A Study on Modern Technology Transformation and Customer Requirement in Corporate Banking

8/12/2019 A Study on Modern Technology Transformation and Customer Requirement in Corporate Banking

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Executive summary

The last decade has seen many positive developments in the Indian banking sector. The

policy makers, which comprise the Reserve Bank Of India (RBI). inistry of finance

and related government and financial sector reg!latory entities, have made several

notable efforts to improve reg!lations in the sector. The sector now compares favo!rably

with banking sectors in the region of metries like growth, profitability and non

performing assets ("#$s). $ few banks have established an o!tstanding track record ofinnovations, growth and val!e creation. This is reflected in their market val!ation.

%owever improved reg!lations, innovations growth and val!e creation in the sector

remain limited to a small part of it. The cost of banking intermedation in India is higher

and bank penetration is far lower than in other markets. Indian&s banking ind!stry m!st

strengthen itself significantly if it has to s!pport the modern and vibrant economy which

Indian aspires to be. 'hile the onces for this change lies mainly with bank management

can enabling policy and reg!latory framework will also be critical to their s!ccess.

The st!dy involves the different types of services offered b banks for corporate. The

essence of banking b!siness is the f!nction of accepting deposits from p!blic with the

facility of withdrawal of money by che!e. Besides from the !s!al services, banks now

have started giving additional services right from working capital needs to investment

banking.'orking capital is the core area of banking ind!stry today.

This proect contains both primary and secondary data

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1.INTRODUCTON

*orporate banking represents the wide range of banking and financial services provided

to domestic and international operations of large local corporate and local operations of

m!ltinational corporations. +ervices incl!de access to commercial banking prod!cts,

incl!ding working capital facilities s!ch as domestic and international trade operations

and f!nding channel financing in foreign and overdrafts as well as domestic and

international payments, I"R term loans (incl!ding eternal commercial borrowings in

foreign c!rrency), letters of g!arantee etc

*orporate banking services are an integral part of the corporate investment, Banking and

markets (*IB) str!ct!re, which foc!ses on offering a f!ll range of services to

m!ltinational, large domestic corporate and instit!tional clients. The investments

banking and markets division brings together the advisory and financing, e!ity

sec!rities, asset management, treas!ry and capital markets, and private e!ity activities

of the gro!p to the complete the *IB str!ct!re and provide a complete range of

financial prod!cts to the clients.

*lients are serviced by sector based clients services teams that combine the relationship

managers, prod!ct specialists and ind!stry specialists to develop c!stomi-ed financial

sol!tions. These form the relationship team along with the Investments banking and

advisory division. ach team s!pports the client&s worldwide operations, ens!ring a f!ll

!nderstanding of the company&s b!siness and financial needs.

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1.1OBJECTIVES

To !nderstand the concept!al framework of corporate banking

To !nderstand the several areas !nder corporate banking.

To learn abo!t the lending proced!re of the banks to the corporate.

To find o!t the vario!s prod!cts and services offered by banks.

To !nderstand the f!t!re growth prospect!s in corporate banking

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1.2Research Meth!"#y$

/. #rimary data collected thro!gh 0!estionnaire filled by both bank and corporate.

1. +econdary data collected from books and websites.

2. %RO&I'E O& &EDER(' B(N)

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Tho!gh initially it was known as the Travancore 2ederal Bank, it grad!ally transformed

into a f!ll3fledged bank !nder the able leadership of its 2o!nder, r. 4 # %ormis. The

name 2ederal Bank 5imited was officially anno!nced in the year /678 with its

head!arters nestled on the banks on the river #eriyar..

2.1Visi*$

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Become the dominant 9n!mero !no: bank in 4erala and a leading player in

target markets.

Be the ;tr!sted& partner of choice for target (+, Retail, "RI) c!stomers.

Be a c!stomer3centric organi-ation setting the benchmarks for service.

Offer innovative yet simple prod!cts s!pported by the state3of3the art technology.

%ave a dynamic and energi-ed workforce with a strong sense of belonging.


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cascading profit responsibilities to middle and !nior management.


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Term 'a*s

'e can str!ct!re credit sol!tions to meet yo!r specific short3term or long term f!nding

re!irements. 'e provide str!ct!red term financing sol!tions for infrastr!ct!re, proect

f!nding, real estate and other corporate p!rposes. The loans are provided at competitive

rates and are str!ct!red to enhance yo!r profitability by sched!ling the repayment to

match the cash flow available to repay the debt.

Cr+rate 'a*s

2or a variety of b!siness related p!rposes to corporates

-ri*# ca+ita" /i*a*ce

'e offer working capital finance by way of cash credit, overdraft or working capital

loans s!itably str!ct!red to yo!r needs and yo!r risk profile as a part of consorti!m or as

a sole banker. These prod!cts are designed to ease the li!idity position of the client.

Bi"" &i*a*ce

Trade finance by disco!nting bills

portE import finance

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#re and post shipment finance, forward covers, b!yer&s credit and finance in foreign

c!rrency.

'etter / Cre!it

'e provide for opening inland and import letter of credit facility to facilitate

proc!rement of inventory and capital goods.

Ba* 0uara*tees

'e offer to iss!e vario!s types of g!arantees 3 performance, financial, bid bond etc. O!r

g!arantees are well accepted by government agencies, *apital arket $gencies and all

maor corporate

2. Varius /acets / a*i*#.

(!+t est i*!ustry +ractices.

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The bank mostly lend against appropriate tangible sec!rities s!ch as deposits, shares,

debent!res, proprety,g!arantees, s!pported by tangible sec!rities, life policies, goods,

gold or other precio!s metal. The bank may also lend against intangible sec!rities s!ch

as !ns!pported g!arantees or assignment of s!ms d!e to the borrower by the third

parties. It is essential that the bank follows the proper proced!res in order to obtain good

title when taking a sec!rity. There is a difference between possession and ownership.

The vario!s forms of doc!ments !sed for obtaining different types of sec!rities are also

important. Inade!ate doc!mentation may well ca!se the losses to the bank and is

partic!larly time for the Trade 2inancing doc!mentation and the sec!rities agreement

relating to goods.


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,.,IM%ORT(NCE O& &EE5B(SED SERVICES


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,.T3E (CCOUNT RE'(TIONS3I% M(N(0EMENT$

ME(NIN0$

The acco!nt relationship managers are those who negotiate with

the targeted corporate c!stomers with the terms acceptable to the banks and 9$cco!nt

Relationship anagement $cceptance *riteria or the so called *redit F!idelines. It

sho!ld be internally placed and distrib!ted to every credit manager@officer. These

g!idelines set the minim!m acceptance standards, in simple words, the g!idelines are

aimed to let the acco!nt relationship managers@officers know eactly what they sho!ld

be selling, to whom, at what price and !nder which conditions (sec!rities and other

terms).

DECISION M()IN0$

aking a so!nd decision to etend credit to a corporate c!stomer is a comple process.

This is beca!se corporate c!stomers are normally engaged in a wide range of activities

and are affected by a host of eternal and internal factors that have direct impact on their

ability to meet financial obligations. The credit decision making sho!ld, therefore, be

directed by an internal lending policy that takes into acco!nt s!ch factors and aims to

protect the bankJs assets, preserve its rep!tation and optimi-e the relationship

profitability. Based on the credit g!idelines, the acco!nt relationship eec!tive will have

to s!bmit a credit proposal eval!ating the whole relationship. The *redit val!ation

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process m!st be done systematically and within acceptable standards to maintain a high

!ality credit portfolio. The preparation of the credit proposal m!st be g!ided by

common sense and sensible !dgement.

The amo!nt of details the proposal sho!ld contain nat!rally depends on several

elements, namely the si-e and strength of the c!stomer, the si-e of the bankJs c!rrent and

proposed epos!re, the socio political environment, the economy, the ind!stry and the

bankJs position in relation to other.

CREDIT EV('U(TION$

The bank m!st place a system of credit eval!ation which is based on assessment of

historical, c!rrent and proected elements stated here!nder=

a. &IN(NCI(' (N('4SIS$

+ales, #rofitability, #erformance, 2!nds 2low, working *apital anagement, li!idity,

balance sheet conditions...etc

. O%ER(TIN0 (N('4SIS 6O%ER(TIN0 RIS)S7

Owners, anagement, *ompany, Ind!stry, arkets. In s!mmary, the credit proposal

(review) m!st highlight the 2inancial Risks and Operating Risks. It sho!ld state the

magnit!de and likelihood of s!ch risks i.e. 'hat if scenarios, and how will they be

managedK ost global banks maintain their credit eval!ating standards in an internal

Instr!ction an!al containing the bankJs management instr!ctions regarding each and

every aspect of the credit etension or review process. It sets the management standard

of credit eval!ation to eliminate risks and prevent the decline in profit margins on credit

facilities.

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,.8 COR%OR(TE SERVICES %ROVIDED B4 INDI(N

B(N)S

ME(NIN0$

*orporations, the world over are ettisoning anti!ated cash management practices and

opting to p!t in place sophisticated cash management str!ct!res to garner the associated

economic benefits and d!e to reasons of epediency.

*onversely, banks have taken note of the enormo!s reven!e potential in the fee3based

services segment to prop !p their sagging bottom lines. 'hile appreciating the initiatives

taken by the $dministrative +taff *ollege of India in organi-ing the 'orkshop.

The some of the relevant iss!es, which the banks need to address are as follows.

OBJECTIVE O& C(S3 M(N(0EMENT$

The f!ndamental obective of cash management is ;optimi-ation of li!idity thro!gh animproved flow of f!nds.& In today&s highly competitive environment, where time is

considered as money, deployment of staff to render basic ro!tine tasks does not make

economic sense. $s a se!el, cash management today is not what it !sed to be.

lectronic banking, which began as a passive desktop access to bank balances, is

emerging into comple processes of li!idity management thro!gh n!mero!s

techni!es. $lmost all of the corporations in advanced co!ntries are now planning to

!se the services of banks to help them collect payments on monthly bills they iss!e to

cons!mers and other types of cash management services.

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IM%ORT(NCE O& C(S3 M(N(0EMENT &OR ( COR%OR(TE ENTIT4$

Food cash management is a conscio!sprocess of knowing when, where, and how a

company&s cash needs will occ!rA knowing what the best so!rces for meeting additional

cash needsA and being prepared to meet these needs when they occ!r by keeping good

relationships with bankers and other creditors. +cientific cash management res!lts in

significant savings in time, decrease in interest costs, less paper work and greater

acco!nting acc!racy. #roper cash management creates more control over time and

f!ndsA provides timely access to informationA enables easy employee related paymentsA

s!pports electronic paymentsA prod!ces faster electronic reconciliationA allows for

detection of bookkeeping errorsA red!ces the n!mber of che!es iss!ed and earns interest

income or red!ces interest epense.

*orporations with s!bsidiaries worldwide, can pool everythinginternationally so that

the company can offset the debts with the s!rpl!s monies from vario!s s!bsidiaries.

The end res!lt will transform treas!ry f!nctionas a profit3centre by optimi-ing cash

and p!t it to good !se.

*reative andpro3active cash management sol!tions can contrib!te dramatically to a

company&s profitability and to its competitive edge. The !ltimate p!rpose of proper

management of li!idity, needless to emphasi-e, is to improve the overall prod!ctivity

of f!nds.

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,.9T4%ES O& C(S3 M(N(0EMENT SERVICES$

The men! of cash management services offered by banks abroad is indeed diverse and

tempting. The services broadly fall !nder collection services,


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C(S3 M(N(0EMENT SERVICES 5 INDI(N SCEN(RIO$

It is apposite to review the Indian scenario in this regard. $s we are well aware, banks&

desire for f!nds has lost !nder the onsla!ght of the c!rrent slowdown.


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*iti Bank, +tandard *hartered Bank, $B" $mro Bank, B"#, $"L Frindlays and

%+B* are the foreign banks operating in India, which are prominent among the cash

management services providers. *!rrently, the t!rnover of cash management services in

Indian market is estimated over Rs.1H, >>> crore per month.

+tate Bank of India alone is estimated to handle over Rs./1,>>> crore per month thro!gh

its prod!ct called +BI32$+T. Indian banks are offering services like lectronic f!nds

transfer services, provision of cash related I+ reports, cash pooling services, collection

services, debit transfer services, g!aranteed credit arrangements, sweep prod!cts, ta

payment services, receivables and payables management. 2oreign banks operating in

India are offering regional and global treas!ry management services, li!idity

management services, card services, electronic banking services, e3commerce sol!tions,

acco!nt management services, collection management services, cash delivery

management services and investment sol!tions.

The cash management services offered to Indian corporate are comparable to what their

co!nterparts are getting in advanced co!ntries. Banks reali-ed that if they do not offer

the services re!ired by corporate c!stomers it wo!ld res!lt in a net loss of clientele,

ret!rns and goodwill. Banks in India need to contin!o!sly monitor international trends

in innovations taking place in providing cash management services and swiftly offer

similar services to their corporate clients.

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RESERVE B(N)S INITI(TIVE IN C(S3 M(N(0EMENT

The Reserve Bank of India has been taking a n!mber of initiatives, which will facilitatethe active involvement of commercial banks in the sophisticated cash management

segment. One of the pre3re!isites to ens!re faster and reliable mobility of f!nds in a

co!ntry is to have an efficient payment system.

*onsidering the importance of a rob!st payment system to the economy, the RBI has

taken n!mero!s meas!res since mid ighties to strengthen the payments mechanism in

the co!ntry.

Introd!ction of comp!teri-ed settlement of clearing transactions, !se of agnetic Ink

*haracter Recognition (I*R) technology, provision of inter3city clearing facilities and

high val!e clearing facilities, lectronic *learing +ervice +cheme (*++), lectronic

2!nds Transfer (2T) scheme,


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SOURCIN0 C(S3 M(N(0EMENT SERVICES

It is normally the client3bank relationship, which is a main consideration in choosing abank for cash management. #ricing, obvio!sly, is a very dominant factor .aking a

choice between the local banks and the more highly priced foreign banks !s!ally

depends on how cost savings are presented by the banks. !ltinational corporates with

comple treas!ry operations admire their respective banks& epertise and ability to offer

creative sol!tions

2leibility, reliability, sec!rity and stability have been cited as vital parameters for any

electronic banking system. The systems sho!ld be tailored to provide pertinent reports

and the ability to !pgrade easily in f!t!re.

The technology sho!ld allow real3time cash management with strategic banking

partners. It sho!ld integrate easily with legal framework in place. It sho!ld lower

operating costs and resolve disp!tes !ickly by providing sec!re and legally enforceable

a!dit trails. It sho!ld be capable of red!cing risk of fra!d in electronic f!nds transfers

and other treas!ry activities. It sho!ld also be able to !se a low3cost p!blic network

infrastr!ct!re like Internet, which eliminates the need for dedicated leased lines.

C3(N0IN0 C(S3 M(N(0EMENT %ROCESSES (ND :E5B(N)IN0;$

I""OG$TIO"+=

The enlightened participants in this 'orkshop are aware that the cash management

techni!es have been !ndergoing a metamorphosis as a res!lt of the etensive

technological advancements. #ositioning finance as a val!able part of a b!siness

organi-ation means re3engineering of b!siness processes.

lectronic Bill #resentment and #ayment (B##) is now widely accepted in 'estern

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co!ntries. It replaces the slow and costly process of preparing and mailing paper bills

and receiving che!es as payment. *orporations look to electronic bill presentment and

payment as an opport!nity to epand marketing and sales efforts, enhance c!stomer care

and increase efficiency, while red!cing costs. $s technologies evolve with ama-ing

speed, the IT choices facing treas!rers are becoming more intricate sim!ltaneo!sly

increasing their epectations too. Today, a m!ltinational company has tall demands

from its banker. 'hen the treas!rer sits at his desk, he epects that his comp!ter has to

a!tomatically !pdate his files with real3time information on the company&s acco!nt

balances. 'itho!t moving, he wants to mane!ver f!nds between acco!nts to capt!re

more interest from pooled acco!nts, he demands to lag his payments to mak his cashwork to the f!llest and he desires to get an !p3to3date report on the progress of his

collections.

$s the Internet eplodes into life, companies want to be among the first to !se the

Internet to market their prod!cts, receive orders, deal with s!ppliers and settle

transactions *orporates vis!ali-e technology as a tool to c!t their costs and improve

efficiency.

COR%OR(TE C(S3 M(N(0EMENT TO BENE&IT &ROM E'ECTRONIC

%(4MENTS$

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The new electronic payment prod!cts and services offer the corporate clients animproved bottom line by helping manage cash re!irements. It helps corporate to make

the best !se of their f!nds and provides an effective means of managing their financial

re!irements

+everal of the trends in cash flow forecasting favor the !se of electronic payment

prod!cts like RTF+, lectronic 2!nds Transfer (2T) and card payments.

Improved technology and systems integration makes it more attractive to !se electronic

payment prod!cts beca!se these methods of payment can be incorporated into firm3wide

comp!ting systems.

The new forecasting techni!es also s!ggest !se of electronic payments, beca!se they

offer disaggregated reven!e and spending data that can easily be categori-ed and

st!died.

lectronic payments and cards provide control over incoming f!nds, and allow

companies to limit access to these f!nds to a!thori-ed parties. In addition, limitingcorporate p!rchases to electronic payments makes it easier for firms to monitor cash

o!tflows and prevent !na!thori-ed ependit!res, beca!se these payments are easier to

doc!ment and provide an a!dit trail.

2rom the perspective of a *orporate, the electronic payment systems ens!re speed and

sec!rity of the transaction processing chain, from verification and a!thori-ation to

clearing and settlement. $lso it gives a great deal of freedom from more costly labor,

materials, and acco!nting services that are re!ired in paper3based processing, better

management of cash flow, inventory, and financial planning d!e to swift bank payments.

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C3(''EN0ES TO COM%(NIES IN (V(I'IN0

TEC3NO'O045ORIENTED C(S3 M(N(0EMENTSERVICES &ROM B(N)S$

a. E"ectr*ic Cmmu*icati*


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,.='IMIT(TIONS O& T3E SERVICES$

$ll said and done, the Internet as it operates today has its limitations as a medi!m for

banking and finance. 2or this reason, the conventional means of delivering electronic

banking services will be maintained in parallel with on3line systems at least in the

medi!m term. 'e all agree that the technology is only as good as its !nderlying

services. There is no s!ch thing as one3si-e3fits3all when it comes to electronic banking

prod!cts. "o one prod!ct can provide an absol!te sol!tion to all the c!stomers.

$n electronic banking prod!ct is a means of delivering banking services to the c!stomer

and is only as good as all the operations and processes that !nderpin those services.

1. %rvisi* / CMS y Ba*s 5 Cha""e*#es a*! Issues$

The conventional formal line between treas!ry and control and between cash and

acco!nting strategies is fading. "ow, bankers and controllers are working together

closely in seeking sol!tions in the comple cash management f!nction.

In today&s world, the key differentiator between a s!ccessf!l bank and other bank is the

stress each lays on technology. $s s!ch, let me t!rn yo!r attention to the n!mero!s

challenges bankers need to address s!arely, while gearing !p to provide cash

management services in a technology dominated environment.

2. %rvisi* / Custmi>e! Services$

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One important ingredient of a treas!ry system is ;c!stomi-ation&. Bank&s ability to

c!stomi-e a treas!ry system is critical. The ;!ser interface& is very personal and !sers

want to be comfortable with the look and feel of the system.


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'eb3enablement may be fashionable, b!t what treas!rers really want is the f!nctionality

in prod!cts that help them perform optimally. $fter all, the web is only a delivery

channel. ost corporate electronic banking systems c!rrently !sed are based on old

technology architect!re.

9. S+ecia" C*si!erati* t Sma"" a*! Me!ium Cm+a*ies$

'hen the corporate scene in India is dominated by a m!ltit!de of small and medi!m

companies, a legitimate !estion that arises is, are the high3tech banking cash

management services !st for the large companies or do they have any immediate

practical val!e for smaller companies alsoK

$ltho!gh technology and si-e may not go together banks have to cost3!stify the cash

management services companies !se. "o do!bt, banks did invest a lot in the

technology3based services. B!t with the advent of the Internet and other tools, banks

sho!ld strive to make accessible cash management services to middle and small

companies witho!t totally phasing o!t their eisting hardware.

=. Nee! t -r as a Team$

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'hen banks develop cash management sol!tions, they have to necessarily work directly

with corporate financial controllers and their staff. 'hen o!tso!rcing is involved, with

something as comple as payables or receivables the corporate teams get bigger and

more varied. Besides financial controllers, banks have to work with systems people and

sometimes marketing people.

?. Nee! t -r


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ME(NIN0$

'orking *apital facility is provided to the ind!stry to finance day3to3day prod!ction M

sales. 2or prod!ctionA f!nds are generally re!ired for p!rchase of raw materials, stores,

f!el, for payment of labor, power charges, for storing finished goods till they are sold o!t

M for financing the sales by way of s!ndry debtors @ receivables.

*ash *redit facility is granted to the c!stomers to bridge working capital gap. The Bank

also provides short term loan facility for a period of !p to / year for the p!rpose of

bridging temporary cash flow mismatches arising d!e to vario!s reasons like non3

reali-ation of receivables in time, ro!tine cape etc. The finance etended !nder this

category wo!ld be for meeting the f!nds re!irements for day to day operations of the

!nits i.e., to meet rec!rring epenses s!ch as ac!isition of raw material, the vario!s

epenses connected with prod!cts, conversion of raw materials into finished prod!cts,

marketing and administrative epenses, etc.. The working capital limits wo!ld be

considered only after the proect nearing completion and after ens!ring f!ll tie3!p of the

term loan re!irements of the borrower. These limits wo!ld be either in the form of

fied loans or r!nning acco!nts and @ or bill financing facility.

SECURIT4$

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The credit facilities shall be sec!red by inventories and debtors as may be re!ired

!ant!m and d!ration of the credit and risk perception.

)E4 BENE&ITS$

2!nded facilities, i.e. the bank provides f!nding and assistance to act!ally p!rchase

b!siness assets or to meet b!siness epenses. "on32!nded facilities, i.e. the bank can

iss!e letters of credit or can give a g!arantee on behalf of the c!stomer to the s!ppliers,

Fovernment


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In t!ne with the Reserve Bank of India g!idelines on 5oan +ystem for delivery of bank

*redit for working capital p!rposes to larger borrowers, the same wo!ld be etended in

the form of fied loan (working capital =7> in respect of borrowers enoying aggregate working capital limits of

Rs./> crore and above from the Banking system.

The working capital demand loan facility shall be for a minim!m fied term of 8 days

s!bect to roll over at the option of the borrower concerned

S3ORT TERM COR%OR(TE &IN(NCE MET3ODS O& 'ENDIN0$

5ike many other activities of the banks, method and !ant!m of short3term finance that

can be granted to a corporate was mandated by the Reserve Bank of India till /667.

This control was eercised on the lines s!ggested by the recommendations of a st!dygro!p headed by +hri #rakash Tandon. The st!dy gro!p headed by +hri #rakash Tandon,

the then *hairman of #!nab "ational Bank, was constit!ted by the RBI in !ly /687

with eminent personalities drawn from leading banks, financial instit!tions and a wide

cross3section of the Ind!stry with a view to st!dy the entire gam!t of BankJs finance for

working capital and s!ggest ways for optim!m !tili-ation of Bank credit. This was the

first elaborate attempt by the central bank to organi-e the Bank credit. The report of this

gro!p is widely known as Tandon *ommittee report. ost banks in India even today

contin!e to look at the needs of the corporates in the light of methodology recommended

by the Fro!p. $s per the recommendations of Tandon *ommittee, the corporates sho!ld

be disco!raged from acc!m!lating too m!ch of stocks of c!rrent assets and sho!ld move

towards very lean inventories and receivable levels. The committee even s!ggested the

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maim!m levels of Raw aterial, +tock3in3process and 2inished Foods which a

corporate operating in an ind!stry sho!ld be allowed to acc!m!late.

These levels were termed as inventory and receivable norms. lacs sho!ld be

appraised (calc!lated) !nder this method.

T3IRD MET3OD O& 'ENDIN0$

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Dnder this method, the borrowerJs contrib!tion from long term f!nds will be to the

etent of the entire *OR *DRR"T $++T+, which has been defined by the +t!dy

Fro!p as representing the absol!te minim!m level of raw materials, process stock,

finished goods and stores which are in the pipeline to ens!re contin!ity of prod!ction

and a minim!m of 1H? of the balance c!rrent assets sho!ld be financed o!t of the long

term f!nds pl!s term borrowings. (This method was not accepted for implementation and

hence is of only academic interest)

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,.@EAIM B(N)

port3Import Bank of India is the premier eport finance instit!tion of the co!ntry, set

!p in /6P1 !nder the port3Import Bank of India $ct /6P/. Fovernment of India

la!nched the instit!tion with a mandate, not !st to enhance eports from India, b!t to

integrate the co!ntry&s foreign trade and investment with the overall economic growth.

+ince its inception, im Bank of India has been both a catalyst and a key player in the

promotion of cross border trade and investment. *ommencing operations as a p!rveyor

of eport credit, like other port *redit $gencies in the world, im Bank of India has,

over the period, evolved into an instit!tion that plays a maor role in partnering Indianind!stries, partic!larly the +mall and edi!m nterprises, in their globalisation efforts,

thro!gh a wide range of prod!cts and services offered at all stages of the b!siness cycle,

starting from import of technology and eport prod!ct development to eport

prod!ction, eport marketing, pre3shipment and post3shipment and overseas investment.

EAIM &IN(NCE )E4 BENE&ITS$

E//icie*t service t ur im+rterex+rter c"ie*ts.

*onnectivity with the *!stoms


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The change arners 2oreign *!rrency (2*)


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,.1 %ROJECT &IN(NCE

ME(NIN0$

#roect finance is the financing of long3term infrastr!ct!re and ind!strial proects based

!pon a comple financial str!ct!re where proect debt and e!ity are !sed to finance the

proect. Ds!ally, a proect financing scheme involves a n!mber of e!ity investors,

known as sponsors, as well as a syndicate of banks which provide loans to the operation.

The loans are most commonly non3reco!rse loans, which are sec!red by the proect itself

and paid entirely from its cash flow, rather than from the general assets or

creditworthiness of the proect sponsors, a decision in part s!pported by financial

modeling. The financing is typically sec!red by all of the proect assets, incl!ding the

reven!e3prod!cing contracts.

#roect lenders are given a lien on all of these assets, and are able to ass!me control of a

proect if the proect company has diffic!lties complying with the loan terms.

SE'ECTION O& ( %ROJECT B4 B(N)$

The proposals for proect finance wo!ld be considered by the bank on a selective basis

in view of the larger o!tlay of f!nds an longer d!ration of credit which may have an

adverse impact on bankJs $sset35iability anagement system and strain on its li!idity.

Ds!ally s!ch proects wo!ld be operationalised thro!gh consorti!m arrangement alongwith the Term 5ending 2inancial Instit!tions and other p!blic@ private sector Banks. The

proect wo!ld be appraised by the 5ead Bank of the consorti!m and all other banks

wo!ld accept the appraisal made by the lead bank. Before etending finance for

#roects, the economic feasibility and financial viability of the proect in relation to the

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macro economic conditions prevailing at the time of concept!ali-ation of the proect and

also the likely scenario that may prevail d!ring the normal life span of the proect sho!ld

be established.

The proect sho!ld be able to withstand reasonable levels of variation in cr!cial

parameters which sho!ld be established by sensitivity analysis of the cash flows.

The means of finance for the proect along with provisions to meet contingencies s!ch

as cost@ time overr!n sho!ld be established. The entire so!rce of f!nds for the proect

from so!rces other than that by the promoters shall be f!lly tied3!p before sanction@

disb!rsement of the limits.

'herever the proect is one of !n!s!ally longer d!ration s!ch as infrastr!ct!re

development, the involvement of agencies s!ch as 2inancial Instit!tions and ways of

red!cing the blockage of bankJs f!nd that are so!rced mainly o!t of short term lending

instit!tions, take3o!t financing, sec!riti-ation, Inter3Bank participation *ertificates, etc.

wo!ld be resorted to.

The disb!rsements !nder proect 2inance wo!ld be made strictly in t!ne with the

sanction terms, only after ens!ring the end !se of f!nds already disb!rsed by the

consorti!m, meeting the re!ired margin at each stage of proect implementation and

certification by the competent cons!ltants@ specialists as per the proced!re in vog!e from

time to time and as decided by the consorti!m.

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R(TE O& INTEREST$

The rate of interest on s!ch credit facilities wo!ld be determined based on the borrower

gradation and the interest rate policy of the bank from time to time.

SECURIT4$

The credit facilities shall be sec!red by tangible assets and collaterals as may be

re!ired based on the nat!re of proect, !ant!m and d!ration of the credit, anticipated

ret!rn on investment and risk perception.

ST(TE B(N) O& INDI(

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COR%OR(TE B(N)IN0 O& ST(TE B(N) O& INDI(

INTRODUCTION$

+tate Bank of India (+BI) is the largest bank in India. It is also, meas!red by the n!mber

of branch offices and employees, the largest bank in the world. stablished in /P>N as

Bank of Bengal, it remains the oldest commercial bank in the Indian +!bcontinent. It

provides a range of banking prod!cts thro!gh its vast network in India and overseas,

incl!ding prod!cts aimed at "RIs. 'ith an asset base of /1N billion and its reach, it is a

regional banking behemoth. The Fovernment of India nationali-ed +BI in /6HH with the

Reserve Bank of India having a N>? stake. +BI has laid emphasis on red!cing the h!ge

manpower thro!gh Folden handshake schemes and comp!teri-ing its operations.

BO(RD O& DIRECTORS

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'ist / Directrs * the Ce*tra" Bar! / State Ba* / I*!ia 6(s * th (u#ust

2117

+r.

"o.

"ame


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a momento!s phase of *hange and Transformation Q the two h!ndred year old #!blic

sector behemoth is today stirring o!t of its #!blic +ector legacy and moving with an

ability to give the #rivate and 2oreign Banks a r!n for their money.

The bank is entering into many new b!sinesses with strategic tie !ps Q #ension 2!nds,

Feneral Ins!rance, *!stodial +ervices, #rivate !ity, obile Banking, #oint of +ale

erchant $c!isition, $dvisory +ervices, str!ct!red prod!cts etc Q each one of these

initiatives having a h!ge potential for growth.

The Bank is forging ahead with c!tting edge technology and innovative new banking

models, to epand its R!ral Banking base, looking at the vast !ntapped potential in the

hinterland and proposes to cover />>,>>> villages in the net two years.

It is also foc!sing at the top end of the market, on whole sale banking capabilities to

provide India&s growing mid @ large *orporate with a complete array of prod!cts and

services. It is consolidating its global treas!ry operations and entering into str!ct!red

prod!cts and derivative instr!ments. Today, the Bank is the largest provider of

infrastr!ct!re debt and the largest arranger of eternal commercial borrowings in the

co!ntry. It is the only Indian bank to feat!re in the 2ort!ne H>> list.

The Bank is changing o!tdated front and back end processes to modern c!stomer

friendly processes to help improve the total c!stomer eperience. 'ith abo!t PH>> of its

own />>>> branches and another H/>> branches of its $ssociate Banks already

networked, today it offers the largest banking network to the Indian c!stomer. The Bank

is also in the process of providing complete payment sol!tion to its clientele with its over

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1/>>> $Ts, and other electronic channels s!ch as Internet banking, debit cards, mobile

banking, etc.

'ith fo!r national level $pe Training *olleges and H7 learning *enters spread all over

the co!ntry the Bank is contin!o!sly engaged in skill enhancement of its employees.

+ome of the training programs are attended by bankers from banks in other co!ntries.

The bank is also looking at opport!nities to grow in si-e in India as well as

internationally. It presently has P1 foreign offices in C1 co!ntries across the globe. It has

also 8 +!bsidiaries in India Q +BI *apital arkets, +BI*$# +ec!rities, +BI > two day workshops across the co!ntry and covered over /C>,>>>

employees in a period of />> days !sing abo!t 7>> Trainers, to drive home the message

of *hange and incl!siveness. The workshops fired the imagination of the employees

with some other banks in India as well as other #!blic +ector Organi-ations seeking to

em!late the programme.

EVO'UTION O& SBI

The origin of the +tate Bank of India goes back to the first decade of the nineteenth

cent!ry with the establishment of the Bank of *alc!tta in *alc!tta on 1 !ne /P>N. Three

years later the bank received its charter and was re3designed as the Bank of Bengal (1

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an!ary /P>6). $ !ni!e instit!tion, it was the first oint3stock bank of British India

sponsored by the Fovernment of Bengal. The Bank of Bombay (/H $pril /P7>) and the

Bank of adras (/ !ly /P7C) followed the Bank of Bengal. These three banks remained

at the ape of modern banking in India till their amalgamation as the Imperial Bank of

India on 18 an!ary /61/.

#rimarily $nglo3Indian creations, the three presidency banks came into eistence either

as a res!lt of the comp!lsions of imperial finance or by the felt needs of local !ropean

commerce and were not imposed from o!tside in an arbitrary manner to modernise

IndiaJs economy. Their evol!tion was, however, shaped by ideas c!lled from similar

developments in !rope and ngland, and was infl!enced by changes occ!rring in the

str!ct!re of both the local trading environment and those in the relations of the Indian

economy to the economy of !rope and the global economic framework.

COR%OR(TE B(N)IN0

+BI is a one shop providing financial prod!cts @ services of a wide range for large,medi!m and small c!stomers both domestic and international.

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The +BI&s powerf!l corporate banking formation deploys m!ltiple channels to deliver

integrated sol!tions for all financial challenges faced by the corporate !niverse. The

*orporate Banking Fro!p and the "ational Banking Fro!p are the primary delivery

channels for corporate banking prod!cts.

The *orporate Banking Fro!p consists of dedicated +trategic B!siness Dnits that cater

ecl!sively to specific client gro!ps or speciali-e in partic!lar prod!ct cl!sters. 2oremost

among these speciali-ed gro!ps are the *orporate $cco!nts Fro!p (*$F), foc!sing on

the prime corporate and instit!tional clients of the co!ntry&s biggest b!siness centers.

The others are the #roect 2inance !nit and the 5easing !nit.

The "ational Banking Fro!p also delivers the entire spectr!m of corporate banking

prod!cts to other corporate clients, on a nationwide platform.

COR%OR(TE (CCOUNTS 0ROU% 6C(07

C(0 5 ( +er/ect strate#ic /it

Maret "ea!er ima#e

&cusse! atte*ti*

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&"exi"e Custmer 5 /rie*!"y cre!it +"icies

Structure! %r!ucts 5 &u*! ase! /ee ase!

Time"yF cm+rehe*sive a*! assure! !e"ivery

Cm+etitive +rici*#

3i#h"y si""e! cre!it ex+ertise

C(0 5 SBIGs %ractive res+*se t emer#i*# maret *ee!s

*$F is +trategic B!siness Dnit of +BI, set !p ecl!sively to cater to the specialised

banking needs of top corporate clients of the co!ntry. It was the direct o!tcome of +BIJs

str!ct!ral reorgani-ation in the light of


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providing a one3stop3shop for financial services presently at !mbai, "ew


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internationally accepted models,

ranging from o!r #rime 5ending

Rate(#5R) !pwards.

#roect M *ape

loans

edi!m Term 5oans H38

years or longer in

eceptional cases

+ame as above 3 edi!m Term

5ending Rate (T5R)!pwards.

port *redits #acking *redit,

#ostshipment , 2orfaiting

RBI


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TR(DE &IN(NCES

Iss!ance and advising of


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*onfirmation of port 5etter of *redit.

Iss!ance of F!arantees on behalf of


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-ri*# ca+ita" /i*a*ci*#

$ssistance etended both as 2!nd based and "on32!nd based facilities to*orporates , #artnership firms , #roprietary concerns

'orking *apital finance etended to all segments of ind!stries and services sector

s!ch as IT

Term 'a*s

To s!pport capital ependit!res for setting !p new vent!res as also for epansion,

renovation etc.

'ease &i*a*ce

$n ecl!sive !nit providing one s shopping to *orporates

$ dedicated set !p specialised in financing of infrastr!ct!re and other large proects

cl!sive set !p for handling large ticket leases.

+BIJs #rime 5ending Rates (#5R) are among the lowest

#resently Bank has two #5RJs

+B$R for loans payable on demand and !pto one year

+BT5R for loans payable beyond one year

R Si"ic* %rivate 'imite!

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Cr+rate Overvie>/ and is

head!artered in %yderabad, $ndhra #radesh, India.

Robo +ilicon, for the first time in India, introd!ced 9man!fact!red sand:. It not only is

the perfect s!bstit!te to the precio!s and fast depleting nat!ral reso!rce 3 river sand, b!t

is also a viable, cost3effective and eco3friendly prod!ct. In a very short

span, Robo+and has earned the respect and patronage of leading Ind!stry, real estate and

constr!ction giants in the co!ntry. %aving weathered initial resistance Q a fate common

to every innovative idea in a change3resisting environment, Robo+andS has !ickly

fo!nd acceptance and is today preferred by all !ality3conscio!s constr!ction ind!stry

leaders. The pillars of faith stand firmly on Robo+andS beca!se it protects the

environment, promotes ethical and legal constr!ction activities and also eliminates the

many disadvantages of !sing river sand for p!rposes of constr!ction. $dditionally,

!sing Robo+andS in concrete and masonry res!lts in the s!bstantial saving of cement,

th!s slashing constr!ction costs considerably.

Robo +ilicon began operations in 1>>/ by setting !p a cr!shing plant and !arry in

%yderabad to s!pply man!fact!red sand to the constr!ction ind!stry. Robo was the first

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in the co!ntry to introd!ce the concept of man!fact!red sand. tensive marketing

efforts co!pled with the consistent s!pply made 9Robosand: a generic name for

man!fact!red sand in the constr!ction ind!stry. $t the time of ac!isition, Robo +ilicon

had H !arries.

'ith IG2$, Robo has been rapidly epanding across India to locations s!ch as Gi-ag,


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I*!ia Va"ue &u*!

India Gal!e 2!nd (JIG2J) is a premier private e!ity investment f!nd. It has in ecess ofD+ / Billion (R!pees 7> billion) !nder management committed by high !ality Indian

and international instit!tional investors and family offices. IG2 makes available financial

and intellect!al capital to growing middle3market companies in India.

IG2 has invested in promising companies, partnered progress, and has seen s!ccessf!l

eits. In each pr!dently selected investment, IG2 developed resilient partnerships with

management teams based on m!t!al respect, integrity, and transparency. This, along

with an ability to deliver appropriate s!pport in b!ilding b!sinesses has created great

val!e for all stakeholders.

IG2 investments incl!de a diverse range of ind!stries s!ch as healthcare, retailing,

o!tso!rced services, media M entertainment and precision engineering.

Ma*u/acture! Sa*! 5 ( %ers+ective

vol!tion of 2ine $ggregate Ind!stry in India

The attempts to prod!ce cr!shed or man!fact!red sand in India co!ld be traced to early

H>Js primarily in maor dam works. The foc!s was on !sing different si-e red!ction

techni!es with available reso!rces like rod mills, roller 3cr!shers, and cone cr!shers.

The absence of research in the rep!ted *ivil ngineering Instit!tions abo!t

man!fact!red sand aided a lot of !nscr!p!lo!s !arry operators to perpet!ate the myththat !arry d!st can be !sed in prod!ction of concrete either by complete or partial

replacement of river sand.

arly so!rces of fine M coarse aggregates (1>mm and />mm)=

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The river sand, pebbles and gravel so!rced from river beds were !sed as fine and

coarse aggregates.

The ins!fficient !antities and inconsistent !ality forced the constr!ction ind!stry to

eplore the possibility of si-ing down the locally available rock formations !sing the

cr!shers to prod!ce coarse aggregates of 1>mm and />mm.

The type of machinery !sed was single stage cr!shers and later !pgraded to two stage

cr!shers.

The waste prod!ct generated in the process is !arry d!st which was being given freein the early days is being offered today as a replacement for river sand.

Emer#e*ce / Ma*u/acture! Sa*!

The progress in the b!ilding material research and identification of role of particle shapeand gradation of fine aggregates triggered the !se of man!fact!red sand in the

prod!ction of concrete. The compleity of constr!ction and !se of high strength concrete

in large n!mber of b!ildings is the prime mover along with the scarcity of river sand in

many cities.

Tech*ica" %ers+ective

The !se of man!fact!red sand as a replacement for river sand is increasing with the ban

on sand mining implemented by different states. The other factors are the general decline

in the availability of river sand and press!re from active environmental gro!ps to protect

the nat!re.

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The phenomenal rise in the constr!ction activity in the last decade has contrib!ted to the

wide gap between the s!pply and demand of river sand. $ lot of damage has been ca!sed

to the eco3systems by carrying o!t dredging operations on the sand beds leading to the

depletion of gro!nd water levels in the co!ntry.

R"e / /i*e a##re#ates i* c*crete$

It is accepted fact that sand plays a very important role in the prod!ction of concrete.

The feat!res of workability, strength and d!rability are directly dependent on the

properties of the sand !sed in the making of concrete.

C*ce+t / ma*u/acture! sa*!$

$ccording to ind!stry reports there is a maor shift in the mindset of the *onstr!ction

Ind!stry towards eploring s!bstit!tes for river sand. $cross the 'orld there is growing

s!pport for the increased !se of man!fact!red sand !sed in the prod!ction of concrete.

The properties of particle shape, consistent gradation and -ero imp!rities are the reason

for the preference by str!ct!ral cons!ltants and concrete technologists. The imperative

need for clean sand, eliminating the constraints of river sand like availability, pricefl!ct!ation etc, have made man!fact!red sand the perfect s!bstit!te for river sand.

Ma*u/acturi*# +rcess a*! its sta*!ar!s$

The sand is man!fact!red in a three stage cr!shing process. The raw material is either

granite or basalt rock. The G+I which is also referred as sand making machine is in the

Tertiary +tage. The process adopted is similar to the river sand generation by nat!re. The

G+I applies the principle of rock on rock collision at a high velocity shaping the sand

particles.

The plant works on the principle of contin!o!s feed in closed circ!it and adopts the

techni!e synonymo!s and comparable to nat!reJs prod!ction of river sand. The

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complete man!fact!ring process takes min!tes when compared to the nat!re which

happens over millions of years.

The prod!ct is prod!ced to I+ CPC standards.

%rcess

O!r !arrying process typically begins with drilling and blasting the rock into smaller

pieces. Bore holes are drilled in the blast site and filled with eplosives. The blast breaks

!p the rock into smaller pieces that are loaded and ha!led to the plant.

The plant consists of three circ!its namely #rimary circ!it, +econdary circ!it and

Tertiary circ!it wherein a three3stage cr!shing takes place. $ H>> mm down si-e granite

rock that is bro!ght from the !arry via operations which involve (deleted ;involves&)

drilling, blasting, segregation, secondary breaking and transportation to the plant, is fed

into to the #rimary *irc!it consisting of one aw *r!sher that si-es down this granite

rock to prod!ce /H>mm down si-e aggregate. This /H> mm down si-e rock is fed into

the +econdary *irc!it consisting of one *one *r!sher to prod!ce a 7> mm down si-e

aggregate which in t!rn is fed into the Tertiary *irc!it consisting one Gertical +haftImpactor that prod!ces +and and $ggregate of the re!ired Fradation M +hape.

The installed capacity of the plant is 1>> T#% (Tons@%r.) of Robo+and and Robo shaped

$ggregate of 1> mm M /> mm si-e.

%"a*t Machi*ery

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The river sand, pebbles and gravel so!rced from river beds were !sed as fine and coarse

aggregates.

The plant works on the principle of contin!o!s feed in closed circ!it

River sand is prod!ced by flowing of stones in big floods from mo!ntains to streams

to big rivers by the coll!sion of rock3on3rock thereby forming a mechanism of impact3

clearage3attrition3abrasion by which h!ge deposits are created

The Gertical +haft Impactor applies a similar principle of rock3on3rock coll!sion for

cr!shing

The Barmac Rock3on3Rock Impactor !ses a feild proven rock lined rotor that acts as

velocity stone h!rling a contin!o!s rock stream into a tightly packed rock lined cr!shing

chamber

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The rotor contin!o!sly discharges energi-ed stone particles into a highly t!rb!lent

particle clo!d contained within the cr!shing chamber where red!ction occ!rs primarily

by Rock3on3Rock impact, attrition and abrasion

Th!s the process is very synonymo!s to nat!res process of creating san

Hua"ity Testi*#

The +ieve $nalysis tests are cond!cted on Robo+andS 1>mm and />mm everyday on

samples collected from conveyor belts, stock piles and loaded tr!cks

The following e!ipment is re!ired and is available at all o!r plants

Sieves / !i//ere*t si>es

Sieve Shaer

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Ove*

Sam+"i*# C*es

$ll o!r sales officers are alos trained to carry o!t these tests at c!stomer locations

The Gertical +haft Impactor applies a similar principle of rock3on3rock coll!sion for

cr!shing

The sand is classified into fo!r -ones as per I+ CPC norms

%"a*t 'cati*s

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HUESTION(IRE &OR T3E B(N)S 6&EDER(' B(N)7

INTERVIE-ER$ MR5 JOSE

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1.-hat are the !i//ere*t +r!ucts a*! services //ere! u*!er cr+rate uyi*# y

yur a*s

$ns=

2D"< B$+< "O" 2D"< B$+bps.

1.2ORIF" *DRR"*

C.U#ORT RBI "OR+ "FOTI$T< O" *$+

TO *$+ B$"+ I+

7.OT%R HH?*O"*++IO" TO "OR$5

+RGI*+ *%$RF+

H.5TTR O2 *R


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.-hat are the *e#tiati*s tactics use! y the cm+a*y t tai* maximumuti"isati* / a* /aci"ities.

$ns= 'e offer vol!me b!siness which works as a sweeter to the banks.

8. 'ist the e*e/its #ive* y the a*s

$ns=

2D"< B"2IT+ "O"32D"


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Reason if so W

8. -hich !e+artme*t !eci!es * the a*


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"$ O2 T% B$"4+ +RGI*+ $G$I5

Documents

A Study on Modern Technology Transformation and Customer Requirement in Corporate Banking