: From the above table it is concluded that when we compare the year 2009 2010 the amount outstanding was 3,469.72 crore with 30.28%. In the year 2010 2011 the outstanding amount was 3,727.22 crore with 32.53% and in the year 2011 2012 the amount is 4,260.36 crore with 37.19%.
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2011 - 2012
INTERPRETATION: From the above graph it can be inferred that there is a sequential growth year wise which is highly beneficial to the State Bank of Mysore.
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Table 11: Table showing term loans for the years 2009 -2012
Year
2009 - 2010
Percentage (%)
30.28
2010 2011
19,200.56
32.53
2011 - 2012
25,991.64
37.19
Total
59,175.85
100
ANALYSIS: From the table it can be analysed that in the year 2009 2010 the amount is 13,983.65 crore with a percentage of 30.28. In the year 2010 2011 the amount is 19,200.56 crore with a percentage of 32.53 and in the year 2011 2012 the amount is 25,991.64 crore with a percentage of 37.19.
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Teram loan
44%
INTERPRETATION:
It can be inferred that there is continuous growth in the term loans provided by the bank wherein the maximum growth is seen in the year 2011 2012.
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Particulars
Number of respondent
Percentage (%)
PUC
28
28
Graduate
54
54
Post- graduate
18
28
Total
100
100
ANALYSIS: From the above mentioned table it can be analyzed that 28% have done PUC, 54% are graduate and 18% are post-graduate..
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INTERPRETATION: From the above graph it can be inferred that maximum no. of respondents are graduate where as minimum no. of respondent are post-graduate.
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Age in years
20 - 30
No. of respondent
45
Percentage (%)
45
30 - 40
29
29
40 - 50
18
18
Above 50
Total
100
100
ANALYSIS: From the above table it is seen that in there are 45 respondent in the age group of 20 30, 29 respondents fall in the age group of 30 40, 18 respondent in the age group of 40 50 and 8 respondent above the age group of 50.
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Interpretation: From the above graph it can be inferred that the majority group of respondents belongs to the age group of 20 30 followed by the age group of 30 40. The least no. of respondents belongs to the age group above 50.
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Gender
Male
No. of respondent
88
Percentage (%)
88
Female
12
12
Total
100
100
ANALYSIS: From the above table it is analysed that 88 respondent are males whereas only 12 respondents are females which shows the maximum no. of respondent were males.
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Interpretation: From the above graph it is inferred that that the maximum no. of respondent are males and female participation is less.
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Occupation
Government
No. of respondent
35
Percentage (%)
35
15 24 26
15 24 26
Total
100
100
ANALYSIS: From the above table it can be analysed that 35 of the respondents are government employees, 15 are professional, 24 are in private and 26 belongs to the business .
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Interpretation: From the above graph it can be inferred that bank major customer on the basis of occupation are government employees.
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Income (Rs.)
Less than 50,000
No. of respondent
20
Percentage (%)
20
28 48 4
28 48 4
Total
100
100
ANALYSIS: From the above mentioned table it can be concluded that there are 20 respondents income is less than 50,000 ; 28 respondents falls in the income group of 50,000 1,00,000 ; 48 respondents in the income group of 1,00,000 1,50,0000 and 4 respondents falls in the income group above 1,50,000.
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No. of respondent
Interpretation: It can be inferred that majority no. of respondent belongs to income group of 1,00,000 1,50,000 and the least is below 1,50,000.
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Source
SBM employees
No. of respondent
45
Percentage (%)
45
35 12 8
35 13 8
Total
100
100
ANALYSIS: From the above table it can be analysed that source of awareness of 45 respondents was through SBM employees, 35 was through magazine; 12 was through friends and television and 8 was through newspaper, 12 was through friends and television through
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Source of awareness
Newspaper
INTERPRETATION: It can be inferred that majority of the respondent came to know about the bank through SBM employees followed by magazines, Friends and television and finally the least came to know through newspaper.
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Amount
Below 5,000
No. of respondent
20
Percentage (%)
20
43 30 7
43 30 7
Total
100
100
ANALYSIS: From the above table it can be analysed that below 5,000, 20 respondent paid EMI in between 5,000 10, 000 , 43 in between 10,000 15,000 , 30 paid EMI and the least EMI was paid in between 15,000 20,000.
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7% 30%
20% Below 5,000 43% 5,000 - 10,000 10,000 - 15,000 15,000 - 20,000
INTERPRETATION: It can be inferred from the pie- chart that the majority no. of respondent who borrowed EMI is in between 5,000 10,000 and the least EMI paid by the borrower is in between 15,000 20,000.
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Amount ( Rs.)
Below 5,00,000
No. of respondent
30
Percentage (%)
30
45 20 5 100
45 20 5 100
ANALYSIS: It can be analyzed from the above mentioned table that that there were 30 respondents who borrowed amount of loan below 5,00,000 ; 45 between 5,00,000 10,00,000 ; 20 between 10,00,000 to 15,00,000 and there were only 5 respondents who borrowed above 15,00,000. 20,00,000
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10,00,000 15,00,000
15,00,000 20,00,000
INTERPRETATION: From the above graph it can be interpreted that the maximum no. of amount borrowed by respondent is in between 5,00,000 10,00,000 whereas the least of amount borrowed by respondent is in between 15,00,000 20,00,000.
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Satisfaction level
Extremely satisfied
No. of respondent
15
Percentage (%)
15
53 25 7
53 25 7
Total
100
100
ANALYSIS: From the above table an attempt was made to understand whether respondent feels that the products offered by the bank were extremely satisfied, satisfied, moderate or unsatisfied.
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INTERPRETATION: It can be inferred from the pie-chart that that the maximum no. of respondent were satisfied where least no. of respondent were unsatisfied.
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TOTAL ASSET 2007YEAR TOTAL ASSET(RS. CR) 407185 459883 494029 566565 721526
200809
2009010
2010011
2011012
08
800000 700000 600000 500000 400000 300000 200000 100000 0 1 2 3 YEAR 4 5 6 YEAR TOTAL ASSET(RS. CR)
Interpretation:-Above graph show that total assets of SBI is increased in 2007-08 by 52658 crore, in
2011-12 increased by 154961rs. crore. So assets of the SBM bank increased from last five year.
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GROSS NPA
YEAR
2007-08
2008-09
2009-10
2010-11
2011-12
_GROSS NPA(RS.CR)
12667
12456
9628
9998
12837
_GROSS NPA(RS.CR) 14000 12000 10000 8000 6000 4000 2000 0 200708 200809 200910 201011 201112 _GROSS NPA(RS.CR)
Interpretation:- above graph shows that Non-performing assets of SBM decreased from 2007-08
to2009-10 and increased in 2011-12. There are so many reason of increases of NPA
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NET NPA
2007-08 5442
2008-09 5349
2009-10 4906
2010-11 5258
2011-12 7424
NET NPA(RS. CR.) 8000 7000 6000 5000 4000 3000 2000 1000 0 2007- 2008- 2009- 2010- 201108 09 10 11 12 NET NPA(RS. CR.)
Interpretation :Above graph show that net NPA decreased from 2007-08 to 2008-09 and increased in 2009-10 to 2011-12
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Interpretation : Above graph shows that the gross NPA (Ratio%)of SBM is decreased from 2008-09 to
2009-10 and increased in 2011-12.
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NET NPA(RATIO%)
2007-08 3.48
2008-09 2.65
2009-10 1.88
2010-11 1.56
2011-12 1.78
Interpretation: Above graph shows that the net NPA(Ratio%) of SBM is decreased from 2008-09 to
2009 -10 and increased in 2011-12
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FINDINGS
1. 45% of the loans taking customers are in between the age of 20 30 while another 29% of customers are in between the age 30 40. 18% of the customers belong to the 40 50 age categories while 8% are above the age of 50. 2. 88% of the loan takers are male while only 12% are female. 3. 35% of loan taking customer are working at the government sector, 15% professional, 24% private and 26% customers are engaged in his / her own business. 4. It can be observed that majority of customers are under the income group of 1,00,000 1,50,000 which is 48% followed by the income group of Rs. 50,000 1,00,000, at 28%. The group earning less than Rs. 50,000 owns 20% and at last the income group of Rs. 1,50,000 and above owns 4%. 5. 45% of respondent are made aware about loan by SBM employee while 35% are made aware by magazine. 13% and 7% of customer are made aware of SBM bank by newspapers and friends. 6. Majority of the EMI was paid by the borrower in between 5,000 10,000 and least EMI was paid by borrowed in between 20,000 30,000. 7. 30% of customer of SBM banks are taking loans below 5,00,000, While 45% are taking between 5,00,00 10,00,000 , 20% are taking between 10,00,000 15,00,000 by 22% and only 5% borrowed in between 15,00,000 20,00,000. 8. 53% of the customers are satisfied with the loan amount while 25% are moderately satisfied and 15% are extremely satisfied but 7% are unsatisfied. 9. It is also found that there is an impressive continuous growth in vehicle loan, education loan and personal loans which is remarkably outstanding for the bank. 10. Home loan segment has a better increasing trend in coming years since it has a high rate of demand in the current market.
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SUGGESTIONS
1. The banks variety of loans and advances are unlimited but they are not communicated well enough to customers. Hence, it is suggested to make additional efforts to provide information to the customers about the range of loans and advances 2. Attractive and competitive interest rates should be adopted since it is the main factor considered for taking loans by the customers. 3. Since all the banks are providing loans with the same features. It is recommended that bank should offer some unique features to its products to acquire strong identity and can be easily distinguished. 4. At the present scenario, SBM should intensify their advertisement campaign in order to gain new customers, make people aware of the new schemes available to them and also take advantage of the current market. 5. Service level provided by the bank should be more efficient and effective for the customer. The customers are very keen on the service provided by the bank. They would rate it as one of the important factor while selecting the loans. 6. The bank should adopt attractive and competitive rate of interest in order to induce customers to take personal loans and to attain more shares from its competitors. This is also one of the critical factors for selecting the loans. 7. Increase in short- term lending such as cash credits, Overdraft and Loans repayable on demand is most favourable to bank to earn short- term gain and maintain liquidity. 8. A suggestion is made to the bank to expand the business globally and offer more and more services to the people abroad. 9. Bank should follow guidelines towards priority sector and get benefits out of it. 10. Offer best customer services, lending on profitable ventures, diversifying the business to cope with the competition. 11. Bank should use latest technologies in banking activities. 12. Few customer has not selected the branch because of less branches in southern region compared to the other region.
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Conclusion
Human beings are no more constraint to the basic necessities in their lives. Their needs have diversified through the ages placing an increase demand on resources. The economic boom in the country has wide open the new challenges and opportunities to the people. This has necessitated timely and easy availability of funds to meet the requirements of institutions and individuals in meeting their goals. Thus to keep up with the pace of this increasing demand, the banking industry have come forward with the credit portfolio to provide funds on relatively easier terms and conditions. Today, banks are committed towards providing more and more number of people with finance with a view to make their lives better. The ever increasing demands of the customers have forced the banking sectors to emerge with new retail products bearing new unique features in them. The competition among the banks cannot be neglected. They have been supplying loans for the purpose of purchase of vehicles , pursue of higher education, or to meet their other personal requirements. The banking industry is witnessing a boom at present boosted by the increasing demand for retail loan products. The demand has arisen as a result of genuine individual needs. From an overall view point demand for retail loans is ever rising and the same would be reflected on the demand for funds. Hence the profitability of this particular industry is expected to take a positive track in the future ahead.
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BIBLOGRAPHY
A Hand Book of Banking by N. S. Toor Ramman Finance management. Finance management and policies by James C. Van Horne. Management accounting principle and practises by R. K. Sharma. Accounting for managers S. P Jain and K.L. Narang. Research methodology by C.R. Kothori. Business Research Methods by Appannaiah Reddy and Ramnath
WEBSITES:
www.statebankofmysore.com www.google.com www.rbi.org.in
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