Cp Projact Final

8/3/2019 Cp Projact Final

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A

COMPREHENSIVE PROJECT

ON

“PROBLEMS OF SMALL SCALE INDUSTRIES BORROWERS AND MEASURES

INITIATED BY THE SURAT DISTRICT CO-OPERATIVE BANK TO MITIGATE

THEM YEAR 2010-2011”

SUBMITTED BY

MEGHA R. SHAH

&

BHAVIN TIMBADIYA

S. R. LUTHRA INSTITUTE OF MANAGEMENT

INSTITUTE CODE: - 805

BATCH: 2010-2012

GUJARAT TECHNOLOGICAL UNIVERSITY



TABLE OF CONTENT

SR. NO. PARTICULAR PAGE NO.Ch-1 Introduction of the industry

Ch-2 Introduction to company

Ch-3 Literature review

Ch-4 Research Methodology

4.1 Problem Statement

4.2 Objective of the Study

4.3 Benefit of the Study

4.4 Limitation of the Study

4.5 Research Design

4.6 Data Collection Tools

Ch-5 Data Analysis

Ch-6 Findings

Ch-7 Conclusion

Ch-8 Recommendations

Ch-9 Bibliography



CHAPTER-1CHAPTER-1

INDUSTRYINDUSTRY

PROFILEPROFILE



INTRODUCTION OF BANKING INDUSTRY

DEFINITION OF THE BANK

As per Banking Regulation Act, 1949 (section 5):

“The bank is the institutions which accept the deposits from the public, repay the same on

their demands by cheques, demand draft or by order, for the purpose of investment and lending.”

Sayers more clearly states:

“We can define bank as an institution whose debts (Bank Deposits) are widely accepted

in settlement of the other people’s debts to each other.”

HISTORY OF BANKING IN INDIA

Banking in India originated in the first decade of 18th century. The first banks were

The General Bank of India, which started in 1786, and Bank of Hindustan, both of

which are now defunct.

The oldest bank in existence in India is the State Bank of India, which originated in the

"The Bank of Bengal" in Calcutta in June 1806.

This was one of the three presidency banks, the other two being the Bank of Bombay

And the Bank of Madras. The presidency banks were established under charters from the

British East India Company.

They merged in 1925 to form the Imperial Bank of India, which, upon India's

independence, became the State Bank of India.

For many years the Presidency banks acted as quasi-central banks, as did their

Successors.

The Reserve Bank of India formally took on the responsibility of regulating the Indian

banking sector from 1935. After India's independence in 1947, the Reserve Bank was

nationalized and given broader powers.



EARLY HISTORY

The first fully Indian owned bank was the Allahabad Bank, established in 1865.However,

at the end of late-18th century; there were hardly any banks in India in the modern sense

of the term.

The American Civil War stopped the supply of cotton to Lancashire from the

Confederate States. Promoters opened banks banks to finance trading in Indian cotton.

With large exposure to speculative ventures, most of the banks opened in India during

that period failed.

The depositors lost money and lost interest in keeping deposits with banks.

Subsequently, banking in India remained the exclusive domain of Europeans for next

several decades until the beginning of the 20th century. Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire

d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in

1862; branches in Madras and Pondichery, then a French colony, followed. Calcutta was

the most active trading port in India, mainly due to the trade of the British Empire, and so

became a banking center.

NATIONALIZED BANKS IN INDIA

Banking System in India is dominated by nationalized banks. The nationalization of

banks in India took place in 1969 by Mrs. Indira Gandhi the then prime minister.

The major objective behind nationalization was to spread banking infrastructure in rural

areas and make available cheap finance to Indian farmers.

Fourteen banks were nationalized in 1969. Before 1969, State Bank of India (SBI) was

the only public sector bank in India.

SBI was nationalized in 1955 under the SBI Act of 1955. The second phase of nationalization of Indian banks took place in the year 1980. Seven more banks were

nationalized with deposits over 200 crores.



PRIVATE BANKS IN INDIA

All the banks in India were earlier private banks. They were founded in the re

independence era to cater to the banking needs of the people.

But after nationalization of banks in 1969 public sector banks came to occupy dominant

role in the banking structure. Private sector banking in India received a fillip in 1994

when Reserve Bank of India encouraged setting up of private banks as part of its policy

of liberalization of the Indian Banking Industry.

Housing Development Finance Corporation Limited (HDFC) was amongst the first to

receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank

in the private sector. Private Banks have played a major role in the development of Indian

banking industry.

They have made banking more efficient and customer friendly. In the process they have

jolted public sector banks out of complacency and forced them to become more

competitive.

For the past three decades India's banking system has several outstanding achievements to its

credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or

cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of

the country. This is one of the main reasons of India's growth process.

The government's regular policy for Indian bank since 1969 has paid rich dividends with the

nationalization of 14 major private banks of India.

The first bank in India, though conservative, was established in 1786. From 1786 till today, the

journey of Indian Banking System can be segregated into three distinct phases. They are as

mentioned below:

•

Early phase from 1786 to 1969 of Indian Banks• Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.

• New phase of Indian Banking System with the advent of Indian Financial & Banking

Sector Reforms after 1991.

http://finance.indiamart.com/investment_in_india/banking_in_india.html

http://finance.indiamart.com/investment_in_india/banking_in_india.html



CURRENT INDIAN BANKING SYSTEM SCENARIO

Currently India is facing difficulty in getting deposits. There are many reasons behind this

problem.

Two points for what was happening in banking and investment sector in the last 5 years

1. Increased consumerism: If we look at the consumption pattern in last 5 years, people

were moving from being savers to consumers, i.e., more emphasis on benefits gained today

rather than gains received through savings in future, this changing attitude is one of the

reasons for higher growth in lending compared to deposits.

2. Alternatives and risks: People were looking for more alternatives like mutual funds,

different insurance schemes, stock market, etc. People were moving to these products with

higher return expectations. These instruments also have higher risk and increased income

level people who deposit high amounts of money into banks were ready to take these high-

risk alternatives.

3. But now the situation will be slightly better for banking system in India because investors

are losing a lot of wealth in stock markets and mutual funds. People will realize the

importance of safer investment vehicle and will start diversifying their portfolio with

increased exposure to safer instruments like bank deposits

INTRODUCTION OF CO-OPERATIVE BANK

The Co-operative banks in India started functioning almost 100 years ago. The Cooperative bank

is an important constituent of the Indian Financial System, judging by the role assigned to co

operative, the expectations the co operative is supposed to fulfill, their number, and the number

of offices the cooperative bank operate. Though the co-operative movement originated in the

West, but the importance of such banks have assumed in India is rarely paralleled anywhere elsein the world. The co-operative banks in India play an important role even today in rural

financing. The businesses of co-operative bank in the urban areas also have increased

phenomenally in recent years due to the sharp increase in the number of primary co-operative

banks.

http://hubpages.com/hub/Banking-system-in-India-Why-banks-in-India-are-facing-difficulty-in-getting-deposits







The co-operative banks provide credit and other allied facilities to the rural and agricultural

sectors. The drawn of this century saw the evaluation of the co-operative movement in India. Co-

operative societies came into being when the Co-operative banks which are engaged in serving

the industrial and commercial sectors Societies Act, 1904, was enacted. The movement was

started with the aim of providing farmers funds with low rates of interest so that exploitation by

the village moneylenders is foiled. The Act provided for the formation of co-operative credit

societies and a number of small primary credit societies were established in various parts of the

country. These societies, however, could not mobilize enough resources as compared to loans

demanded by its members. This led to the enactment of a new act in 1912.

Although co-operative banks in India have shown progress since their establishment, there still

exist a number of defects in the organization. This has led qualitative improvement to suffer.

However, the Reserve Bank Of India took the initiative to revitalize, reorganized and promotes

the growth of co-operative bank in India. Under the Banking Regulation Act of 1949, Co-

operative Banks have been brought under the control of the Reserve Bank of India.

Cooperative banks in India give finance to rural areas under:

•

Farming• Cattle

• Milk

• Hatchery

• Personal finance

Cooperative banks in India give finance to urban areas under:

•

Self-employment• Industries

• Small scale units

• Home finance

• Consumer finance

• Personal finance



Structure of Co-Operative Banks:

Co-Operative Banking system in India has the shape of pyramid, i.e. a three-tire

structure, constituted by:

Primary credit society

Central Co-operative Banks

State Co-operative Banks

Land Development Bank

Urban Co-operative Banks

State Land Development Banks.

NABARD and the Co-operative Sector

Central

Co-

Operative

Banks

Land

Developme

nt Banks

State Co-

Operative

Banks

Urban Co-

Operative

Banks

Primary

Agriculture

Credit

Banks

State Land

Development

Banks

Co-Operative



National Bank for Agriculture and Rural Development (NABARD) was set up as an apex

Development Bank on July 12, 1982 with a mandate for facilitating investment and production

credit to promote and develop agriculture, small-scale industries, cottage and village industries,

handicrafts and other rural crafts. NABARD acts as a regulator for Co-operative banks. In

discharging its role to promote integrated and sustainable rural development and secure

prosperity of rural areas, NABARD is entrusted with the task of:

1. Providing refinance to lending institutions in rural areas;

2. Promoting institution building;

3. Coordinating the operations of rural credit

4. institutions; and

5. Evaluating, monitoring and inspecting the rural credit institutions.

Besides, NABARD also maintains liaison with the Government of India, State

Governments, the Reserve Bank and other national level institutions concerned with regard to

policy formulation relating to rural development.



CHAPTER-2CHAPTER-2

COMPANYCOMPANY

PROFILEPROFILE

THE SURAT DISTRICT CO-OPERATIVE BANK



BRIEF HISTORY

the year 1909 on 17th June, with the strenuous efforts of Late Shri B.A.Modi and Late

Shri K.G.Desai, Society viz. “The Surat Dist Co. Operative (Urban) Union Limited” was

registered. In the year 1921, this society had undertaken banking activities in absolute

terms and in 1923, The Surat District Co. Operative (Urban) Union Limited was

converted into The Surat District Co-operative Bank Ltd., The work extended to the

entire Surat District, which had 21 talukas and a vast working area with geographical

variations. The coastal area which included city of Surat and towns like Navasari, Bulsar,

Bilimora, sizeable tribal areas with hills and dense forests.

The Vast Surat District was bifurcated in1965 and district of Bulsar was separated. At present, there are 15 talukas in the Surat district, of which 9 are in the tribal area.

However the Surat District is again bifurcated from 2nd of October-2007 and Tapi District

comprising of five blocks viz. Nizar, Uchhal, Songadh, Vyara and Valod was created.

But for administrative convenience there is only one District Bank viz. The Surat District

Co-operative Bank has been functioning for both the Districts i.e., Surat District and Tapi

District.Bank had separate department for agriculture advance from the year 1944, and

became an effective central agency for co-ordination and smooth flow of finance to co-

operative sector in the district.

Co-operative organizations like,

The Surat District Milk Producer’s Co-op. Union Ltd. (SUMUL),

The Purushottam Farmers Co-op. Ginning & Pressing Society Ltd.,

The Surat District Co-op. Spinning Mills Ltd.,

The Surat Jilla Sahakari Sale & Purchase Union,

The Surat Central Co-op. Stores Ltd.,

Cotton Co-op. Societies of Olpad Taluka,



have since been developed and Bank had provided timely assistance to them. During this

period, Forest Labourers Co-op. Societies were also very active in tribal area and were

engaged in coop cutting activity for which substantial finance was provided to them.

After 1960, when Shree Khedut Sahakari Khand Udyog Mandali Ltd., Bardoli Came into

existence, the entire Surat District gradually became a sugar belt. All existing Sugar

factories had teething financial troubles in the beginning. However, Bank had provided

them enough finance as also assisted even for meeting share capital also. The sugarcane

crop has now become principal crop in the district, and out of total cultivable area of

4,90,000 hectares, 83,191 hectares is under sugarcane cultivation. This revolution in

agriculture was amply supported by the Surat District Co-operative Bank. These factories

have become main strength of the economic structure of the district, particularly for farmers.

Bank has been enjoying privilege of having prominent citizens in fields like Social, Co-

operation and Agriculture, on its Board. The present and former members of the Board

included outstanding Lawyers, Members of Parliament, District Panchayat Presidents,

Mayor of Surat City and Leaders from various walks of life including Ministers.

Immediate past Chairman of the Board Shree Pramodbhai K. Desai was awarded “KakaSaheb Award” for his outstanding services to the society and was also awarded by the

Gujarat State Co-operative Union “Sahakari Award”. Shree Popatbhai Vyas, the then

Director on the Board, remained as Home Minister of the State. Shree Dilipbhai Bhakta,

the present Chairman is also the Chairman of Madhi Vibhag Khand Udyog Sahakari

Mandli Ltd. He has been doing excellent job for upliftment of Co-operative movement in

the Districts. M/s. Kribhco has awarded him with “Sahakari Shiramani Award” in the

year 2008.

Board has formed Committees for Loans, Staff matters, legal matters and computer etc.

Bank has been committed for overall upliftment of the society and for the purpose special

corpus amounting to Rs.6.41 crores has been created so far and from the interest income

of the corpus donations are being given to the Hospitals, Schools, Colleges and Social



Charitable Institutions. In the year 2002 Bank had donated Rs.50/- lakhs for the ultimate

benefit of people affected with natural calamities in addition to Rs.26/- lakhs or so to the

different organizations setup, for betterment of medical education etc. Further during the

cenetary year Bank had donated sizeable amount for upliftment of education, medical

assistance and economic growth…. of the Adivasi community. Also donations were

given to the institutions working for physically handicapped children.

Computerization

Out of 59 branches of the Bank, all branches have been fully computerized. They have

successfully implemented Central Data Base System and by the end of the current half

year they will start RTGS facility.

Management/Staff relations

Relations with the staff are quite cordial. No strike, Pen Down, Lay-off or otherwise,

have ever occurred so far. Better Pay scales and other perquisite like reimbursement of

Medical Bills, Leave Fare Concession, Leave Encashment etc. are being given to the

employees to their utmost satisfaction.

One director from each Taluka 14

Two individual directors 2One director from Surat city 1

Three nominated director from state government 3

One director from The Gujarat State CO-OP. Bank Ltd. 1

District Registrar (Co.op.Societies), Surat 1

TOTAL MEMBERS 22

Management has always remained progressive, be a challenge after Bank Nationalizationintroduction of nonfarm advances, introduction of New banking concepts in liberalized

economy.

Board has formed committees for loans, staff matters, Legal matters etc. Powers have been

delegated appropriately to smoothen day to day working. .



Deposits:

Growth of deposit was steady and in harmony with Advances. At the end of March 2007 deposit

of bank was Rs. 1203.40 crores.

Advances:

It is obvious true as the major crop of the district is sugar cane. There are 8 sugar factories in Co-

operative sector, which have a turnover exceeding Rs.600/- crores and as such, bank’s major

share goes to this sector. Major chunk of advances goes to sugar sector earlier.

In the last decade, bank has gradually paid more attention to non agriculture and Individualadvances. New schemes, to finance for consumer durables, vehicles, House construction, and

professional loans also have been introduced. More attention is paid to develop banking routine

business also. Bank has actively taken up the steps for diversification of Loan portfolio. Powers

are delegated to the branch Managers to sanction loans up to Rs.5, 00,000/- for “A1-Grade

branch and Rs.3, 00,000/- for ‘B’ Grade branch under individual nonfarm sector loans. Also

powers are delegated to the branch Managers to sanction loans up to Rs.1, 00,000/- of all

branches under individual farm sector loans which is also increased up to Rs. 2 lacs.

Branches

There are 59 branches of Surat district co-operative bank and all are fully computerized.

Awards and Achievements:

The bank was judged as best bank, and also the best performer award for the year 1996-97 by

NABARD. Reserve Bank of India has granted license to the bank to carry out banking business

in entire India especially when very few DCCB'S are having such type of license. Bank has

always been securing audit classification under category "A" and has been paying highest

permissible dividend to its members, under state co-operative Act.

BOARD OF DIRECTORS



Sr. no Board of directors

1 Shri Dilipbhai B Bhakt

2 Shri Amarshinh J Chaudhari

3 Shri Maganbhai R Patel

4 Shri Narayanbhai H Donvala

5 Shri Ramanbhai A Patel

6 Shri Shradbhai Shankar Patel

7 Shri Maganbhai B Vasava

8 Shri Jayansinghbhai D Vasava

9 Shri Kiritbhai R Desai

10 Shri Pravinchndra Ch. Parekh

11 Shri Prabhubhai N Vasava

12 Shri Sureshbhai J Patel

13 Shri Pradipshigh G Atodaria

14 Shri Chotubhai L Patel

15 Dr. Vikasben K Desai

16 Shri Chhotubahi L Patel

17 Shri Nayanbhai N Bhartiya

VISION:-

To finance co-operative societies in the district of Surat affiliated to the bank and

generally to carry on banking business of all types.

To draw accept enclose, negotiate, buy and sell, negotiable instruments and dividend

warrants in accordance with the rules framed by the board of directors from time to time.

To organize and develop co-operative societies within the district.



To arrange for supervision and inspection of affiliated co-operative societies and to assess

their credit.

To advances loans and\or overdrafts to agriculturists admitted as ordinary or nominal

members upon personal security of movable property including crops and marketing of

agricultural produce.

MISSION AND VALUES

Customer Service and Product Innovation tuned to diverse needs of individual and

corporate clientele.

Continuous technology up gradation while maintaining human values.

Progressive globalization and achieving international standards.

Efficiency and effectiveness built on ethical practices.

Customer Satisfaction through

providing quality service effectively and efficiently

"Smile, it enhances your face value" is a service quality stressed on

Periodic Customer Service Audits

Maximization of Stakeholder value

Success through Teamwork, Integrity and People

INNER STRENGTH

1. Dedicated and well trained staff.

2. Long standing clients.

3. Excellent customer relationship.

4. Effective front-end services.

5. Trendsetters in high tech banking.

6. Facility of more local deposit.

FUTURE PLAN



The Surat District Co-operative Bank completed a century of its existence on

Wednesday. Founded on June 17, 1909, the bank entered its 101st year on Thursday and has set

ambitious growth plans for the coming years.

"Our current business is around Rs2, 300 crore, which includes deposits of Rs1, 743 crore

and advances of Rs567 crore. We are aiming to achieve business of more than Rs3, 000

crore”

Customer Service Available in Surat Dis. Co-operative Bank

DEPOSITS:

1) Current Account:

The current accounts with The Surat Dist. Co-op. bank Ltd., promises you a unique banking

experience through innovative features and best services for businessmen, firms, companies,

public enterprises etc. that have numerous daily banking transact.

2) Savings Accounts:

A safe and easy way to save your money is with a bank savings account. Interest will be earned

on the money you have on deposit at the bank.

3) Fixed Deposit:

Bank fixed deposits are one of the most common savings scheme open to an average investor.

Fixed deposits also give a higher rate of interest than a savings bank account. Monthly interest

facility also available in this scheme.

4) Recurring Deposit:

Recurring Deposit Scheme is meant for investor who wants to deposit a fixed amount every

month. The scheme, a systematic way for long term savings is one of the best investment

options for the low income group.



INSURANCE

Bank enters in insurance sector and providing two types of insurance.

1. General insurance:

The Surat District Co-Op Bank Ltd. offers various general insurance policies provided by

United India Insurance Company.

2. Life insurance:

The Surat District Co-Op Bank Ltd. offers various life insurance policies provided by

AVIVA Life Insurance.

LOANS AND ADVANCES

The Surat Dist. Co-operative Bank provides different types of loan at less interest rate. The

different type of loans as specified below and we will see each in detail in next chapter.

Loans Against Government Securities

Individual Home consumable Loan

Individual Vehicle Loan

Loan for higher education studies

Loan Base on Government Scheme

Individual Housing Loan

Loan against Fixed Deposit

Business Loan

Composite Loan

Loan for small Scale Industrial (S.S.I.) unit

Technology Up gradation Fund Scheme

REVIEW OF LITERATURE



BRAHMANANDAM, G, N., RAI, H.L., DAKSHINA MURTHY, D, “Financing

Small Scale Sector”. The Role of Banks” INDIAN BANKING TODAY AND

TOMORROW, MAY 1981-the above article was prepared on the role of banks in

financing the SMEs in the year 1981. At those times the Indian banking was not all

interested in financing the SMEs, because of their credit worthiness. Later due to changes

in the industrial policy of India, the commercial banks come forward made immense help

to the growth of SMEs. This article was written before the economic reforms taken place.

Here is a gap for more analysis about the role of the banks in the post economic reforms.

My study on this topic totally focused on the credit facilities available to the SMEs in the

wake of MSME act 2006. Due to the presence of the gap about the present to day

activities are different to those of 1980’s. I made in depth study of the bankers role in

providing the credit to promote the SMEs.

CHOPRA, K.C., “Financing for the Decentralized sector –small and medium industries”

THE BANKER, AUGEST, 2006 – The above article prepared on the thesis, reveals the

financing for the SMEs in the decentralized sector. This article helped me in selecting the

path for my study on credit facilities for SMEs. The article vividly discussed about the

possible ways to finance the SMEs in the decentralized sector like agricultural based and

artisan based SMEs. Really there is a gap between the centralized and decentralized

sectors in getting the finance from the banks. The banks are very much lenient in

providing lone facilities to the centralized sector. Through my study I made an attempt to

study the intricacies faced by the decentralized sector SMEs in Guntur District, well

known for its agricultural based industries.

JAILAL SAAW,”Growth of small scale industries in India” JOURNAL OF

INDUSTRY AND TRADE, April -2005- The growth of small and medium industries in

India was discussed in the above article. The expected growth was not there because of

lot of root causes to sickness and under development in the SME sector. This article

discussed about the slow growth rate of SMEs, dues to several problems.



JAYA PRAKASH REDDY, R., BRAHANANDAM G.N., “Small Scale Sector:

problems and prospects” YOJANA 1-15, JAN, 1987- the above article deals with the

various problems like marketing, raw material, labor, technical and financial problems.

The focus on the finance related issue is very limited. They gave more importance to the

procurement of raw material and marketing and labor problems in SME segment. But not

discussed about the credit facilities for the SMEs.

KAURA, M.V., SHARMA G.L.,”Financing Small Industries – institution should

Change Their Attitudes, Procedures” “JOURNAL OF INDUSTRY AND TRADE,

MARCH, 1999, - the above article discussed very vividly the attitudes of the financial

institutions where belong to Central Government or State Government or the

Governmental Agencies promoted for these propose. In the wake of the MSME act 2006

passed in the interest of the small scale sector by the Government of India, the attitude of

the financial institutions towards SME sector was totally changing The employees of

above said financial institutions are very much helpful and friendly with the promoters of

the SMEs.

NAMBIAR P.C.D., “FINANCING FOR PRIORITY SECTORS” S.B.I MONYHLY

REVIEW DEC16, 2007-The article on the above topic paved the way for the thinking

strategy for the financing the small scale and medium scale industries by the bank offers.

The Government of India through its industrial policy clearly stated that the commercial

banks should give priority treatment to the SMEs. The nature of the banking officials also

discussed in the article. But that is not sufficient to promote the SME sector because the

sector was totally neglected for the last several decades due to invasion of the MNCs. By

enacting the MSME act, 2006 the government of India clearly indicated the signal to the

banking people to provide the credit facilities to the SMEs. This article is very much

helpful in preparing the script for my thesis.



RAMACHANDRA, K.S., REVIVING SICK UNITS, “FINANCIAL EXPRESS” ACT

9, 2001 – the above article discussed the reviving the sick SSIs in various aspects, like

providing technology, management training, skilled labor, export promotion and giving

finance. The root cause for all the above problems is the financial problem. The financial

institution should provide sufficient amount at the easy disbursal system to promote the

SSIs.

SAHNEY, M., “BANKS ASKED TO STEM INDUSTRIAL SICKNESS”

INDUSTRIAL INDIA VOL 36, 12 DEC 2005. Through this the author tires to express

the need for banks intervention in the promotion of the SSIs. The officials of the banks in

India are belong to middle class families and unaware of the industrial promotion and its

need. Mere advice to the bankers is not helpful. So for that reason SRIMATY INDIRA

GANDI nationalized all private banks for the development of agricultural sector in 1971.

The MSME act 2006 instigates the banks to provide the credit facilities without any

hesitation to the SSIs.

SOUNDARRAJA, INANCING SMALL SCALE INDUSTRIES, A REPORT,

“RESERVEBANK OF INDIA BULLETIN 1980”APR –the reserve bank as a central

bank and bankers bank and the prime lending bank to the government should take

initiatives to promote the SSI sector. The author is very interested in financing the small

and medium scale industries in India, because it is providing more employment than any

other sector. It arrests the migration to the cities from the villages in search of better jobs

and better facilities. This topic has given me the encouragement to think in this way for

the betterment of village and cottage industry development.

EIM (2005) in his study on technology upgradation observed that growing enthusiasm for

internationalization by new technology based firms has led to a general perception that all

Small and Medium Enterprises, irrespective of industrial activity, can enter foreign

market through Foreign Direct Investment.



RESEARCH METHODOLOGY

Problem Identification:-

• SSI is one of the growing sectors of the country even though they are facing so many

problems which restrict the growth

1. Under-utilization of Capacities.

2. Inadequate and Untimely Credit Flows.

3. Inability in Technology up gradation.

4. Inefficient raw material procurement.

5. Poor financial situations and low levels of R&D

6. Inability to Market Finished Goods.7. Ineffective monitoring and feedback mechanism.

8. Shortage of power

9. Lack of awareness of credit facilities available

10. Lack of knowledge about various credit schemes

11. Overdependence on purchases by government etc…………

RESEARCH OBJECTIVE:-

1. To examine the growth of SSI industries.

2. The study about credit facilities offered to the SSIs by the banks.

3. To analyze government’s support in obtaining credit facilities.

4. To study about financial problems of SSIs regarding loan.

5. RBI guide line and SEBI guide line

6. How working capital financed to SSIs i.e. the main source of finance available for SSIs.

7. To study about working capital.

It can be observed that by and large, SSIs in India met the expectations of the

Government in this respect. SSIs developed in a manner, which made it possible



For them to achieve the following objectives:

To High contribution to domestic production

To Significant export earnings

To Low investment requirements

To Operational flexibility

To Location wise mobility

To Low intensive imports

To Capacities to develop appropriate indigenous technology

To Import substitution

To Contribution towards defense production

To Technology – oriented industries

To Competitiveness in domestic and export markets

Developing the research plan:

Once the problem is identified, the next step is to design a plan for getting the

information needed to solve the problem. This study gives the adequate information for

getting into the main research through exploratory approach which is to be used to

precede further process of finding the influencing factors.

• Data Collection Method:

The data needed for carrying out the research work is divided into two parts:

1. PRIMARY DATA

2. SECONDARY DATA

• Primary Data: Information has also been gathered through discussions with the

employees of THE SURAT DISTRICT CO-OPERATIVE bank. And different segments

effects on generating Credit Services for SSI’s by THE SURAT DISTRICT CO-



OPERATIVE bank.

SAMPLING TECHNIQUES:

For carrying out the research work “Simple random sampling techniques” have to be

followed .This can be done by the way of interviewing the personnel and the

management of the respective organizations by administering questionnaires to

them.

For this two separate questionnaires have to be prepared. The objective of the

present study can be accomplished by interviewing the personnel and the

management in the different strategies adopted by THE SURAT DISTRICT CO-

OPERATIVE Bank.

The systematic design, collection, analysis and reporting of data and findings are

relevant for the situation facing by the customer services. Collected data from

customer satisfaction levels in THE SURAT DISTRICT CO-OPERATIVE Bank.

The above sampling techniques mentioned, comparative analysis and report,

findings and the suggestions given are relevant to the undergoing research.

• Secondary data:

o The secondary data collected from the already sanctioned loan files.

o Collection of secondary data from Management journals.

o Bank and Borrower’s Annual Report.

o Project proposal.

o Respective Banks Web Sites other sites.

o Reference from Management Books.

o Newspapers and Articles



o Already researched data (Which turned into information based on analysis)

Limitation:-

1. The study is limited to the period limited.

2. Since banks have some confidential reports which cannot be handover to the outsiders, so

in-depth research and analysis is not possible.

3. There is lots of no. of SSIs which is unregistered; due to this proper data’s are not

covered.

4. The financials of the firms, were not available, as most of the firms are worried about

disclosing their financials, thus for the industry analysis and other qualitative research,

we had to rely on the secondary data sources.

5. Bank Employees are very busy and unable to share their opinions on credit services of

SSIs

6. There were lots of difficulties in getting the data from the small and medium scale

7. Though there has been chance for basis, the investigator has taken all steps for the

reduction of bias.

8. Study is with respect to local market SURAT City.



Documents

Cp Projact Final