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CHAPTER THREE. FINANCIAL STRUCTURE AND LENDING
POLICIES OF THE
STATE BANK OF INDIA.
98
CHEPTER THREE
FINANCIAL STRUCTURE AND LENDING POLICIES OF THE
STATE BANK OF INDIA.
CONTENTS PAGE NO.
1. Financial structure of State Bank of India 111
2. Capital structure - State Bank of India 118
3. SBI bank's performance 138
4. Lending policies of State Bank of India 148
5. References 171
99
CHEPTER THREE
FINANCIAL STRUCTURE AND LENDING POLICIES OF THE
STATE BANK OF INDIA.
3.1 FINANCIAL STRUCTURE OF STATE BANK OF INDIA
INTRODUCTION
In this chapter the financial structure of the State Bank Of India and its lending
policies are highlighted. Financial Structure and the Lending Policies of State Bank
Of India reflect how the Institution operate the incoming and outgoing finances and
its capitalization. State Bank of India has the largest banking branch network in India
with over 14 local offices. In march 2010, Its assets of Rs.10,53,414 crores and
12,496 branches of which 142 are foreign offices across 37 countries across the
globe. If the branches of SBI‟ associate bank are included the total reaches up to
21,500 branches. SBI accounts over one-fifth of the countries loan. SBI is also listed
in the B.S.E. and N.S.E. The Bank is engaged in Banking and Financial services.
The Bank‟s activities are covered under “Group K: Financial and Insurance Activities
of National Industrial Classification (All Economic Activities) - 2008” published by
Ministry of Statistics and Programmer Implementation. The Bank‟s activities fall
under the below mentioned industrial activity code.1
State Bank Of India is providing financial services like insurance, mutual fund,
financial leasing, card business etc. Which are offered through the State Bank‟s
associates and/or subsidiaries to all customer segments whether Government,
Corporate or Individuals. The Bank‟s three major products/services categories, each
of which individually comprises of several products/services are,
1. Deposits
2. Loans and Advances
3. Remittances and Collections
100
The Bank has 14 Circles and 85 Zonal Offices which are located at important cities
throughout the country. International banking services of State Bank of India are
delivered for the benefit of its Indian customers, non-resident Indians, foreign entities
and banks. The Bank has an International Banking Network in 34 countries with 186
offices, spread over all time zones. Some of the Bank‟s International locations
include UK, USA, Germany, France, Canada, Russia, South Africa, China,
Singapore, Japan and Australia. The network is augmented by a cluster of Overseas
and NRI branches within India and correspondent links with over 429 banks, the
world over. Bank‟s Joint Ventures and Subsidiaries abroad further underline the
Bank‟s international presence.
State Bank of India is a regional banking behemoth and is one amongst the world‟s
largest financial institutions. SBI‟s market share among the commercial banking
terms of deposit and loan is 20%. State bank of India is also ranked 29th most
reputed company according to Forbes magazine. According to the annual survey
conducted by the BRAND FINANCE and THE ECONOMIC TIMES in 2010 State
Bank of India is the only bank featured in the coveted “top 10 brands” of India.
State bank of India being a government-controlled bank has a scope of strong
economic growth. State bank of India has improved with a drastic speed in terms of
economic growth in the last few years. Thus, economic growth is State bank of
India‟s one of the banks largest opportunities. State bank of India has a huge interest
in the corporate responsibility activities. It has done many campaigns to help the
poor in the rural areas of India. State bank of India has decided to donate 1% of its
annual profit for the welfare facilities to be used by the needful people in the interior
and poor parts of India. State bank of India has also organized camps in which the
tribal people were trained to take care of their health and how to avoid diseases.
State bank of India also trained parents on childcare personnel which can help
decrease the death poll of small children in the country. The State bank of India also
organized camps on public awareness to prevent child abuse, which are a good
cause and a good social corporate responsibility. According to a source State bank
of India has spent 1% of State Bank Of India's Annual Profit on Corporate Social
Responsibility activities that will include donations to school in the rural areas. State
101
bank of India has never stepped back as far as Corporate Social Responsibility
activities are concerned. It has always tried its level best to complete its
responsibility in a good manner.2
In 2010, the world economy had been through a severe recession, the worst in the
last 70 years, marked by financial turmoil, large-scale destruction of wealth, and
declines in global output and trade. The global crisis, which began in the financial
sector in the developed countries exposed a number of unresolved fragilities within
the increasingly integrated financial system and affected the real economy of India.
In sharp contrast, the Indian economy was trending up with strong Gross Domestic
Product growth expected at 7.2% in Financial Year 2010, rising to over 8% in
Financial Year 2011 and moving on to 9-10% in the medium term. The resurgence of
manufacturing sector is driven by continuing growth in capital goods and consumer
goods, as well as capacity additions across industry.
At the same time, inflation had been rising. This complex global and domestic
economic backdrop has posed its own set of challenges for policymakers in India
and maintaining interest rates that were not out of sync with global rates, while
supporting the growth momentum and also keeping a check on inflation remained a
great challenge for the economy. Against this background, in the year 2010, the
State Bank Of India Group has performed well. Associate Banks of State Bank Of
India Net Profit was increased by 17.74% from Rs.2,774 crores In Financial Year
2009 to Rs.3,266 crores in Financial Year 2010. Operating profit of all Associate
Banks was increased by 20.08% from Rs.5,495 crores to Rs.6,598 crores. SBI
Group Net Profit for Financial Year 2010 at Rs.11,734 crores was up by 7.11% from
Rs.10,955 crores in Financial Year 2009. Within a short span, SBI Life has recorded
a profit of Rs.276 crores in Financial Year 2010 as against a loss of Rs.26 crores in
Financial Year 2009. Asset Under Management of the company as on March 31,
2010 stood at Rs.28,703 crores, a Year on Year growth of 94%. Market share of SBI
Life amongst private insurers increased to 18.34% from 16.00% in March 2009. SBI
Capital Markets Limited has posted a Profit After Tax of Rs.150 crores during
Financial Year 2010 as against Rs.75 crores in Fiancial Year 2009 (excluding
102
extraordinary income of Rs.74.98 crores), a Year on Year growth of 100%, driven by
an increase of 73% in fee income. SBI Capital Markets had crossed the milestone of
Rs.1,00,000 crores in syndication. Another subsidiary, SBI DFHI Ltd., has recorded a
net profit of Rs.89 crores during Financial Year 2010 which was the highest in the
last six years. SBI Cards had emerged as the most trusted brand by being the
undisputed Gold Award winner in the Reader's Digest Trusted Brands Survey 2009
in the Credit Card category. Net loss before tax during Financial Year 2010 was
down by 17% to Rs.154 crores against a loss of Rs.185 crores during Financial Year
2009.
In competitive and challenging scenario, despite shedding high cost bulk deposits of
Rs.77,679 crores (-50.15%), State Bank's deposits went up by Rs.62,043 crores in
Financial Year 2010, driven by Current Accounts and Saving Accounts growth of
26.76% and retail term deposits growth of 17.64%, resulting in a Year on Year
growth of 8.36% in deposits from Rs.7,42,073 crores in March 2009 to Rs.8,04,116
crores in March 2010. Savings Bank deposits grew at an average of Rs.4,897 crores
per month during Financial Year 2010, total Current Account and Saving Account
growth during the year being Rs.73,168 crores. While market share in deposits in
March 2010 at 16.31% (17.70% in March 2009), declined by 139 bps Year on Year,
market share in low cost demand deposits at 17.51%. (17.43% in March 2009) was up
by 8 bps. Gross Advances of State Bank of India rose by Rs.92,940 crores, a growth
of 16.94% from Rs.5,48,540 crores in March 2009 to Rs.6,41,480 crores in March
2010. Market share in advances in March 2010 at 16.28% (15.99% in March 2009)
was registered an increase of 29 bps Year on Year. State Bank Of India registered
an impressive rise in Credit Deposit Ratio to 73.56% as at the end of March 2010 from
66.63% at the end of March 2009, an increase of 693 bps, bucking the industry trend
as the credit deposit ratio for All Schedule Commercial Banks has come down from
72.32% in March 2009 to 72.22% in March 2010. State Bank Of India's prudent
lending policies had ensured balanced growth, with credit flowing across a wide
range of sectors in the economy. [Large and Mid Corporate advances had grown
from Rs.1,93,351 crores in March 2009 to Rs.2,21,892 crores in March 2010, registering
a growth of 14.76%.]3
103
FINANCIAL DETAILS OF THE STATE BANK OF INDIA
In financial details, we have included Capital Structure of State Bank Of India and
other details of financial structure.
CAPITAL STRUCTURE:-
In capital structure of State Bank Of India we incorporate Authorized Capital, Issued
Capital and Paid up Capital. State Bank of India's conscious efforts to improve asset
quality had borne fruit. The economic slowdown led to a rise in Gross Non
Performing Assets from 2.86% in March 2009 to 3.11% in December 2009, but the
same had been contained and declined to 3.05% by March 2010. During this period,
Net Non Performing Assets rose from 1.79% to 1.88% but declined to 1.72%. State
Bank's capital adequacy was well above the 9% norm stipulated by Reserve Bank Of
India. As per Basel II the Capital to Risk Asset Ratio of State Bank of India stood at
13.39% as at the end of March 2010, compared to 14.25% Year 2009. As per Basel I
the Capital to Risk Asset Ratio was 12.00% and Tier I was 8.46% as on March 2010.
Five key costs, as the Bank invested heavily in laying the foundation for future
growth: (i) sharp increased in number of employees in various categories, the full
impact of which on staff expenses was felt during Financial Year 2010; (ii) Rs.627
crores arrears for wage revision pertaining to previous years provided during
Financial Year 2010; (iii) Additional contribution for pension at Rs.1998 crores
against Rs.1,469 crores last year; (iv) Additional expenses of Rs.59 crores on
Financial Inclusion; and (v) An expenditure of Rs.347 crores incurred on opening of
1,049 new branches and installing 7,788 new Automatic Teller Machines during the
year 2010. Bulk of these got back ended to the last quarter of the year 2010.
State Bank of India was remained committed to the customer and had taken several
new initiatives to expand the bouquet of choices for its customers. In Financial Year
2010, State Bank Of India had been seeking out new growth opportunities and had
successfully forayed into related areas. State Bank Of India had tirelessly
persevered in this direction and several new initiatives were launched during
Financial Year 2009-10. Mobile Banking Services launched on 31.03.2009, had been
extended to all branches during Financial Year 2010. There were more than
2,18,000 registered users on date. Financial Planning & Wealth Management
application had gone live and Financial Planning & Advisory Services had been
104
rolled out in 924 branches across the Bank. Merchant Acquiring business had
commenced on select basis and around 200 Point of Sales terminals had been
deployed. State Bank Of India is expected to deploy 1.50 lac Point of Sales terminals
and enrol over 100 merchants for online purchases during the Financial Year 2010.
State Bank Of India had been selected a consortium of Visa International and Elavon
for a joint venture, which aimed to set up 6 lacs Point of Sales terminals. SBI-SG
Global Securities Services Pvt Ltd. had commenced operations in March 2010,
which provides Custodial Services comprising Settlement, Depository Services,
Safekeeping, Corporate Action, Fund Accounting etc. State Bank Of India had
established SBI General Insurance Co. And limited commercial operations had been
launched in March 2010. By August 2010, the Company would be ready for pan
India operations with Information Technology backed support.
As the Country's Premier Financial Conglomerate providing financial resources and
services to clients pan India, State Bank Of India had a role to play in addressing the
issue of global warming. State Bank Of India's Green Banking policy aimed to reduce
the Bank's own carbon footprint and to sensitize its clients to adopt low carbon
emission practices. First of its kind in the entire Banking, Finance and Insurance
Sector (BFIS), State Bank Of India had conceptualized generation of energy through
renewable energy resources and therefore, resolved to install windmills for the
Bank's captive use with a view to substitute polluting power with green power
besides initiating several measures like switching over to energy efficient lighting
systems, installation of energy savers, efficient water management systems, waste
disposal, tree plantation, etc. Out of 1,049 branches opened during the financial year
2009-10, 354 branches were opened in metro and urban areas with a view to
increase our reach and be more accessible to customers. As at the end of March
2010, the Bank had 12,496 branches and 21,485 Group ATMs. As part of our
Endeavour to provide increased access to banking facilities across the country, State
Bank Of India simultaneously opened 154 branches and 1,540 new ATMs on 12th
July 2009, the largest by any Bank, anywhere in the world.
105
3.2 CAPITAL STRUCTURE - STATE BANK OF INDIA
Period Instrument Authorized
Capital
Issued
Capital
- P A I D U P -
From To (Rs. cr) (Rs. cr) Shares
(nos)
Face
Value
Capital
(Rs. Cr)
2009 2010 Equity Share 1000.0 635.0 634882644 10.0 634.9
2008 2009 Equity Share 1000.0 635.0 634880222 10.0 634.9
2007 2008 Equity Share 1000.0 631.6 631470376 10.0 631.5
2006 2007 Equity Share 1000.0 526.3 526298878 10.0 526.3
2005 2006 Equity Share 1000.0 526.3 526298878 10.0 526.3
2004 2005 Equity Share 1000.0 526.3 526298878 10.0 526.3
2003 2004 Equity Share 1000.0 526.3 526298878 10.0 526.3
2002 2003 Equity Share 1000.0 526.3 526298878 10.0 526.3
2001 2002 Equity Share 1000.0 526.3 526298878 10.0 526.3
2000 2001 Equity Share 1000.0 526.3 526298878 10.0 526.3
1999 2000 Equity Share 1000.0 526.3 526298878 10.0 526.3
1996 2000 Equity Share 1000.0 526.3 526298878 10.0 526.3
1995 1996 Equity Share 1000.0 474.0 474009872 10.0 474.0
1994 1995 Equity Share 1000.0 474.0 474009189 10.0 474.0
1993 1994 Equity Share 1000.0 473.8 473828726 10.0 473.8
1991 1993 Equity Share 1000.0 200.0 20000000 100.0 200.0
The liquidity constraint that emerged following the global financial crisis led Reserve
Bank Of India to follow an accommodative monetary policy stance which was
continued during the major part of 2009-10. As the global financial and economic
conditions deteriorated, a series of measures were taken after September 2008 to
enhance liquidity in the system and support growth in the economy. There was
further easing of policy rates in 2009-10 as the Reverse Repo rate and Repo rate
were slashed by 25 bps each to 3.25% and 4.75% respectively in April 2009.
Keeping in view the comfortable liquidity position, the Statutory Liquid Ratio was
restored to its earlier level of 25% of Net Demand and Time Liability from November
2009. Due to the accommodative policy followed by Reserve Bank Of India during
major part of 2009-10, interest rates on both deposits and credit softened. While
Prime Lending Rates of major banks fell by 50 bps from 11.50-12.50% at end-March
2009 to 11.0-12.0% at end March 2010, deposits rates declined from 7.75-8.75% to
6.0-7.50% in the same period. Even as there were signs of a recovery in January
106
2010, amidst concerns about rising inflation, Reserve Bank Of India announced a
hike in Cash Reserve Ratio by 75 bps to 5.75% in two tranches to keep a check on
liquidity and control inflation. On 19 March 2010, to curb inflationary expectations,
Reserve Bank Of India hiked Repo and Reverse Repo rates by 25 bps each to 5%
and 3.50% respectively. Conditions in the global economy improved in the third and
fourth quarters of 2009, which prompted the International Monetary Fund to reduce
the projected rate of economic contraction in 2009 from 1.1% to 0.8%. International
Monetary Fund has also revised the projection of global growth for 2010 to 4.2%, up
from 3.9%. In 2009-10, while advanced economies were focused on stabilizing their
economies in the aftermath of the global financial turmoil, Emerging Market
Economies (EMEs) including India, were engaged in mitigating the adverse impact of
the global financial crisis on their economies. In India, with the economy firmly on the
recovery path towards the second half of the year, the policy emphasis shifted from
managing the crisis to managing the recovery. During 2010-11, the efforts in
advanced economies will be to further improve the financial conditions and
strengthen the growth impulses, while the Endeavour in Emerging Market
Economies (EMEs) including India will be to strengthen the recovery process without
compromising on price stability.
The Bank‟s Corporate Social Responsibility (CSR) activities touch the lives of
millions of the poor and needy across the length and breadth of the country.
Corporate Social Responsibility (CSR) is embedded in many of the Bank‟s business
initiatives and has been a part of State Bank of India since 1973, under the name of
Community Services Banking and covers various social, environmental and welfare
activities. The Bank has a comprehensive Corporate Social Responsibility (CSR)
Policy, approved by the Executive Committee of the Central Board in August 2011.
The focus areas of the Bank‟s Corporate Social Responsibility (CSR) activities are
listed here as under: 4
• Supporting education.
• Supporting healthcare.
• Assistance to poor & underprivileged.
• Environment protection.
• Entrepreneur development programme.
• Help in National calamities.
107
Further details of the Bank‟s Corporate Social Responsibility (CSR) activities have
been covered in the “Corporate Social Responsibility” section of the Annual Report
for financial year 2009-10.
This economic effect seems to be a sizable for plausible values of the elasticity of
gross domestic product to money supply. For example, if the overall coefficient of .03
were accurate for a bank such as the State Bank of India, which provides
approximately a quarter of the credit in the economy, decisions on whether to pursue
vigilance cases could have measurable macroeconomic effects. Conclusion: There
seems to be some evidence that the fear of being investigated is reducing lending by
a significant extent: banks where someone is being investigated slow down lending
relative to their own mean level of lending. This leaves open the question of whether
this is a desirable reaction, since it is possible that the loans that are cut are the
loans that are unlikely to be repaid. But it does raise the possibility that honest
lenders are being discouraged by excessively stringent regulations. Lending to the
government and the easy life. The ideal way to look at the easy life hypothesis would
be to estimate the elasticity of bank lending to the private sector with respect to the
interest rate on government securities or the spread between the interest rate on
private loans and the interest rate on government securities.
OTHER DETAILS OF FINANCIAL STRUCTURE
In other details of Financial Structure we have covered Capital, Reserves and
Surplus, Deposits and Borrowings, other liabilities and provisions of State Bank Of
India, Cash and Balances with Reserve Bank Of India. Participation of subsidiaries
and business partners in Branch initiatives State Bank of India has 5 Domestic and 6
Foreign Banking Subsidiaries. The details of the subsidiaries and joint ventures have
been provided in the Bank‟s Annual Report for Financial Year 2009--10. The Bank‟s
Associates and Subsidiaries decide independently regarding their social and
environmental initiatives. Banking operations do not have a complex supply chain
and thus the business partners (suppliers/distributors) are also quite limited, which
leaves very little scope for the Bank to engage them in its Branch initiatives. The
Bank expects and encourages its suppliers/distributors to conduct their business in a
responsible manner. Banks play a major role in the economic and social
development of the country and most of the credit- related schemes of the
108
government to uplift the poorer and the under-privileged sections have been
implemented through the banking sector. State Bank of India, being the largest bank
in India, is at the forefront of contributing to the sustainable development of the
country through its innovative products and services. The Bank offers a wide array of
financial products and services, each of which has a direct or indirect positive impact
on the society and/or environment. Few of the Bank‟s recent products/services with
inherent environmental/ social benefits like Green Channel Counter, Green Remit
Card etc. The details of these products/services have been provided in the Bank‟s
Annual Report for Financial Year 2009-10. The Bank strives to utilize optimally the
resources for its operations. The major consumables for banking operations are
stationery items. Sustainable Sourcing in context of banking industry has primarily to
do with procurement from locally-based suppliers/vendors.
India as on 31st March 2010 of which 16,294 Automatic Teller Machines are of the
State Bank of India alone. Along with an increase in number of Automatic Teller
Machines, there has also been an increase in the number of debit cards issued by
the Bank, which rose by more than 40% during the year. In the area of Micro
Finance and Financial Inclusion, State Bank Of India remained the market leader
with market share of around 31% in Self Help Group Bank Credit Linkage
programme having credit linked so far 17.13 lack Self Help Groups and disbursed
loans to the extent of Rs.11,562 crores. State Bank Of India had rolled out several
unique products like Self Help Group Credit Card, Self Help Group Sahayog Niwas
and Self Health Group Gold Card, a new scheme for financing Non Government
Organisations/ Micro Finance Institutions for on-leading to Self Help Groups, a Micro
Insurance product - Grameen-Shakti had been rolled out which has covered one
million lives by March 2010. State Bank Of India had been rated as the Best Public
Sector Bank for Rural Reach by Dun and Bradstreet and had been awarded the Best
Microfinance Award for the year 2009 by the Asian Banker for financial institutions
across the Asia Pacific, Gulf and Central Asia regions. Coverage of unbanked
villages increased from 53,000 in March 2009 to 1,03,938 by March 2010.
109
State Bank of India had gone beyond the usual domains of technology in terms of
platform, solution, operational details and service content in a very aggressive
manner to serve the excluded common citizen with minimal costs including SBI Tiny
Card. State Bank of India had rolled out Kiosk Banking, operated at internet enabled
PC (Kiosk) with bio-metric validation, in 7 Circles across 7 States and 49 districts.
Major Service Centre Agencies (SCAs) like SREI Sahaj, 3-i InfoTech have been
engaged as Business Correspondents besides appointing about 26,800 Customer
Service Point (CSP)/ outlets of Business Correspondents / Business Facilitators
(BC/BFs). Some of the national level BC/BFs is India Post, ITC, National Bulk
Handling Corporation and Reliance Dairy. To increase its outreach, the Bank has
opened about 695 new branches in rural and semi urban areas during 2009-10. To
improve the processing capacity, 314 Rural Central Processing Centres (RCPCs)
have been set up.
In the area of Information technology, State Bank Of India successfully completed
Core Banking Solution implementation which is among the world's largest. State
Bank Of India had implemented a secure, robust and scalable Wireless Area
Network architecture connecting 18,189 Branches/Offices and 21,485 Automatic
Teller Machines of State Bank Group through leased lines and Very Small Aperture
Terminals supporting all critical business applications. This had facilitated successful
launch of many important functionalities, such as, Defence Salary Package,
Application Supported by Blocked Amount, Universal Passbook etc. to meet specific
requirements of Government, Corporate and individual customers. Keeping in view
the requirement of senior citizens, a Pension Management System had been
introduced at Contact Centre enabling the pensioners to make enquiry on their
pension details through Contact Centre. A host of Mobile Banking services, such as
funds transfers, enquiries, cheque book requests, bill payments, Mobile Top-up,
recharging of Dish Television Services, Demat account enquiry are currently being
offered under mobile banking. 5
110
(000s omitted)
CAPITAL As on 31.03.2010(Current Year)Rs.
Authorised Capital :
100,00,00,000 (Previous Year 100,00,00,000) shares of Rs
10 each
1000,00,00
Issued Capital :
63,49,68,500 (Previous Year 63,49,68,500) Equity Shares of
10 each
634,96,85
Subscribed and Paid-up Capital :
63,48,82,644 (Previous Year 63,48,80,222) Equity Shares of
10 each [The above includes 2,24,86,090 (2,71,28,722 as on
31.3.09)) Equity Shares represented by 1,12,43,045 (Previous
Year 1,35,64,361) Global Depository Receipts]
634,88,26
TOTAL 634,88,26
(000s omitted)
RESERVES & SURPLUS As on 31.03.2010 (Current Year) Rs.
I. Statutory Reserves
Opening Balance
Additions during the year
Deductions during the year
30726,68,86
6381,08,85
37107,77,71
II. Capital Reserves
Opening Balance
Additions during the year
Deductions during the year
1267,30,69
114,05,47
1381,36,16
III. Share Premium
Opening Balance
Additions during the year
Deductions during the year
20657,92,52
38,26
--------
20658,30,78
IV. Foreign Currency Translation
Reserve
Opening Balance
Additions during the year
Deductions during the year
1574,84,29
-
929,88,66
644,95,63
V. Revenue and Other Reserves*
Opening Balance
Additions during the year
Deductions during the year
3085,71,33
2435,86,06
5521,57,39
111
VI. Balance of Profit and Loss Account
*Note: Revenue and Other Reserves
include (i) 5,00,00 thousand (Previous
Year 5,00,00 thousand) of Integration
and Development Fund (maintained
under Section 36 of the State Bank of
India Act, 1955) (ii) Special Reserve
under Section 36(1)(viii) of the Income
Tax Act, 1961 4487,00,00 thousand
(Previous Year 3737,00,00 thousand)
33,93
TOTAL 60314,31,60
(000s omitted) DEPOSITS As on 31.03.2010 (Current Year) Rs.
A. I. Demand Deposits
(i) From Banks
(ii) From Others
8904,46,95
113674,96,27
II. Savings Bank Deposits 257460,29,77
III. Term Deposits
(i) From Banks
(ii) From Others
14337,83,10
409738,66,59
TOTAL 804116,22,68
B. I. Deposits of Branches in India 764717,48,45
II. Deposits of Branches outside India 39398,74,23
TOTAL 804116,22,68
(000s omitted)
BORROWINGS As on 31.03.2010 (Current Year) Rs.
I. Borrowings in India
(i) Reserve Bank of India
(ii) Other Banks
(iii) Other Institutions and Agencies
(iv) Subordinated Debts and Bonds
---------------
8178,33,58
1292,29,56
29174,40,00
TOTAL 38645,03,14
II. Borrowings outside India
i) Borrowings and Refinance outside India
(ii) Subordinated Debts and Bonds
61560,61,11
2805,95,86
TOTAL 64366,56,97
GRAND TOTAL 103011,60,11
Secured Borrowings included in I & II above 8333,66,30
112
(000s omitted)
OTHER LIABILITIES AND PROVISIONS6 As on 31.03.2010 (Current Year) Rs.
I. Bills payable 21098,25,83
II. Inter-office adjustments (Net) 11474,83,02
III. Interest accrued 6605,19,35
IV. Deferred Tax Liabilities (Net) -----
V. Others (including provisions) 41158,42,20
TOTAL 80336,70,40
(000s omitted)
CASH AND BALANCES WITH RESERVE BANK OF INDIA As on 31.03.2010 (Current Year) Rs.
I. Cash in hand (including foreign currency notes and gold) 6841,01,27
II. Balance with Reserve Bank of India
(i) In Current Account
(ii) In Other Accounts
54447,33,22
2,52,03
TOTAL 61290,86,52
(000s omitted)
BALANCES WITH BANKS AND MONEY AT CALL & SHORT NOTICE As on 31.03.2010 (Current Year) Rs.
I. In India
(i) Balances with banks
(a) In Current Accounts
(b) In Other Deposit Accounts
975,94,08
11175,12,81
(ii) Money at call and short notice
(a) With banks
(b) With other institutions
--
--
TOTAL 12151,06,89
II. Outside India
(i) In Current Accounts
(ii) In Other Deposit Accounts
(iii) Money at call and short notice
16209,21,17
653,10,51
5879,59,07
TOTAL 22741,90,75
GRAND TOTAL( I and II) 34892,97,64
113
(000s omitted) INVESTMENTS
7 As on 31.03.2010 (Current Year) Rs.
I. Investments in India in :
(i) Government Securities
(ii) Other approved securities
(iii) Shares
(iv Debentures and Bonds
(v)Subsidiaries and/ or Joint Ventures/ Associates
(vi)Others (Units of Mutual Funds, Commercial Papers etc.)
226706,01,63
1035,12,55
7199,37,26
16127,43,16
4285,60,64
22214,90,87
TOTAL 277568,46,11
II. Investments outside India in :
(i) Government Securities (including local authorities)
(ii) Subsidiaries and/ or Joint Ventures abroad
(iii) Other Investments (Shares, Debentures etc.)
2009,51,52
1403,69,14
4808,40,29
TOTAL 8221,60,95
GRAND TOTAL (I and II) 285790,07,06
III. Investments in India :
(i) Gross Value of Investments
(ii) Less: Aggregate of Provisions / Depreciation
278081,59,99
513,13,88
TOTAL 277568,46,11
IV. Investments outside India :
(i) Gross Value of Investments
(ii) Less: Aggregate of Provisions / Depreciation
8409,18,88
187,57,93
TOTAL 8221,60,95
GRAND TOTAL (III and IV) 285790,07,06
(000s omitted) ADVANCES As on 31.03.2010 (Current Year) Rs.
A. I. Bills purchased and discounted 77138,60,77
II. Cash credits, overdrafts and loans repayable on demand
III. Term loans
42774,73,18
275150,49,64
313988,92,38
TOTAL 631914,15,20
B. I. Secured by tangible assets (includes advances
against Book Debts)
II. Covered by Bank/ Government Guarantees
III. Unsecured
410659,89,28
85368,66,82
135885,59,10
TOTAL 631914,15,20
114
C. I. Advances in India
(i) Priority Sector
(ii) Public Sector
(iii) Banks
(iv) Others
170568,20,80
48955,92,33
265,69,38
315964,13,69
TOTAL 535753,96,20
II. Advances outside India
(i) Due from banks
(ii) Due from others
(a) Bills purchased and discounted
(b) Syndicated loans
(c) Others
15657,17,29-
------
25294,02,88
26475,21,13
28733,77,70
TOTAL 96160,19,00
GRAND TOTAL (C-I & C-II) 631914,15,20
(000s omitted) FIXED ASSETS As on 31.03.2010 (Current Year) Rs.
I. Premises
At cost as on 31st March of the preceding year
Additions during the year
Deductions during the year
Depreciation to date
1591,04,02
107,49,29
7,21,38
702,00,77
989,31,16
II. Other Fixed Assets (including furniture and fixtures)
At cost as on 31st March of the preceding year
Additions during the year
Deductions during the year
Depreciation to date
7886,53,52
1430,82,77
29,90,72
6159,24,73
3128,20,84
III. Leased Assets
At cost as on 31st March of the preceding year
Additions during the year
Deductions during the year
Depreciation to date including provision
Add: Lease adjustment account
925,48,26-
-------
72,63,11
852,85,15
20,27
IV. Assets under Construction (Including Premises) 295,18,40
TOTAL (I, II, III and IV) 4412,90,67
115
(000s omitted) OTHER ASSETS
8 As on 31.03.2010 (Current Year) Rs.
I. Inter-office adjustments (Net) -
II. Interest accrued 7685,00,86
III. Tax paid in advance / tax deducted at source 4391,07,67
IV. Deferred Tax Assets (Net) 2512,08,92
V. Stationery and stamps 102,45,17
VI. Non-banking assets acquired in satisfaction of claims 34,91
VII. Others 20421,78,43
TOTAL 35112,75,96
(000s omitted)
CONTINGENT LIABILITIES As on 31.03.2010 (Current Year) Rs.
I. Claims against the bank not acknowledged as
debts
655,45,08
II. Liability for partly paid investments 2,80,00
III. Liability on account of outstanding forward
exchange contracts
245031,45,01
IV. Guarantees given on behalf of constituents
(a) In India
(b) Outside India
64479,72,56
36521,88,50
V. Acceptances, endorsements and other
obligations
118526,71,14
VI. Other items for which the bank is contingently
liable
83228,86,24
TOTAL 548446,88,53
116
(000s omitted) STATE BANK OF INDIA PROFIT
AND LOSS ACCOUNT FOR THE
YEAR ENDED 31ST MARCH 2010
Schedule No. Year ended 31.03.2010(Current Year) Rs.
I. INCOME
Interest earned
Other Income
13
14
70993,91,75
14968,15,27
TOTAL 85962,07,02
II. EXPENDITURE
Interest expended
Operating expenses
Provisions and contingencies
15
16
47322,47,80
20318,68,00
9154,85,92
TOTAL 76796,01,72
III. PROFIT
Net Profit for the year
Profit brought forward
Profit balance of e-SBI
Commercial & International Bank
Ltd. transferred on amalgamation
9166,05,30
33,93
-
TOTAL 9166,39,23
APPROPRIATIONS
Transfer to Statutory Reserve
Transfer to Capital Reserve
Transfer to Revenue and other
Reserves
Dividend
i) Interim Dividend
ii) Final Dividend Proposed
Tax on dividend
Loss from State Bank Of
Saurashtra
Balance carried over to Balance
Sheet
6381,08,85
114,05,47
529,50,65
634,88,02
1269,76,77
236,75,54
-------
33,93
TOTAL 9166,39,23
Basic Earnings per Share 144.37
Diluted Earnings per Share 144.37
Principal Accounting Policies 17
Notes to Accounts 18
117
(000s omitted) INTEREST EARNED Year ended 31.03.2010 (Current Year) Rs.
I. Interest / discount on advances / bills 50632,63,88
II. Income on investments 17736,29,62
III. Interest on balances with Reserve Bank of India 1511,92,18
IV. Others 1113,06,07
TOTAL 70993,91,75
(000s omitted) OTHER INCOME Year ended 31.03.2010(Current Year)Rs.
I. Commission, exchange and brokerage 9640,85,95
II. Profit / (Loss) on sale of investments (Net) 2116,79,23
III. Profit/ (Loss) on revaluation of investments (Net) ------
IV. Profit / (Loss) on sale of land, buildings and other
assets (Net)
(10,45,62)
V. Profit / (Loss) on exchange transactions 1587,13,55
VI. Income earned by way of dividends, etc., from
subsidiaries/ companies and/ or joint ventures abroad/ in
India
573,48,34
VII. Income from financial lease 9,18,55
VIII Miscellaneous Income 1051,15,27
TOTAL 14968,15,27
(000s omitted) INTEREST EXPENDED
9 Year ended 31.03.2010 (Current Year) Rs.
I. Interest on deposits 43334,28,52
II. Interest on Reserve Bank of India / Inter-bank
borrowings
1228,04,84
III. Others 2760,14,44
TOTAL 47322,47,80
118
( 000s omitted) OPERATING EXPENSES Year ended 31.03.2010 (Current Year) Rs.
I. Payments to and provisions for employees 12754,64,57
II. Rent, taxes and lighting 1589,57,49
III. Printing and stationery 242,32,41
IV. Advertisement and publicity 224,04,52
V. (a) Depreciation on Bank‟s Property (other than
Leased Assets)
(b) Depreciation on Leased Assets
929,15,51
3,50,86
VI. Directors‟ fees, allowances and expenses 61,13P
VII. Auditors‟ fees and expenses (including branch
auditors‟ fees and expenses ) 111,59,77
VIII. Law charges 96,61,93
IX. Postages, Telegrams, Telephones, etc. 321,58,10
X. Repairs and maintenance 327,90,67
XI. Insurance 683,83,37
XII. Other expenditure 3033,27,67
TOTAL 20318,68,00
COST CONDITIONS
The main cost conditions of Financial Structure include Prime Lending Rate. The
movement of banks‟ Prime Lending Rate (PLR) over the years reflects the general
cost condition for borrowers. The prime lending rate of State Bank of India (SBI) has
declined by about 750 basis points from the peak of 19 per cent in 1991-92 to 11.50
per cent during 2002-03 (Table 10). For other commercial banks too, there has been
decline in Prime Lending Rate (PLR). From the level of 1995-96, SBI‟s Prime
Lending Rate (PLR) has declined by about 300-450 basis points and similarly for
other banks, the Prime Lending Rate (PLR) has declined somewhat more by about
475 basis points. Another striking feature of distribution of loans across various
ranges of interest rates is that the decline in the estimated weighted average lending
rate is less than the Prime Lending Rate (PLR). For instance, during the period
1995-96 to 2001-02, the Prime Lending Rate (PLR) of banks has declined by 450-
500 basis points, while weighted ending rate has declined by about 300 basis
points.10
119
Table 3.2.1: Prime Lending Rate (Per cent)
Year PLR of SBI PLR of Other BanksX Weighted Lending Rate@
1991-92 19.00 16.50 16.5
1992-93 17.00 19.00 16.8
1993-94 14.00 19.00 16.5
1994-95 15.00 15.00 16.1
1995-96 16.50 16.50 17.1
1996-97 14.50-15.00 14.40 16.9
1997-98 14.00 14.00 16.3
1998-99 12.00-13.00 12.00-14.00 15.5
1999-00 12.00-12.50 12.00 15.00
2000-01 11.00-12.00 11.50 14.3
2001-02 11.00-12.00 11.50 13.9
2002-03 10.75-11.50 10.75
Source: Handbook of Statistics on the Indian Economy, 2002-03, RBI.11
The prime-lending rate, however, is not a fully representative cost of lending for the
borrowers as banks lend to different borrowers at different lending rates. Moreover,
banks have freedom to lend below PLR to some borrowers. Data on distribution of
credit across various ranges of interest rate shows that loans provided at PLR could
be about 20-30 per cent of total loans (Table 11). As the PLR may not be a
representative cost of lending, a measure of underlying cost including actual interest
costs of deposits and operating expenses, which are available from balance sheets
of various banks, provide useful insights into the cost structure of public sector
banks. In terms of interest cost of deposits, there is evidence that, on an average,
effective cost of deposits for public sector banks as a whole 3, has remained almost
steady during 1991-92 to 2000-01 (Table 10). Since 2001-02, however, the interest
cost of deposits has declined by about 80 basis points.
PRODUCE MARKETING LOAN was launched exclusively for farmers at
concessionary interest rate of 8% (Rs.1,269 crores disbursed during the Financial
Year 2010). Special focus was given to cover beneficiaries of Agricultural Debt
Waiver & Debt Relief Scheme who became eligible for new loans (24 lacs farmers
covered so far out of 41 lacs beneficiaries under the Scheme).
120
Table: 3.2.2. Distribution of Outstanding Credit across Interest Rate Range
(Per cent) YEAR PLR(SBI) PLR(OTHERS)
1995 15.0 15.0
1996 16.5 16.5
1997 14.5-15.0 14.5
1998 14.0 14.0
1999 12.0-13.0 12.0-14.0
2000 12.0-12.5 12.0
2001 11.0-12.0 11.5
2002 11.0-12.0 11.5
TAKE-OUT FINANCING/LIQUIDITY SUPPORT
Other details of Financial Structure of State Bank of India also incorporate Take-
Out Financing and Liquidity support.
(i) Take-out financing arrangement: Take-out financing structure is essentially a
mechanism designed to enable banks to avoid asset-liability maturity mismatches
that may arise out of extending long tenor loans to infrastructure projects. Under the
arrangements, banks financing the infrastructure projects will have an arrangement
with Infrastructure Development Finance Corporation [IDFC] or any other financial
institution for transferring to the latter the outstanding in their books on a pre-
determined basis. Infrastructure Development Finance Corporation [IDFC] and State
Bank of India have devised different take-out financing structures to suit the
requirements of various banks, addressing issues such as liquidity, asset-liability
mismatches, limited availability of project appraisal skills, etc. They have also
developed a Model Agreement that can be considered for use as a document for
specific projects in conjunction with other project loan documents. The agreement
between SBI and Infrastructure Development Finance Corporation [IDFC] could
provide a reference point for other banks to enter into somewhat similar
arrangements with Infrastructure Development Finance Corporation [IDFC] or other
financial institutions.
121
(ii) Liquidity support from Infrastructure Development Finance Corporation [IDFC]:
As an alternative to take-out financing structure, Infrastructure Development Finance
Corporation [IDFC] and State Bank of India have devised a product, providing
liquidity support to banks. Under the scheme, IDFC would commit, at the point of
sanction, to refinance the entire outstanding loan (principal+ unrecovered interest) or
part of the loan, to the bank after an agreed period, say, five years. The credit risk on
the project will be taken by the bank concerned and not by IDFC. The bank would
repay the amount to IDFC with interest as per the terms agreed upon. Since IDFC
would be taking a credit risk on the bank, the interest rate to be charged by it on the
amount refinanced would depend on the IDFC‟s risk perception of the bank (in most
of the cases, it may be close to IDFC‟s Prime Lending Rate). The refinance support
from IDFC would particularly benefit the banks which have the requisite appraisal
skills and the initial liquidity to fund the project.12
State Bank of India during our study period 1990 to 2010 was involved not only with
business development but also with care for the community and supports a range of
socio-economic, educational and health initiatives. In the field of education, for better
governance and standards, State Bank of India, in partnership with the Municipal
Corporation of Greater Mumbai (MCGM), had launched a project to transform and
upgrade the outcome of education and educational infrastructure in 1300 schools run
by the Municipal Corporation. State Bank of India was agreed to support this project
as a partner for a period of 2 years, during the period of our study. As this project
may evolve as a model for replication across the country.
To bridge the widening gulf between our youth in Metro/Urban areas and Rural India,
State Bank of India had drawn up a programme named "SBI Indi corps", a volunteer
programme on the lines of the US Peace Corps, which would give fresh graduates
from colleges/institutions an opportunity to live in villages and work on development
projects with reputed NGOs.
India remains among the fastest growing countries of the world and is poised to play
a greater role in the global economy in the years to come.
122
MACRO- ECONOMIC SCENARIO
During our study period 1990 to 2010, it is also necessary to discuss about the
Macro Economic Scenario of the Indian Economy. Here main emphasis is on
Economic Back Drop and Banking Environment in India during 1990 to 2010. The
Indian Economy was on back track and poised to grow by 7.2% in 2009-10, higher
than 6.7% in the previous year 2008-09. The strong industrial recovery and
continuing momentum in services sector was the key underlying strength behind the
higher growth. On the agriculture front, decline in farm output was expected to be
contained at around -0.2%, against growth of 1.6% in 2008-09, due to good rabbi
harvest, partially offsetting the kharif losses suffered because of the worst South-
West Monsoon since 1972.
Industry showed a marked improvement and was expected to grow by 8.8% in 2009-
10 against 3.1% in 2008-09. The higher growth of 8.9% in 2009-10 in manufacturing,
against 3.2% in the previous year 2008-09, was propelled by robust performance of
capital goods, consumer durables and intermediate goods. Apart from
manufacturing, mining and electricity also contributed to higher industrial growth.
Mining was projected to grow by 8.7% in 2009-10 against 1.6% in the previous year
2008-09, while electricity was likely to grow by 8.2% against 3.9% in the previous
year 2008-09.
Services sector accounting for about two-third of Gross Domestic Product, was
expected to grow by 8.5% in 2009-10, against 9.3% in 2008-09. The moderation in
services sector growth was largely on account of community, social and personal
services, which grew by 8.2% in 2009-10 against 13.9% in 2008-09.
Following signs of economic revival in developed countries, merchandise exports
moved into positive territory in November 2009 after declining continuously for
thirteen months. However, cumulative exports during 2009-10 remained negative
and declined by 4.7%, while imports declined by 8.2%. Revival in the domestic and
global economy was reflected in net capital inflows. In particular, net Foreign
Institutional Investors inflows were a robust US $29 billion in 2009-10 as against net
outflow of US $15 billion in 2008-09. In November 2009, Reserve Bank of India
purchased 200 metric tons of gold from the International Monetary Fund [IMF] as a
123
part of its foreign exchange reserves management operations but the forex reserves
of the country remained unchanged since the gold purchase was only a substitution
of foreign currency assets. Due to strong capital inflows, forex reserves of the
country (including gold and SDRs) increased by US $27.1 billion to US $279.1 billion
and the Rupee appreciated against the US dollar from Rs.50.95 per dollar at end-
March 2009 to Rs.45.14 per dollar at end-March 2010.
After remaining benign in the first two quarters of 2009-10, inflation emerged as a
major concern during the third and fourth quarters of 2009-10. Increase in Wholesale
price index [WPI] inflation to 9.9% Year on Year in March 2010 from 1.2% Year on
Year in March 2009 was largely driven by supply side factors particularly in the case
of food items. In the same period, food prices increased sharply by 17.70%
compared to the rise of 6.97% a year 2008-09.
3.3 SBI BANK’S PERFORMANCE
Here the performance of State Bank Of India is evaluated in terms of profit, dividend,
net interest income, non interest income and other activities of State Bank Of India,
which are elaborated here.
PROFIT
The Operating Profit of the Bank for 2009-10 stood at Rs.18,320.91 crores as
compared to Rs.17,915.23 crores in 2008-09 registering a growth of 2.26%. The
Bank has posted a Net Profit of Rs.9,166.05 crores for 2009-10 as compared to
Rs.9,121.23 crores in 2008-09 registering a moderate growth of 0.49%. While Net
Interest Income recorded a growth of 13.41% and Other Income increased by
17.95%, Operating Expenses increased by 29.84% attributable to higher staff cost
and other expenses.
DIVIDEND
The Bank has increased dividend to Rs.30.00 per share (300%) {(inclusive of interim
dividend of Rs.10.00 per share (100%) already paid)} from Rs.29.00 per share
(290%) in the last year.
124
NET INTEREST INCOME
The Net Interest Income of the Bank registered a growth of 13.41% from
Rs.20,873.14 crores in 2008-09 to Rs.23,671.44 crores in 2009-10. This was due to
growth in interest income on advances and investments. The gross interest income
from global operations rose from Rs.63,788.43 crores to Rs.70,993.92 crores during
the year. This was mainly due to higher interest income on advances. Interest
income on advances in India registered an increase from Rs.42,989.36 crores in
2008-09 to Rs.47,633.47 crores in 2009-10 despite decline in the average yield on
advances in India from 10.15% in 2008-09 to 9.66% in 2009-10. Interest income on
advances at foreign offices has decreased by 12.19%. Income from resources
deployed in Treasury operations in India increased by 17.85% mainly due to higher
average resources deployed. However, the average yield, which was 7.10% in 2008-
09, has decreased to 6.52% in 2009-10. Total interest expenses of global operations
increased from Rs.42,915.29 crores in 2008-09 to Rs.47,322.48 crores in 2009-10.
Interest expenses on deposits in India during 2009-10 recorded an increase of
15.04% compared to the previous year, whereas the average level of deposits in
India grew by 25.05% and the average cost of deposits declined from 6.30% in
2008-09 to 5.80% in 2009-10.13
NON-INTEREST INCOME
Non-interest income stood at Rs.14,968.15 crores in 2009-10 as against
Rs.12,690.79 crores in 2008-09. During the year, the Bank received an income of
Rs.573.48 crores (Rs.409.60 crores in the previous year) by way of dividends from
Associate Banks/subsidiaries and joint ventures in India and abroad.
OTHER ACTIVITIES
State Bank's other activities are about Assets and Liabilities, during the period of our
study are as follows.
125
Assets
The total assets of the Bank increased by 9.23% from Rs.9,64,432.08 crores at the
end of March 2009 to Rs.10,53,413.73 crores as at end March 2010. During the
period, the loan portfolio increased by 16.48% from Rs.5,42,503.20 crores to
Rs.6,31,914.15 crores. Investments increased by 3.56% from Rs.2,75,953.96 crores
to Rs.2,85,790.07 crores as at the end of March 2010. A major portion of the
investment was in the domestic market in government and other approved securities.
The Bank‟s market share in domestic advances was 16.28% as of March 2010.
Liabilities
The Bank‟s aggregate liabilities (excluding capital and reserves) rose by 8.93% from
Rs.9,06,484.38 crores on 31st March 2009 to Rs.9,87,464.53 crores on 31st March
2010. The increase in liabilities was mainly contributed by increase in deposits and
borrowings. The Global deposits stood at Rs.8,04,116.23 crores as on 31st March
2010, representing an increase of 8.36% over the level on 31st March 2009. The
Bank‟s market share in deposits was 16.31% as of March 2010.
PERFORMANCE HIGHLIGHTS
For highlighting the performance of State Bank Of India the components are as
under.
A. GLOBAL MARKETS DEPARTMENT
Global Markets Department at the Corporate Centre handles the Bank‟s Domestic
Treasury Operations across all time zones and covers activities in various markets
i.e. Forex, Interest Rates, Bullion, Equity and Alternative Assets, etc. RBI continued
with its easy monetary stance throughout the year.
B. CORPORATE BANKING GROUP
B.1 The Bank‟s Corporate Banking Group consists of three Strategic Business Units
viz., Corporate Accounts Group, Project Finance & Leasing SBU and Stressed
Assets Management Group.
B.2 Corporate Accounts Group (CAG)Corporate Accounts Group has six branches
at the following centers; Mumbai, New Delhi, Chennai, Kolkata, Ahmedabad and
Hyderabad. Hyderabad Branch was opened during the current year. These six
branches cater to 735 corporate clients.
126
(1) Cash Management Product
Cash Management Product (CMP) with its brand name SBIFAST extended its reach
for cheque/cash collection to 973 branches at 680 centres across the country, apart
from electronic payment/ collection from all branches of the Bank. Besides
substantial increase in Dividend Warrant business, cash pick-up facility and host-to-
host connectivity to clients to enable them to track collections/ payments and get
customized MIS have been initiated.
(2) Trade Finance
A more customized front-end tool for Corporate and Mid-Corporate clients is
underway which will enable them to lodge their Letter of Credit and Bank Guarantee
requirements from their office with their own templates.
(3) Supply Chain Finance
e-VFS (Electronic Vendor Financing Scheme) This scheme, on electronic platform,
provides automated payment and settlement of transactions as also real time MIS to
both Industry Majors and the vendors, apart from serving also as an accounting
software.
e-DFS (Electronic Dealer Financing Scheme) Approved dealers of Industry Majors
are financed for their purchases under the e-DFS scheme, through a web-based
electronic platform. Real time MIS is available on the web platform about the status
of the dealer‟s account as also for tracking of each invoice.
B.3. Project Finance & Leasing [SBU] Strategic Business Unit the Project finance-
SBU focuses on funding projects in infrastructure sectors like power, telecom, roads,
ports, airports, logistics and others. It also handles large non-infrastructure projects.
During the year ended March 2010, the focus was on syndication and underwriting of
project loans.
B.4. Stressed Assets Management Group (SAMG) Stressed Assets Management
Group (SAMG) which was set up to address high value NPAs with outstandings of
Rs.5 crores and above has now expanded its role to resolve all NPAs of Rs.1 crore
and above across the country with a view to providing specialised and focussed
attention in resolution of NPAs.
127
C. MID-CORPORATE GROUP (MCG)
The Bank's Mid Corporate Group is primarily catering to the banking needs of Mid
Corporates, with a turnover of Rs.50 crores and above. During the year, 4 Branches
were added, namely SCB Guntur, Bullion Branch Mumbai, Siruthozhil Salem and OB
Kanpur, taking the total number of MCG Branches to 56, covering all the major
business centres in the country. During 2009-10, Aggregate Credit Limit of
Rs.28,418 crores was sanctioned to 915 new clients. The Bank's Gold Banking
business comes under MCG.
Gold Banking
The Bank has undertaken several measures to become one of the leading banks in
Gold Banking business. The number of branches authorized for retail sale of Gold
Coins has increased from 518 as on 31.03.2009 to 1,121 as on 31.03.2010. The
Bank has also bagged a number of orders for bulk sale of Gold Coins. The Bank has
set up a dedicated Bullion Branch at Mumbai to provide focused thrust to Bullion
business. Sale of Gold (wholesale) has increased by more than 100% during
Financial Year 2009-10. Gold Banking software "Metagrid" has been introduced in all
dealing branches for efficient management of Gold Banking business and cover
operations.
D. NATIONAL BANKING GROUP (NBG)
National Banking Group of the Bank comprises of Metro and Urban branches of 14
Circles. Three Strategic Business Units, SMEBU, PBBU and GBU are operational for
taking care of the requirements of Small & Medium Enterprises, Personal Banking
segment and Government Business.
Alternate Channels: The need to give the Bank a modern look and feel was
necessary and hence, special focus was placed on alternate banking channels such
as ATMs, Internet Banking and Mobile Banking which offer customers hassle free
banking anytime anywhere.
Corporate & Institutional Tie-ups: During FY 2010, the Bank designed a special
package, the Defence Salary Package, for personnel of the three Armed Forces i.e.
the Army, Navy and Air Force who maintain their Salary accounts with us. The
Package offers benefits like concessions in service charges and interest rates.
128
Home Loans: SBI Home Loans is India‟s No.1 Home Loan brand. It has maintained
its position as India‟s “Most Preferred Home Loan” brand in CNBC-Awaaz Consumer
Awards continuously for four years since 2006.
Education Loans :State Bank Of India was the market leader in Education Loans
with a market share of 25% amongst PSU banks underpinning its belief in the future
of India and that the youth will be the face of India in the coming years. Agriculture
advances had grown by 16.54% between March 2009 and March 2010 and total
disbursements under Agri Advances were Rs.34,179 crores during Financial Year
2010, covering 12.32 lakh new farmers during the year 2010. International advances
increased by 12.49% from Rs.86,301 crores in March 2009 to Rs.97,071 crores in
March 2010 despite hardening of the rupee.
Personal Loans: In July 2009, SBI introduced „SBI Loan to Affluent Pensioners‟
enabling the government pensioners to avail personal loans upto Rs.3 lacs, so that
they need not go elsewhere to meet their different requirements viz., health,
marriage of relative, maintenance of house/vehicle etc
Auto Loans: Auto Loans went up by 45.44% Year on Year and Education Loans
grew by 34.61% between March 2009 and March 2010. State Bank remains a leader
in Auto loans with its market share in Auto loans going up by 180 bps from 15% in
March 2009 to 16.80% in March 2010. The Bank continues to be number one in
financing Maruti cars pan India for two consecutive years in a row and had increased
its presence in the market with higher penetration in the major brands like Chevrolet,
Hyundai, Tata Motors and Honda cars.
State Bank of India has introduced Advantage Car Loan Scheme which facilitates
Businessmen, Proprietary and partnership firms to avail of car loan of Rs.5 lacs and
above quickly. Pre-approved car loan, Retail Inventory financing for car dealers are a
few notable schemes which are on the anvil. Special Execution Desks have been
created in all Metros / Urban centres for the convenience of the customers to
execute their car loan documents at mutually convenient timings and places. The
Bank has Memorandum of Understanding with all major car manufacturers to
achieve highest penetration in the market. Car Loan Origination Software has been
introduced in the Bank to facilitate more customer acquisition.
129
INTRODUCTION OF NEW FACILITIES
State Bank Of India has introduced some new facilities which are as under.
1. Low cost (100) Personal Accident Cover of 4 lacs for all Saving Bank accounts
holders of the Bank.
2. Inter core charges for transfer transactions made NIL.
3. Pre-payment penalties abolished.
4. No minimum balance requirement for Saving Bank accounts.
5. Small and Medium Enterprise Insta Deposit Card for MSME segment, State Bank
Business Debit Card. and State Bank Virtual Card launched.
6. Introduction of on-line Savings Bank account opening facility.
7. Multi city cheque books provided to all our customers.14
HONOURS AND AWARDS
State Bank of India's achievements in various fields had received national and
international recognition which are enumerated below:
a) State Bank Of India won the Best Bank Award for Large and Most Socially
Responsible Bank by the Business Bank Awards 2009.
b) State Bank Of India got the National Award for Best Bank for Excellence in
the field of Khadi & Village Industries.
c) State Bank of India awarded for Best Information Technology driven
Innovation in Banking in the Country from the National Association of software
and service companies [NASSCOM].
d) SBI was the only bank featured in the "top 10 brands of India" list in an annual
survey conducted by Brand Finance and The Economic Times in 2010.
e) Ministry of Rural Development, GOI, awarded “Certificate of Excellence” for
State Bank‟s proactive role in establishing rural development.
f) Asia‟s Best Corporate Social Responsibility Practice Award instituted by Chief
Marketing Officer [CMO] Council Asia has been awarded to the State Bank in
Singapore.
g) State Bank Of India won the “First National Awards for excellence in lending
to Micro Enterprises”.2010.
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h) State Bank Of India Honoured for “First National Awards for excellence in
Small and Medium Enterprise Lending”.2010.
i) SBI had been rated as the Best Public Sector Bank for Rural Reach by Dun
and Bradstreet Banking Award 2009.
j) SBI had been awarded with Best Microfinance Award for the year 2009 by the
Asian Banker from the financial institutions across the Asia Pacific, Gulf and
Central Asia regions.
k) State Bank Of India got Best Online Banking Award, Best Customer Initiative
Award & Best Risk Management Award (Runner Up) by IBA Banking
Technology Awards 2010.
l) State Bank Of India was The Best Bank – Large and Most Socially
Responsible Bank by the Business Bank Awards 2009.
m) State Bank of India was awarded Best Bank 2009 by Business India.
n) State Bank Of India was The Most Trusted Brand 2009 by The Economic
Times.15
CURRENT SCENARIO
Financial Express reported that State Bank of India had turned cautious on lending
to the infrastructure, steel, textile and pharmaceutical sectors. India‟s largest lender,
which has seen a steep rise in bad assets during the Financial Year 2009-10, is now
in a phase of consolidation.
As per bank's policy explain that these are the segments where most of the defaults
are coming from, so State Bank of India will be very vigilant while lending. The
weakness in assets quality is clearly linked to the macro economic scenario.
Mrs, Arundhati Bhattacharya chairman of State Bank of India said that “In both large
corporate and mid-corporate group State Bank of India had a flat growth Quarter of
Quarter so State Bank of India is not looking at any aggressive growth in these
areas. However, retail has grown about INR 6,700 crore sequentially, so State Bank
of India will continue to grow there as long as the portfolio shows good return and not
to much of stress.*
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TRANSFORMATION IN SBI
The SBI has undergone major transformation in the recent years. The bank has
ventured into new areas of business like Pension Funds, General Insurance,
Custodial Services, Private Equity, Mobile Banking, Point Of Sale, Merchant
Acquisition, Advisory Services, and Structured Products etc. The bank foresees
tremendous growth potential in all these areas.
The bank has made forays into the rural banking with state of the art technology. The
State Bank of India has outlaid an ambitious plan to expand rural banking to 100,000
villages in the next few years.
[ * Source – Financial express]
The State Bank Of India has ambitious plans to focus on the high end market to
support India's increasing mid/large Corporate with a wide range of products and
services. The State Bank Of India was consolidating its global treasury operations
and diversifying into structured products and derivative instruments. State Bank of
India provides the largest amount of infrastructure debt and the bank is the largest
provider of commercial borrowings in the country. State Bank of India is a Fortune
500 company.
The State Bank of India is in the process of expanding its base overseas. In the
Financial Year 2009-10, it had 82 offices abroad spread over 32 countries. The
seven subsidiaries of SBI are SBI Capital Markets, SBICAP Securities, SBI DFHI,
SBI Factors, SBI Life and SBI Cards.16
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3.4 LENDING POLICIES OF STATE BANK OF INDIA
It is very important to discuss about the Lending policies of State Bank Of India to
know what role of State Bank Of India is playing in Economic Development of Indian
Nation during the period of 1990 to 2010. We have discussed here about major
lending policies of State Bank of India, which are as follows.
Lending policy denotes provision of funds for individuals for buying cars or houses
and businesses etc. Specifically, State Bank of India is a premier Bank with over 200
years of history, is the largest commercial bank in India in terms of assets, deposits,
profits, branches, customers and employees.
Lending Policies of State Bank of India can be widely categorized as below.
3.4.1 STATE BANK OF INDIA PERSONAL SEGMENT PRODUCTS
3.4.2 STATE BANK OF INDIA SMALL AND MEDIUM ENTERPRISE [SME]
SEGMENT PRODUCTS
3.4.3 STATE BANK OF INDIA AGRICULTURE SEGMENT PRODUCTS
Above mentioned policies are discussed one by one in detail as under.
3.4.1 STATE BANK OF INDIA PERSONAL SEGMENT PRODUCTS
State Bank of India has a variety of schemes under Personal Finance to satisfy
varying needs of the banking public. State Bank of India offers a wide range of
personal financial schemes in the Personal Banking Segment Finance like Car
Finance, Housing Finance, Education Finance and Personal Finance [Pension Loan,
Gold Loan, Mortgage Loan etc.]
The more details of the above mentioned personal finance schemes are manipulated
here.
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Min/Max Loan Product
Min 3 lacs Car Loan Overdraft
Min 5 lacs Advantage Car Loan
Min 10 lacs HOME LOAN PAL ( PRE-APPROVED LIMIT )
Min 25 lacs Home Loan to Businessman based on Annual Sales Revenue
Min > 30 lacs to 50 lacs Advantage Home Loan
Min above 75 lacs Premium Home Loan
Max Rs 50000/- Loan for Subscription of IPOs, SBI Loan to Pensioners (Family Pension)
Max 1 lac Gram Niwas (For Purchase of Land) SBI Loan to Pensioners
Max 1.5 Lac SBI loan to affluent Pensioners (Family Pension)
Max 2 lacs Gram Niwas (For Repairs/ Renovations)Jai Jawan Pension Loan
Max 3 lacs Home Loan (For Furnishings/Consumer durables) SBI Loan to affluent pensioners
Max below 5 lacs Ezee Car Loan
Max 5 lacs Gram Niwas (For Construction/ Purchase of house)
Max 7.5 lacs SBI Scholar (List C- 39 Institutes)
Max 10 lacs
Home Loan (For Repairs/Renovations) Tribal Plus Earnest Money Deposit Scheme SBI Scholar (List B – 54 Institutes) SBI Student Loan (For Studies in India) Loan Against Shares (in Physical Form) Gold Loan
Max 15 lacs SBI Scholar (List A- 7 IIMs) Xpress Credit -Car Loan Used Vehicles
Max 20 lacs SBI Student Loan (For Studies Abroad) oan Against Shares (in DEMAT Form)
Max 30 lacs Easy Home Loan
Max 10 Crore Min 10000/- (R & SU) & 24000/- (Metro & Urban) Max 10 lacs
SBI Realty SBI Saral
Min 25000/- Max 10 lacs SBI Home Plus
Min 25000/- Max 1 Cr Loan Against Mortgage of Immovable Property
Min 3 lacs Max 1 Cr Reverse Mortgage Loan
Min 5 lac Max 1 Cr SBI Max gain17
Product Special Features/ Conditions
Home Loan Age- Min 18 Yrs; Loan to be fully repaid by the age of 70 Yrs; SA may sanction loans to individuals above 70 years, provided son / daughter / spouse, below the age of 50 years, with sufficient income for servicing the loan repayment, joins as co borrower / guarantor Platinum Age Limit- 75 Yrs if i) Estimated Rental Value 80% of EMI & ii) Margin 30% Age of younger borrower will be taken for fixing repayment period Maximum No of Co-borrowers- 3 (including Spouse/Children/Parents/ Siblings) AGM may relax it if i) Property in joint name of all borrowers & ii) Repayment through Joint A/C Expected rent accruals from the proposed house being let out (net of taxes, cess etc.) may be reckoned for computation of Loan Amount subject to it not exceeding applicant‟s NAI Regular income from all sources including performance linked incentives, bonus etc can be Considered, in whole or in part. Average of last two years, to be taken to compute NAI SA may permit adding back of depreciation to compute NAI in case of loan to businessmen, professionals and self-employed individuals who run the business/activity on proprietorship basis and who have availed loans only from us for buying the assets on which depreciation is being claimed Moratorium for buildings up to 7 floors – 18 Months; 14 floors – 24 months; 21 floors – 30 Months & More than 21 floors – 36 Months; Maximum Repayment – 25 Yrs Loan for more than one house may be approved subject to satisfactory conduct of existing loan accounts evidenced from account statement & CIBIL Report Obtention of only 6 undated & duly signed PDCs required instead of 48 PDCs if Repayment through ECS/SI (5 PDC for EMIs & 1 for full loan amount) Interim security pending creation of Charge may be waived by SA or AGM(Region)/(Branch) if applicant is of undoubted integrity & standing and also in case of loans of employees of Central/ State Govt, PSUs and reputed Corporations and Institutions, if check-off facility is provided along with an irrevocable undertaking from the employer for making repayment of outstanding loan out of any amount payable to the employee including terminal benefits on retirement/ resignation towards all dues pertaining to the account Prospective borrower(s) can exercise one time option while submitting loan application, to avail Home Loans either at the place of construction or place of employment/
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profession/business activity, at a place of residence or at a Branch located at other centre where he/she has ongoing relationship for last 2 years, by securing the loan repayment through check-off facility or by obtaining post-dated Cheque/ECS/S.I. as per extant instructions
HL to Business
should be making profit continuously over last 3 Years Loan higher of Income as per ITR + Depreciation Claimed or 5% of Annual Sales Revenue OD Facility Not Permitted
NRI Home Loan
Age- Min 18 Yrs; Loan to be fully repaid by the age of 60 Yrs [AGM-Region)/(Branch)may permit repayment up to age of 70 years if satisfied about the continuity of the income] Should have been employed for at least 2 years and presently holding a valid job contract / work permit
SBI Realty
Purpose- Purchase of Plot Undertaking to construct the house within 2 Yrs from the date of availment of the loan For loans above Rs 50 lacs i)Property to be valued by two independent empanelled Valuers Lower of the two valuations to be considered & ii) two title search reports to be obtained – one before loan sanction another before disbursement Max Repayment – 180 Months
SBI Maxgain
Facility – Overdraft (with ATM, INB, Cheque book)Should have SB/CA (Existing or Prospective) with minimum balance of Rs 5000/-This stipulation not applicable to Salary Accounts
SBI Home Plus (Personal loan)
Existing Home Loan customers with a satisfactory repayment record of at least one year and maintaining a SB/CA account with us Loan = (75% of Property Value – O/s in HL A/c)Facility – TL or OD (with ATM)Repayment – i) If EM extended to cover the loan, Max 120 Months including moratorium ii) If EM not extended, lower of Remaining HL tenure or 120 Months including moratorium
Tribal Plus (For Hilly/ Tribal Areas)
Age – Min 21 Yrs; Loan to be fully repaid by the age of 65 Yrs For Employees – Min 5 Yrs of Service; Loan – 36 times NMIs TPG of another employee or group of employees ;Min Liquid Security – 30% of loan amount.AGM Region/Branch may reduce it to 15% of the loan amount in respect of tie-ups with govt. Depts., reputed corporate with availability of bulk business potential of not less than Rs.2 cr.For Professionals, Self employed, businessman and agriculturists – Min 5 Yrs of Experience and i) Maintaining deposit A/c with Avg Bal of Rs 5000/- for last 2 Yrs or ii)maintaining loan account for a minimum period of 2 years(without any instance of overdue and bouncing of Cheque etc) and classified as Standard Assets; Loan – 2 times Average NAI for the last 3 Yrs TPG or group guarantee equal to or more than the loan amount Min Liquid Security – 50% of loan amount ; Max Repayment – 15 Years
Gram Niwas
Age - 18 years to 50 years. Age > 50 Yrs may be considered if all the legal heirs join as guarantor Should have satisfactorily conducted account with us or a member of a Self Help Group having savings / loan accounts with us Residential Property should be located in Rural Area – Comprising any village or any area in a town with population not exceeding 50000 as per census 2001 Facility – TL or OD with ATM; Max Repayment – 15 Years
Sahyog Niwas Rural Home Loans to SHGs for on lending to its members SHGs should have good track of payment records for 2 Yrs Loan Amount 10 times the savings of the corpus of SHG including limits already sanctioned
Earnest Money Deposit Scheme
Loan up to 100% of application money – Max Rs 10 lakh Age – Min 21 yrs; Facility – Demand Loan Repayment – i) By refund in case of Non Allotment or ii) By Regular HL in case of allotment but not more than 12 months from the date of disbursement of the loan
Reveres Moorgate Loan
Age: Above 60 Yrs (First Borrower); When Loan Jointly with spouse – Age Above 58 Yrs.Should not have more than one surviving spouse – Undertaking to not remarry during loan term Loan availed jointly with spouse: Loan Tenor – 15 Yrs if age of Younger Borrower up to 68 Yrs & Loan Tenor – 10 Yrs if age of Younger Borrower above 68 Yrs Loan availed in single name: Loan Tenor – 15 Yrs if age of Borrower up to 68 Yrs and Loan tenor – 10 Yrs if age of Borrower above 68 Yrs Loan Amount – 90% of value of property (it includes interest till maturity) Loan may be disbursed in Monthly/ Quarterly Installments or 50% in lump sum and remaining 50% through periodic payments
Green HL
Financing Green Buildings (Energy Savings – 20-30% & Water Savings – 30-50%) Incentives – 5% waiver in Margin, 0.25% Concession in Interest Rate & Waiver of Processing Fee
CRE Home Loan
Loan for third house onwards or purchase of plot Loan for extension Present house where more than 50% of EMI proposed to be repayable through rent receivable from the extended portion 0.25% additional Interest
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ISHUP Home loan with Central Government subsidy to EWS /LIG persons Average Monthly Household income – Up to Rs 5000/- (EWS); Rs 5001/- to Rs 10000/- (LIG) Max Loan Amount Eligible for subsidy – Rs 1 Lac Loan Term – 20 Yrs including moratorium period Interest subsidy @ 5% on admissible loan amount over the full period of loan
Surakshit HL A separate Product for customers who opt for Home Loan with Life Insurance cover
Easy HL
Facility- TL or OD (OD as Maxgain – Min Loan 5 lacs) Interest during 1st Year- 1% below card rate; 2nd & 3rd Year- 0.25% below card rate; 4th Year onwards– card rate; Card Rate – 1.50% above base rate
Advantage HL
Facility- TL or OD (OD as Maxgain) Interest during 1st Year- 1.25% below card rate; 2nd & 3rd Year- 0.50% below card rate; 4th Year onwards- card rate; Card Rate – 1.75% above Base Rate
Premium HL
Facility- TL or OD (OD as in Maxgain up to Rs 1 Crore) Interest over the tenor of loan- At Card Rate – 1.75% above Base Rate
Yuva Home Loan
Salaried employees of Private Sector, MNCs, Govt, PSUs & Govt Undertakings Age: YUVA – 21 to 35 Yrs; YUVA Couple – Min contribution of 25% to combined EMI by each of Husband & Wife then Upper Age Limit stands relaxed to 40 Yrs YUVA Family – Contribution of 75% to combined EMI by YUVA or YUVA Couple, then Parents may join as co-borrowers Min NMI – Rs 50000/- ; Expected Rental Income from proposed property not to be added Fixed Loan Term of 25 Years Repayment – First 36 Months – Only Interest EMI to be paid from 37th month onwards i.e. in 204 EMIs Loan Amount – 20% extra i.e. 1.2 times the loan as per Regular HL based on EMI/NMI ratio Benefit under Corporate Salary Package if employer Company Covered under CSP If not under CSP, then Festival Loan (DL) equivalent to 3 Months NMI repayable within 36 Months permitted
Triple H+ (Theme- Health, Happiness & Home)
Validity- Sanction after 1.10.2010, Sourcing Up to- 31.1.2011, Disbursement- Up to 28.2.2011 Min Loan- 1 lakh; Min Term- 10 Yrs; Age- Below 55 Yrs; Should be Resident Indian Borrower to be covered under „Group Criti9‟- Product of SBI life covering 9 critical illness Coverage Period- 5 Yrs; Premium to be borne by Bank; Sum Assured as per HL Limit HL Limit (SA): >Rs 30 lac (Rs 5 Lac); > Rs 10 lac and<=30 lac (Rs 3 lac); >Rs 5 lac and <=10 lac (Rs 1lac); >= 1 lac and <=5 lac (Rs 25000/-)18
Car Loan
Age – 21-65 Yrs (For Sanction of Loan); Loan must be fully repaid before the age of 70 Yrs NAI of applicant and/or co-applicant, if any, together to be Rs. 1, 00,000/- and above Income of spouse, father, mother, brother and sister may be included for arriving at the loan eligibility (any one) Cost of accessories should not exceed 5% of the cost of vehicle or Rs. 25,000/-, whichever is less Max Repayment – 7 Yrs
Car Loan Used
Vehicle should not be more than 5 Yrs old Registration book should not be duplicate one; Valuation of Vehicle required Repayment within 7 Yrs (For Salaried)/5 Yrs (For Others) from date of original sale
Certified Pre Owned Car Loan
Valuation of Vehicle not required; Vehicle will be certified by used car dealers Dealers pay the sellers of used cars without transferring the ownership in their name As and when they find the purchaser, the vehicle is sold and ownership transferred to purchaser So, Stamped indemnity to be obtained on Dealer‟s letter head to protect Bank‟s Interest Interest- Lower than Used car - Other conditions as applicable to Used Car Loan Scheme)
Car Loan Takeover Vehicle should not be more than 2 Yrs old under single ownership No Insurance Claim should have been availed Loan with other bank should be a Standard AssetInterest as per new vehicle if change in ownership is not envisaged Reimbursement of costs of unencumbered vehicles up to 2 Yrs of age permitted
Car Loan OD Min Loan - Rs 3 Lac Facility – OD (ATM,INB, Cheque book)
NRI Car Loan
NRI/PIO – Guarantor & NRI‟s/ PIO‟s Nominee – Principal Borrower Age – 21- 65 Yrs (for both); Loan to be repaid fully before guarantor turns 65 Yrs of Age NRI (Guarantor) should be employed abroad for at least 2 Yrs maintaining NRI A/c with SBI for at least 12 months with min average bal of Rs 50000/- or New Account with USD 5000/- or equivalent Guarantor - Min NMI USD 1000 or Min NAI USD 12000
Ezee Car Loan Interest Rate- TL Facility - 1st Yr – 8% p.a. (Fixed); 2nd & 3rd Yr- 9.75% (Fixed); 4th & 5th Yr- 3.75% above Base Rate (Floating); 6th & 7th Yr- 4.00% above Base Rate (Floating)
Advantage Car Loan
Min NAI – Rs 250000/- ; Repayment – Max of 7 Yrs for allInterest Rate- TL Facility - 1st Yr – 8% p.a. (Fixed); 2nd & 3rd Yr- 9.75% (Fixed); 4th & 5th Yr- 3.50% above Base Rate (Floating); 6th & 7th Yr- 3.75% above Base Rate (Floating)
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Two wheeler Loan For regular petrol/diesel/gas operated scooters & motor cycles:Min. NMI Rs. 6,250/-; or Min. NAI Rs. 75,000/-For mopeds and battery-operated Two-wheelers: Min. NMI 5000/-; or Min. NAI 60000/- Loan – 6 Months NMI or half of NAI Max Repayment – 36 Months Bulk Business – Financing 25 or more Two Wheelers within a period of 3 months.19
SBI Student Loan
To be sanctioned in the jointly in the name of the Student and his Parent/ Guardian No Security for loans up to 4 lacs - Each ward of a parent/guardian may be sanctioned loans up to Rs. 4 lakhs individually without insisting for any security For Loans Above 4 lacs & up to 7.50 lacs – Suitable TPG For Loans Above 7.50 lacs – Tangible Collateral Security of Suitable value Moratorium – Course Period + 1 Year or 6 months after getting Job, whichever is earlier 0.50% concession in interest rate for girl students wef 2nd Mar 2009 1% concession in interest rate for full tenure of loan full interest serviced during moratorium Loan to be repaid in 5-7 Yrs after commencement of repayment Loans up to Rs. 10 lacs for studies in India and Rs. 20 lacs for studies abroad are reckoned under PSA
SBI Scholar Loan
To be sanctioned jointly in the name of the Student and his Parent/ Guardian Sanction & Disbursement At Campus/ Branch designated by Circle near the campus After completion of the studies and if the student desires, the loan account may be transferred to a branch closer to the place of co-borrower and preferably to the branch which has made KYC verification at the time of availing loan for tracking purposes No Security- however, Parental Co-obligation may be substituted by a suitable TPGMoratorium- Up to 6 months after completing the course
SBI Saral
Min NMI - Rs 5000/-; Loan- 12 times NMI (Max Rs 10 lakh); Repayment – 6-48 MonthsIndividuals other than salaried person not eligible
Xpress Credit
Min NMI – Rs 5000/- (Min NMI Rs 3000/- if salary accounts of entire enterprise with us) Loan – 24 Months NMI; Repayment- Lower of 60 EMIs or Remaining Service; Facility- TL only Interest Rate based on type of Check Off Full Check off – ROI 5.00% above Base Rate; Partial Check off – ROI 5.50% above Base Rate; No Check off – 7.00% above Base rate
Loan Against Mortgage of Property
Max age - 60 years Min NMI - 12000 (For salaried); Min NAI - 150000 (For others) Loan- 75% of Value of Property but EMI/NMI not exceeding Repayment (TL) - Max 120 Months or date of Retirement whereRepayment (OD) - Max 60 Months, Monthly reducing DP
Gold Loan
Age – Min 21 Yrs; Proper Introduction & Capacity to service the Interest Repayment (DL) – Within 30 Months; OD Facility withdrawn Loan not granted against the security of primary gold, i.e., 24 carats gold bars and biscuits Can be granted against specially minted gold coins sold by Bank as RBI clarified that it need not be treated as „Bullion‟ Processing Fee- Loans up to Rs 25000/- Rs 500/- per application & Loans above Rs 25000/- 1% of loan amount inclusive of service tax or Rs.1000/- per application whichever is higher
Bhagya Rekha
Demand Loan to women only against Savings in Recurring Deposit (At least 12 Months Old)Loan - Twice the balance outstanding in the RD account; Min Rs.5,000/- Max Rs.50,000/-RD Term – 36 Months – Min Installment Rs 400/- – Min Loan 10000/- RD Term – 60 Months – Min Installment Rs 200/- Min Loan 5000/- Clean portion of loan to be repaid in 24 or 48 months, rest to be recovered from Maturity Value.
SBI Loan to Pensioners
Age up to 70 Yrs – Max Repayment 60 EMIs; Age 70-72 Yrs – Max Repayment 48 EMIs (For Family Pensioner – Max Age 65 Yrs & Max Repayment- 36 EMIs)Loan – Max 12 Months Net Pension (For Family Pensioner – Max 9 Months Net Pension)Loan above 25000 to be guaranteed by spouse or any family member/3rd party worth the loan
SBI Loan to Affluent Pensioners
Age up to 70 Yrs – Max Repayment 36 EMIs; Age 70-72 Yrs – Max Repayment 24 EMIs (For Family Pensioner – Max Age 65 Yrs & Max Repayment- 36 EMIs) Loan – Max 12 Months Net Pension (For Family Pensioner – Max 9 Months Net Pension) Loan to be guaranteed by spouse or any family member/3rd party worth the loan Pensioners to submit PAN Number or Form 15H before availing loan under this scheme
Jai Jawan Pension Loan
Loan for Pensioners of Armed Forces - Army, Navy and Air Force & Paramilitary Forces - CoastGuards, Rashtriya Rifles, CRPF, BSF, ITBP, etc.Age – Up to 50 Years; Loan – 48 times Net Monthly PensionMax Repayment – 84 Months
Home Loan PAL (PREAPPROVED LIMIT )
KYC compliance and Assessment of eligible loan amount are completed before finalization of the property deal by the borrower Borrowers get assured of eligible loan amount and the time to be taken for disbursement PLAL will be valid for a period of 2 months Available at RACPC only.
20
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3.4.2 STATE BANK OF INDIA SMALL AND MEDIUM ENTERPRISE
[SME] SEGMENT PRODUCTS
State Bank of India is a pioneer in Small and Medium Enterprise financing in India.
As a bank, it has been playing a critical role in the overall growth and development of
the Small and Medium Enterprise sector. The Bank has developed a wide array of
products and services in order to cater to the evolving needs of the Small and
Medium Enterprise sector.
Apart from a wide network of branches across the country, 579 specialized Small
and Medium Enterprise branches across the country have been kept under special
focus to develop an effective platform for Small and Medium Enterprise lending.
Single point contact through dedicated relationship managers have been put in place
for medium as well as small enterprises. Centralized Processing Cells have been
created for quick turnaround time in sanction & disbursal for loans up to Rs 1 crore.
For inclusive growth, a special scheme called 'Small and Medium Enterprise
Collateral Free Loan' for Micro & Small Enterprises segment has been designed for
lending under Credit Guarantee Trust for Micro and Small Enterprise [CGTMSE]
guarantee coverage with liberalized terms up to a credit limit of Rs 1.00 crore.
Supply Chain Finance Unit of Small and Medium Enterprise Offers Electronic Vendor
Financing Scheme (e-VFS) and Electronic Dealer Financing Scheme (e-DFS). Both
schemes are fully automated and work on the Banks internet banking platform which
is robust and real time. The Bank has adopted Cluster approach as a strategy to
improve the credit flow to Small and Medium Enterprise sector through industrial and
artisan clusters across the country. It seeks to extend techno-managerial assistance
and counselling support to Small and Medium Enterprises through Consultancy
Services Cell and Project Uptech. This initiative facilitates technology up-gradation in
Industrial Clusters. The bank promotes entrepreneurship through Entrepreneurship
Development Programme (EDPs) under tie-up with Entrepreneurship Development
Institutes.
The more details of the Small and Medium Enterprise Segment Finance Schemes
are elaborated here.
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Loan Amount Product(s)/Scheme(s)
Max 25 thousand Auto Clean; Swarojgar Credit Card (Up to Rs 30000/- in deserving cases)
Max 50 thousand Cyber Plus
Max 2 lakh Artisan Credit Card
Max 10 lakh SME Credit Card; Doctor Plus (Non Allopathic); SBI Dental Equipment Plus
Max 15 lakh Car Loan SME (Used Vehicles)
Max 20 lakh SBI Shoppe
Max 25 lakh SME Credit Plus
Max 50 lakh General Purpose Term Loan (GPTL) SSI
Max 1 Cr SME Collateral Free Loan Open term Loan (Services) Philips Tie-up (Medical Practitioners); Cold Storage under Traders Easy Loan (TEL)
Max 2 Cr SLC (TL)-Non Corporate
Max 2.5 Cr Open Term Loan (Mfg)
Max 5 Cr Doctor Plus (Metro & Urban – Individuals & Other Centers- Corporate & Partnership) GE Healthcare Tie-up; Philips Tie-up (Non Medical Practitioners); WC Finance for T & S Sector; Standby Line of Credit - SLC (WC); Standby Line of Credit - SLC (TL)-Corporate
Max 10 Cr Doctor Plus (Metro/Urban – Corporate & Partnership)
Min 25K Max 5 Cr Traders Easy Loan (Half of Rent Plus)
Min 50K Max 5Lakh SBI SMILE (Professional & Self Employed)
Min 50K Max 10 Cr Rent Plus (No ceiling in respect of loans to Medium and Large Corporate through Rent Securitization route)
Min 1 lakh Max 5 lakh SBI SMILE (Micro and Small Industries & Units under Project Uptech)
Min 2 lakh No Max Paryatan Plus
Min 5 lakh Max 25 lakh SME Smart Score (T&S)
Min 5 lakh Max 50 lakh SME Smart Score (T&S)
Min 5 lakh Max 1 Cr Flexi Loan for T&S Sector; Construction Equipment Loan (ESCORTS)
Min 5 lakh Max 5 Cr Rice Mills under Traders Easy Loan (TEL)
Min 10 lakh Max 7.5 Cr Transport Plus (Non-Corporate)
Min 10 lakh Max 10 Cr Transport Plus (Corporate)
Min 15 lakh Max 1 Cr Construction Equipment Loan (CEL) (JCB)
Min 15 lakh Max 5 Cr Construction Equipment Loan (CEL) (Telcon/Volvo)
Min 25 lakh Max 10 Cr Corporate Loan
Min 25 lakh Max 25 Cr SME CEL
Min 25 lakh Max 50 Cr SME CEL (Delhi, Kolkata, Mumbai, Chennai, Hyderabad & Bangalore)
No Max or Min SBI-Siemens Medical Equipment Plus; SME Car (New);Finance to restaurants; School Plus; Rice Mill plus
21
Margin Product(s)/Scheme(s)
NIL Auto Clean; Swarojgar Credit Card; Artisan Credit Card (up to 25K) SME Credit Card (Up to 25K)
7.5% SBI SMILE
10% Doctor Plus (Up to 10 lakh); Open Term Loan (Mfg & Ser)
15% School Plus; Car Loan (SME)
20% Artisan Credit Card (Above 25K) SME Credit Card (Above 25K) Doctor Plus (Above 10 lakh & up to Rs 5 Crores) Transport Plus SBI Paryatan Plus SLC (TL)
Industrial Enterprises
Original Investment in Plant & Machinery
Service Enterprises
Original Investment in Equipments
Micro (SSI, Priority Sector)
Up to Rs 25 Lakhs Micro (SBF, Priority Sector) Up to Rs 10 Lakhs
Small (SSI, Priority Sector)
More than Rs 25 Lakhs to Rs 5 Crores
Small (SBF, Priority Sector) Private Retail Trade <=20 lacs
More than Rs 10 Lakhs to Rs 2 Crores
Medium (C&I Non Priority Sector)
More than Rs 5 Crores to Rs 10 Crores
Medium (C&I, Non Priority Sector)
More than Rs 2 Crores to Rs 5 Crores
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25% SME Smart Score (WC) SME CFL (TL) Doctor Plus (Above Rs 5 Crores & up to 10 Crores) Traders Easy Loan (TL) SBI Shoppe (New): WC Finance to T&S Sector Finance to Restaurants GPTL (SSI)
33% SME Smart Score (TL)
40% Rent Plus (CGMs of Circles have discretion to reduce the margin to 30%) SBI Shoppe (Old Property)
22
Product Special Features/ Conditions
Auto Clean Loan
To meet cost of LPG/CNG kit for auto rickshaws Account should be standard if Auto already financed by us Work order from RTO required to ensure availability of refilling facilities at the centre: Borrowers of other Banks not Eligible, however, takeover permitted Hypothecation of Vehicle or Group Guarantee Max Repayment- 24 Months / 36 months If already financed by us
Swarojgar Credit Card
A composite Loan including term loan / revolving cash credit TL component to meet investment in fixed assets TL to be repaid within 5 years in suitable installments Revolving Cash Credit limit to be fixed at 20% of projected annual turnover A component for consumption credit not exceeding 20% of limit could be built in keeping in view the value of the family labour in the productive activity: Valid for 5 years subject to satisfactory annual review
Cyber Plus
To set up Internet/ Cyber cafes especially at rural and semi- urban centers Presently introduced in Ahmedabad, Bangalore, Chennai, Hyderabad & Mumbai Circles/Should be Minimum SSC or 10th STD passed & Should possess basic computer knowledge Age – 18 to 45 years Project Cost – Rs 59000/- Loan Rs 50000/- + Margin: Rs 9000) Repayment: 36 to 40 months Project Designed by N-Logue, a nonprofit organization comprising of specialists from IIT Chennai Kiosk to be set up named as "CHIRAAG"
Artisan Credit Card
All existing artisans‟ borrowers enjoying credit facilities up to Rs 2 lakh are eligible Preference to artisans registered with Development Commissioner Beneficiaries of other Govt sponsored loan schemes not ligible Minimum score as per scoring model - 60% (36 out of 60) Validity - 3 years subject to satisfactory annual review
SME Credit Card
Units in existence for 2 years with excellent performance & credentials whether banking/not banking with us/other bank New Units not eligible Validity - 3 years subject to satisfactory annual review Credit ummations in the account should not be less than 50% of the projected sales turnover If so, the outstanding as on due date of review to be made repayable in suitable monthly installments Max Repayment Period for TL - 5 years Stock statement - once in a year on 28th Feb
SME Smart Score
Age of Chief promoter / Chief executive - 18 to 65 years Validity of Sanction for Working capital loans - 2 Years Different Limit for each year may be specified Documents to be obtained for higher of the two limits
SME Smart Score
Minimum score as per scoring model – 60% (60 out of 100) with a minimum of 50% under each sub head like Person details (max:30 marks), Business details (max:50 marks) & collateral details (max: 20 marks) Min. Marks under collateral details are 10 except in cases where Collateral should not be asked as per Bank‟s norms, where the minimum marks will be nil nits not able to score 60% or more marks in the scoring model can still be considered by the Branches under the normal credit dispensation based on specific considerations Max Repayment for TL - 5 years excluding moratorium not exceeding 6 months Working Capital loans to be renewed if credit score is 35 and above out of 60 under business
SME Collateral Free Loan
New and existing Micro and Small Enterprises engaged in Manufacturing and service sector Exceptions- Retail/ Wholesale Traders, Educational Institutions, Training Institutions and SHGs Mandatory Guarantee Cover under CGTMSE For loans > Rs 5 lakh and below Rs 25 lakh, obtaining Min Score as per scoring Model not to be insisted For Loans between Rs.25 lacs to Rs. 1.00 Crore- CRA Rating Applicable (SB10 & above) Max Repayment for TL - 7 Years including moratorium period not exceeding 6 months -1 year Stock Statement Periodicity - Once in a quarter (Up to 25 lac) & Once in a month (Above 25 lac) Inspection of the Unit – Quarterly (Up to 25.lac) & Monthly (Above 25 lac)
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SME Car Loan
For purchase of passenger cars, jeeps, multi utility vehicles, and sports utility vehicles (Used Vehicle should not be more than 5 years old/ Registration Paper should not be duplicate) Can be extended to as many promoters/partners of the SME units, SME unit itself, their family members and senior executives,Family members mean spouse & children Case I – When the loan is availed of in the name of an individual: Min NAI of the Individual - Rs. 1 lac as per last year‟s ITR Case II – When the loan is availed of in the name of unit: Promoter/partner will be the joint applicant; Min NAI of Joint Applicant – Rs 1 lac as per ITR In case II, “Senior Executive” of the unit can also join as co-applicant provided, Company or Promoter(s)/Partner(s) will guarantee the repayment of loan In such case, Senior Executive‟s NAI shall be clubbed with the NAI of joint applicant (Promoter / Partner) to determine the Minimum Eligible Income “Senior Executive” is defined as employees in Top Management, Directors or employees holding the position of responsibility in an Organization or in other words Executives falling one level below the promoter/partner in hierarchy Loan Amount - 2.5 times NAI For New Vehicles – No Ceiling of Loan Amt; For Used Vehicles - Max Loan Rs 15 Lakh; EMI/NMI percentage should not exceed 50% A.G.M. Region/Branch may relax it to 60% in deserving cases or owing to strategic reasons; Documents – As per P Segment Max Repayment Period - 7 years (For Used Vehicles: Within 7 yrs from date of Original sale)
Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE) Set up by SIDBI & GOI
All fund based & Non-fund-based credit facilities provided to a single borrower in the Micro & Small Enterprises sector up to Rs 100 lacs (wef 08.12.2008) can be covered All proposals > Rs 50 lacs should be rated internally No collateral Security and/or Third Party Guarantee should be taken Personal guarantee of the borrower Promoters, Partners etc may be obtained In case of loan sanctioned to Private/Public Limited company, the guarantee of directors will be treated as third party guarantee Account should not have become bad Interest rate should not be more than 3% over PLR Business or activity of the Borrower should not have ceased Loan to retail/wholesale trade, educational institutions and training institutions & SHG etc are not eligible for coverage
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Extent of Guarantee Cover: i) Loan Amount Up to Rs 5 Lacs (For Micro Enterprises Only) - 85% of amount in default, max Rs 4.25 lacs ii) Loan Amount Up to Rs 50 Lacs except Micro Enterprises up to 5 lacs a) Women entrepreneurs/Units in NE Region - 80% of amount in default max Rs 40 lacs b)Others - 75% of amount in default max Rs 37.50 lacs iii) Loan Amount Above Rs 50 lacs & up to Rs 100 lacs: a)Women/NE Region: Rs 40 lacs + 50% of amount in default above Rs 50 lacs overall ceiling Rs 65 lacs b) Others: Rs 37.50 lacs + 50% of amount in default above Rs 50 lacs overall ceiling Rs 62.5 lacs „Amount in default‟ means lower of Outstanding including Interest as o on date of NPA or date of lodgment of claim but not exceeding the amount Guaranteed
Guarantee Fee: Up to Rs 5 lacs – 1%, > Rs 5 lacs – 1.5% (0.75% for NE region & Sikkim for loans up to Rs 50 lacs)GF for loans up to Rs 2 lacs will be absorbed by Bank Annual Service fee shall be paid by debit to borrower‟s account within 60 days i.e. on or before May 31, of every year Annual Service Fee – Up to Rs 5 lacs: 0.5%, Above Rs 5 lacs: 0.75%;ASF in excess of 0.25% will be absorbed by bank for units in NE Region & Sikkim
Claim Settlement Trust shall pay 75 per cent of the guaranteed portion or amount in default whichever is less within 30 days of lodgment of claim if otherwise found in order, Balance 25 per cent of the defaults or guaranteed portion, as the case may be, will be paid on conclusion of recovery proceedings by the lender Appropriation of Residual Recovery Amount realized, if any, from the sale of assets of the Unit or otherwise must first be credited in full to the Trust before claiming the remaining 25 per cent of the default / guaranteed portion
Doctor Plus
Borrower(s)/Promoter(s)should be Medical Registered Practitioners of any discipline (MBBS/ BDS/ BAMS/ GAMS/ BHMS) Min Marks as per as per Scoring Model for loan up to 25 lakhs – 40 out of 75 CRA Model applicable for loan above 25 lakhs (CRA below SB 8 not be considered) Collateral Security For loans up to 25 lakhs - No Tangible collateral security subject to CGTMSE coverage For loan above Rs 25 lacs & up to Rs 1 Crore - Tangible Security of at least 25% or CGTMSE coverage For loan above Rs 1 Crore- Tangible Security of at least 25% & Personal Guarantee of Promoters Max Repayment: 5 years (For buying equipments and expansion/ renovation/ modernization of existing premises) Max Repayment: 7 years; (For setting up clinic, nursing home, pathology labs, drug store and other infrastructure) Max. moratorium – 12 months Rate of Interest -Based on credit scoring model for loans up to Rs.25 lacs & Based on CRA rating for loans beyond Rs.25 lacs
Existing customers with a satisfactory track record. New connections including take -over can be considered subject to compliance of take- over norms Loan Amount -20% of the projected annual turnover (WC) or 75% of the capital costs to be incurred for business (TL) or 65% of
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realizable value of property whichever is less Repayment - Demand Loan - 36 months; Term Loan - Up to a maximum of 60 months Working Capital credit facilities would be valid for - 2 years subject to annual review At the time of renewal / annual review of the account, if the limits are assessed to be less than the existing limits, and the borrower is not in a position to repay the excess amount in 90 days, the excess amount would be carved out as a demand loan and may be allowed to be repaid within a maximum of 24 monthly installments During this time, if on later renewal, the borrower is eligible for higher limits, the repayable amount and the repayment period would be reduced accordingly Stock statements need to be furnished at the time of sanction and at quarterly intervals, as at the end of February, May, August and November thereafter Stock statements waived for TL and DL Credit summations should be at least 200% of the CC limit
Rent Plus
Loan to Owners of large commercial / office spaces rented out to large corporate, MNCs, banks, PSUs, our Bank, etc. to meet liquidity mismatches Administrative clearance from GM (Network) – For properties situated in rural areas Authority structure For approval of lessees other than MNCs/Banks/Large and Medium size Corporate: a. GM (Network)/ GM (MCG) / GM (CAG) for loans up to Rs. 10.00 crores b. CGM of the Circle/CGM (MCG)/CGM (CAG) for loans exceeding Rs.10.00 crores and up to Rs. 50.00 crores. Concerned Group Head for loans Beyond Rs. 50.00 crores Loan Amount – i. 60% of the gross rental income for the residual lease period less (advance rent received+ property tax + income tax + other statutory dues of the lessor) or ii. 60% of realizable value of the property whichever is less Discretion to allow up to 70% under item i or iii is vested with CGM of the Circle/Max Repayment - 7 Years or residual lease period whichever is less
School plus
Loan to Government Aided schools / colleges; Private schools /colleges; Schools/ colleges run by trusts of good standing; Technical institutes recognized by AICTE / NBA / MCI Professional colleges and coaching institutes are not eligible under this product and should be assessed on usual CRA model Finance based on credit score; Applicant getting a credit score of less than 4 are not eligible Max Repayment - 36 EMI (Up to 2 lacs); 60 EMI (2 to 5 lacs) & 84 EMI (5 lacs & above]
Transport Plus
Loan to Surface transport operators owning more than 10 vehicles including the Proposed one Holding valid national / State route permits Promoters/CEO should be IT assesses with annual income of Rs.3lac as per Pre Yr IT Assessment Promoter/ CEO should have experience of 3 years or more in the field Should be reputed and IBA approved in case of trucks Should record a rising trend in income and profits in the last two years Should register a profit of at least Rs.3 lacs in the past two years Should have had satisfactory dealings with banks /FIs for at least 2 years Should have a receivable level of within 4 months Value of orders on hand should be at least 30% of projected annual turnover
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SBI SHOPPE
Loan for -purchase of new / old shops / establishment / offices - Modernisation / renovation / face lifting of shops - Expansion /addition /alteration to shops - Dealer‟s showroom - Dealer‟s showroom under tie-up arrangement with the reputed industries (viz. Bajaj, Hindustan Lever, Mahindra) –Constructing Building for Training Centres, Services Centres – Repairs Centre/Garage - Building for Consultant/Chartered Accountants - All furniture/fixtures, electrical fittings and other accessories required for the showroom/offices/shops Repayment - 3 to 7 years excluding a maximum moratorium period of 6 months
SBI Shoppe Plus
It is a combination of Housing Loan & SBI Shoppe Provision of Two Separate Term Loans - First TL for construction of House as per HL Scheme & Second TL for construction of Shop/Office as per SBI Shoppe Separate Documents for Both Term Loans
SBI SMILE
Scheme Launched in Place of Equity Fund Scheme Interest Free Loan to professional and technically qualified entrepreneurs (Doctors including dentists, engineers (diploma and degree holders), management graduates etc ) setting up new Micro and Small enterprises (MSEs) And units covered under the Bank‟s Project Uptech for technology up gradation Entrepreneur must devote his direct and full attention to the unit Should not be involved in any other unit in any capacity - proprietary or administrative Entire borrowings should be confined to the Bank Total project cost should be more than Rs 10 lacs Equity assistance should be in multiples of Rs.1000/- rounded off to the nearest thousand Additional ELA may be considered in case of escalation in project cost during implementation process subject to the above ceilings Assistance - Difference between applicable margin (15%) and capital contributed by entrepreneur including seed capital & subsidy, if any Min Equity Contribution by Entrepreneur – 7.5% of cost of Project Repayment: In 3 yrs after initial moratorium of 5 to 7 yrs
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SME CREDIT PLUS
A clean cash credit facility for Existing SSI Borrower to meet unforeseen expenses such as meeting bulk orders, repairs to machinery, tax payments, any other contingency etc Can be extended to new borrowers also Loan Amount – 20% of aggregate working capital limit (FB+NFB); Max - Rs 25 lacs This facility can be used 12 times in a year There should be a gap of 15 days between the last date of repayment of outstanding and the next withdrawal, Each amount of withdrawal should be repaid within 2 months, No DP is available to cover the outstanding Limit renewed once in a year along with working capital limits
Standby Line Of Credit (WC)
To Existing SSI & C&I units and exporting units to meet genuine contingency needs arising out of bunching of orders, delay in shipment / realization of receivables, sudden increase in raw material costs, mismatch in cash flows, etc Working capital limit by way of cash credit, EPC, bills discounting, against stocks, receivables, etc., as required Loan Amount - 15% of working capital facilities subject to a maximum of Rs 5 Crores Both Fund based and Non-fund based limits within overall SLC (WC) Limit In the case of consortium advances, only our share in the consortium should be reckoned for arriving at the quantum. Rate of Interest one percent higher than that applicable to the Cash Credit Limit. Discretion to waive the additional cost rests with the controller Drawing power should be available to cover the SLC(WC) limit Can be availed any number of times in a calendar year To be repaid within 2 months at any one instance There should be a gap of 15 days between the last date of repayment of outstanding and the next withdrawal Cannot be extended to units who have utilized SME Credit Plus facility Documents should be obtained for the aggregate limits including the SLC (WC) In case of consortium advances, the SLC(WC) should be covered by a separate document and charge Registered with the ROC wherever applicable
Standby Line of Credit (TL)
To Existing C&I and SSI units to meet capital expenditures related to regular business activity – Expansion & modernization, R&D, Installation of captive Power plant & up gradation of technology, renovation of factory/office, acquisition of software, tools etc, purchase of cars & other vehicles, replacement of old machines Loan Amount - 2 times of the residual cash accrual during last year of operation Both Fund based and Non-fund based limits within overall SLC (TL) Limit Sanction obtained along with regular Fund/NF Based WC Separate assessment or special justification not required Validity - 12 months from date of sanction May be sanctioned at each review/renewal of WC based on fresh assessment Common documents; Separate TL document in case of Consortium Repayment - 5 years including moratorium
Open Term Loan (Mfg)
A pre approved open term loan to Existing or new Corporate/ non-corporate customers of SME (manufacturing) segment with ratings SB7 and above. Requests from units rated SB9 and above can be considered selectively, subject to administrative approval of the circle CGM (for sanctions up to the level of CCC –I) Requests from non customers can also be considered subject to their compliance with takeover norms A unique facility, facilitating the customers to negotiate for acquisition of assets, etc. with the comfort of a pre-sanctioned term loan limit Sanction valid for 12 months from the date of sanction. After that unutilized portion lapses. Borrowers free to avail the facility at their convenience Disbursal by Branch on demand from the borrower subject to scrutiny of certain basic financial information Documentation to be obtained upfront for the sanctioned TL At the end of 12th month, branch has to take stock and cancel the unutilized portion of TL Limit Max Repayment period - 3 years. SA may selectively consider it up to 5 years
Open Term Loan (Services)
A pre approved open term loan to Existing or new Corporate/ non-corporate customers of four sector of services only - Hotels, Hospitals, Educational Institutions & Fleet Operators with ratings of SB7 and above Requests from non customers can also be considered subject to their compliance with takeover norms Sanction valid for 12 months from the date of sanction. After that unutilized portion lapses Borrower free to avail facility at their convenience Disbursal by Branch on demand from the borrower subject to scrutiny of certain basic financial information Documentation to be obtained upfront for the sanctioned TL At the end of 12th month, branch has to take stock and cancel the unutilized portion of TL Limit Max Repayment period - 3 years. SA may selectively consider it up to 5 years
SME Construction Equipment Loan
To purchase New Machinery/ Equipments/Vehicles by Firms/Companies engaged in construction or mining activity with a minimum rating of SB-8 Collateral - Hypothecation of other unencumbered equipments or mortgage of property to the extent of at least 25% of the loan amount/Loan may be disbursed in several tranches within a period of maximum one year One tranche should not be less than 10% of the amount of loan Repayment: 2 to 3 years from first disbursement (including moratorium period of maximum 3months). Tenure can be extended upto 4 years on merits of the case. Repayment mode: EMIs Variable repayment program based on cash flow of the company can also be considered if the borrower so desires
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Corporate Loan
Existing corporate and non-corporate customers in C&I and SSI segments with SB7 rating Non customers can also be offered this product after ensuring the creditworthiness and Obtention of opinion report from their bankers Purpose - Repayment of high cost debt, VRS scheme, acquisition of trademarks, patents, shoring up of net working capital, etc Max Repayment period - 3 Years
General Purpose Term Loan (SSI)
Existing SSI Borrowers with CRA rating of SB7(New) and above Should have earned pre-tax profit for last 3 years Should not have no history of default of any kind Purpose - Shoring up of NWC; Capital Expenditure; Substitution of high cost debt; R&D expenses; Quality up gradation to ISO standards Max Repayment Period - 3 Years, extendable up to 5 years in deserving cases
e-VFS(Electronic Vendor Financing Scheme)
Purpose: To finance receivables of Vendors of Reputed Industry Majors (IMs) A dedicated Supply Chain Financing Unit (SCFU) headed by DGM has been established at SMEBU Corporate Centre, Mumbai SCFU (Marketing) is located at SMEBU, Corp Centre, Mumbai SCFU (Operations) is located at Shivsagar Branch Worli, Mumbai CAG/MCG identifies new IMs and ties up with them to finance their vendors Day to day transactions pertaining to e-VFS in the vendors account as well as IMs account will be done only by SFCU (Operations) Branches holding vendors and IMs accounts will only have viewing rights Real Time MIS to both – Industry Majors and Vendors
e-DFS(Electronic Dealer Financing Scheme)
To finance Approved dealers of Industry Majors for their purchases through a web based electronic platform Real time MIS available about the status of dealer‟s account as also for tracking of each invoice
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3.4.3 STATE BANK OF INDIA AGRICULTURE SEGMENT PRODUCTS
State Bank of India is the pioneer and market leaders in Agri-Financing in
India. State Bank Of India cater to the needs of agriculturists and farmers through a
vast network of 10505 rural & semi-urban branches.
Apart from the general branches, SBI has 428 Specialized Agricultural
Development Branches (ADBs) and 18 Agri Commercial Branches (ACBs) for
extension of high value credit to hi-tech agriculture, agri-related Small and Medium
Enterprise, processing industry, etc.
SBI branches cover a whole gamut of agricultural activities from Farm to Fork,
from the land preparation to post harvest management, processing and marketing.
To give special focus to agriculture lending, State Bank Of India has also appointed
agri-specialists in various disciplines to handle projects/ guide farmers in their agri-
ventures. Advances are given to borrowers ranging from very small activities
covering poorest of the poor to hi-tech activities involving large fund outlays.
State Bank of India also has an effective marketing and recovery team in each
region with responsibilities for marketing and building relationships with dealers of
agri-products, organizing promotional events and for loan sanction, processing,
monitoring and recovery.
With a collective effort of Govt. and the people, State Bank Of India has set
forth to catalyses growth in the rural and agri areas and be the Banker to Every
Indian.
The more details of the agriculture segment finance schemes are mentioned here.
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Min/Max Loan Product
Min 3000/- KCC ( 1000/- in Uttaranchal state)
Min 2 lac Scheme for financing seed processors
Min 5 lac & max 1 cr Mortgage loan to seed processing units
Min 25 lac & max 1 cr Scheme for Financing Private Cold Storage/warehouse for on lending to farmers
Max 25,000/- General Credit Card
Max 50,000/- Krishak Uthan Yojna
Max 50,000/- JLG (per farmer)
Max 50,000/- Scheme for Debt swapping of Borrowers
Max 50,000/-(Repairs) Tractor Up gradation Sanjeevani
Max 1 lac (new Implements)
Tractor Up gradation Sanjeevani
Max 2.50 lac Financing of second hand/used Tractor
Max 5 lac Dairy Plus
Max 5 lac Land Purchase scheme
Max 9 lac Broiler Plus
Max 10 lac Produce Marketing Loan
Max 10 lac Kisan Gold Card
Max 10 lac Financing Dairy Societies
Max 20 lac (Individual activities)
Setting up of Agri Clinic & Agri business centre
Max 100 lac (Group activities)
Setting up of Agri Clinic & Agri business centre
Max 50 lac Arthias Plus
Margin Products
NIL KCC/ Krishak Uthan Yojna/ Scheme for financing MFIs/NGOs
10%(min) Financing Power Tiller
10%(investment) KGC
30%(consumption) KGC
10% Dairy Plus
15% SBI Mahindra Vishwash & Tafe Nayaroop
15% Financing Dairy Societies
15%(min) Land Purchase Scheme
15%-25% Financing for Combined Harvester
15%-25% Tractor Up gradation (Sanjeevani) (upto 50000/- Nil)
15%-25%(> 5 lac) Setting up of Agri clinic & Agri business centre (upto 5 lac – Nil)
20% Financing of Organic farming (20% of Project cost- own contribution or subsidy received)
20%-35% Produce Marketing Loan (goods stored in farmers‟ go down) & 40% if against warehouse receipt
25% Broiler Plus
25% Gramin Bhandaran Yojna
25% Financing Cold Storage
30% Agriculture Gold Loan
35% Mortgage Loan to Seed Processing Unit
40% Arthias Plus
40% Scheme for Financing Seed Processors
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REPAYMENT PRODUCT
MAX 6 MTHS Arthias Plus
MAX 12 MTHS Produce Marketing Loan
MAX 36 MTHS(TL) Agri Gold Loan
MAX 3 YRS Scheme for financing MFIs/NGOs
MAX 5 YRS Tractor Up gradation (Sanjeevani)
MAX 5 YRS Bio gas plants (family type)
MAX 5 YRS (GESTATION 6 MTHS)
Dairy Plus
MAX 5 YRS (GESTATION 6 MTHS)
Financing Dairy Societies
MAX 5 YRS (GESTATION 6 MTHS)
Broiler Plus
5 TO 10 YRS (GESTATION 2 YRS)
Setting of Agri clinic & Agri business units
MAX 8 YRS( GESTATION 1 YR) VERMIN CULTURE
Capital Investment Subsidy Scheme for Commercial Production units of Organic inputs
MAX 10 YRS( GESTATION 2 YR) BIO FERTILIZERS UNIT
MAX 9 YRS KGC
MAX 9 YRS (GESTATION 1 YR)
Tractor/Power Tiller/Financing of Combined Harvesters
MAX 9 YRS (FROM THE DATE OF ORIGINAL PURCHASE)
SBI Mahindra Viswas & TAFE Nayaroop
MAX 9-10 YRS Land Purchase Scheme
MAX 9 YRS (GESTATION 2 YRS)
Financing Cold Storage
MAX 9 YRS(GESTATION 3 YRS)
Financing of Organic Farming
MAX 11 YRS(GESTATION 1 YR)
Gramin Bhandaran Yojna
Collateral Security Product
Nil Krishak Uthan Yojna/ Joint Liability group/ General Credit Card
Scheme for financing MFIs/NGOs (guarantee of promoters)
Nil up to 50000/- PML( goods stored at farmers‟ go down)
Nil up to 10 lack PML ( sanctioned against ware house receipt)
Nil up to 1 lack Dairy Plus/ACC/KCC/ATL ( where moveable assets are created or where not created i.e. dug well, development of land etc)
Nil up to 2 lack ACC/KCC (having legal ownership of agricultural land with good repayment track record for last 3 years. And those not covered under ADWDRS 2008 ) / KCC under contract farming
Nil up to 5 lack Setting up of Agri clinic & Agri business centre
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PRODUCT Special Features/ Conditions
1) KISAN CREDIT CARD (KCC)
Farmers to meet their production credit needs (cultivation expenses) besides meeting contingency expenses. Limit is valid for 3 years subject to annual review. The total limit is inclusive of 20% of production credit. Cheque books for literate borrowers having credit limit of Rs. 25,000/- and above. Personal Accident Insurance up to age of 70 yrs to the extent of Rs. 50000 on death/disability. Rs. 25000 on Partial disability. Prem.(for one year) Rs.15 (10-Bank,5-Bor).
2) SBI KRISHAK UTHAN YOJNA
To provide easy access to short term production and consumption credit to meet genuine requirements of tenant farmers, share croppers and oral lessee having no recorded land records or written document. Permanent resident proof of at least 2 yrs. Migratory tillers are not eligible under the scheme. Revolving CC – Annual Review and renewal once in 3 yrs.
3) AGRICULTURE GOLD LOANS
RBI has also reduced the risk weight age on loans up to Rs. one lac against gold and silver ornaments from 125% to 50%. Any person engaged in agriculture or allied activities as well as persons engaged in activities permitted by RBI to be classified under agriculture. Purity of gold can be ascertained by using the following methods. a) Touch stone method b) Nitric Acid method c) Specific gravity method.
4)PRODUCE MARKETING LOAN
To offer the facility of loan against the stocks stored in farm houses, in addition to loan against warehouse receipts. Farmers who have availed crop production loans from the branch or who have availed crop loan from other Bank or who have not availed crop loan from any Bank. Inspection: Loans up to Rs.25000/- once in two months and for loans above Rs. 25,000/- monthly.
5) FARMERS EASY EMPOWERED LOAN (FEEL) “KRISHI KALYAN”
To reduce the multiple process of separate application, documentation & EM creation for availment of KCC and PML, thereby reduce the time for delivery of credit. Facility: Agricultural Cash Credit. Crop Loan amount will be liquidated from Produce Marketing loan sanctioned to the farmer. Produce Marketing Loan to be repaid within a maximum period of 12 months. The borrower should submit stock statements for the stocks at bi- monthly intervals. The scheme will be implemented only in Agri intensive branches (selected by the controllers).
6)GENERAL CREDIT CARD (GCC)
To provide hassle-free credit to our customers based on the assessment of cash flow without insistence on security, purpose or end-use of the credit. Existing customers having satisfactorily conducted deposit accounts including for the last 6 months. Not to be extended to the KCC borrowers. Account will be reviewed every year and renewed after every 3 years. 100% of credit outstanding under GCC up to Rs.25,000/-per account will be treated as indirect agricultural financing (RBI guidelines).
7) ARTHIAS PLUS To finance commission agents against their receivables from farmers. Commission agents enjoying good reputation and holding a valid license from the market yard/ board and are in the line of business for the past 3 years, having receivables from farmers only, functioning in rural and semi urban markets/mandis. Cash credit (Hypothecation of book debts not older than 6 months). Priority sector – Agricultural segment – indirect Agri Finance. Collateral: Equitable Mortgage of Resi / Comm. Property (Non-Agri) with worth 1.5 times of the advance (Up to Rs. 25 lacs); 2 times of the advance value (Above Rs 25 lacs and up to Rs. 50 lacs).
8) KISAN GOLD CARD SCHEME (KGC)
A general-purpose loan meant for meeting credit needs of farmers for productive and consumption purposes. Farmers having good track record of repayment in their ACC/ATL/KCC accounts for the last two years. New borrowers who maintain sizeable deposit with our branches for the last 2 years. Purpose: Investment credit: 80% of the eligible limit can be utilized for creation or purchase of any productive assets other than for i) Purchase of land, ii) Construction of farm house and iii) Purchase of tractor & its accessories. Consumption loans: To meet domestic expenses like education, marriage, medical expenses etc., 20% of the eligible KGC limit. Limit: Five times the annual farm income or 50% of the value of land (to be) mortgaged as collateral security, whichever is less, with a maximum of Rs. 10 lacs minus term loan outstanding if any at the time of application. This is in addition to KCC limit. Maximum number of accounts permissible is five. Treated as ATL accounts.
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9) S H G (SELF HELP GROUPS) CREDIT CARD
Eligibility- Reached third level of credit linkage and enjoying a credit limit of Rs 50000/-.
Good repayment record. At least 2 members should be literates to operate the account. Minimum limit: Rs 50000/- made available as cash credit. Maximum 4 times of the corpus of the SHG. No separate margin required. Hypothecation of the assets is the security. Valid for 3 years.
10) S H G (SELF HELP GROUPS) GOLD CARD
Eligibility same as for SHGCC. Minimum limit Rs 200000/- sanctioned as Term Loan. Issued only for starting / carrying on economic or income generating activities. No separate margin required. Hypothecation of the as-sets is the security. Valid for 3 years.
11)JOINT LIABILITY GROUPS OF TENANT FARMERS (JLG)
To augment flow of credit to tenant farmers cultivating land either as oral lessees or share-croppers and small farmers who do not have proper title of their land holding through formation and financing of JLGs. An informal group compromising preferably 4 to 10 individuals (may be considered up to 20) engaged in similar economic activity like crop production, coming together for purpose of availing bank loan either singly or through group mechanism against mutual guarantee. Purpose of loan: crop production, consumption, marketing and other productive needs. Facility as KCC, ACC or ATL depending on purpose. Mutual guarantee.
12) SCORING MODEL FOR TRACTOR LOANS
To provide finance for purchase of new tractors, accessories and implements. Features: credit score of 56 & above (out of 100) are considered „Good Loans‟ for sanction, credit score of 26 and above but up to 55 may be considered after credit enhancements or to be referred to the next higher authority. But credit score of 25 and below should not be considered for sanction. Upfront fee: Loan amount up to Rs.2,00,000/- : NIL. Above Rs.2,00,000/- : @ 1.25% of the amount
13)FINANCING OF SECOND HAND / USED TRACTORS
SBI - Mahindra Vishwas & SBI TAFE Nayaroop Objectives: To enable farmers with smaller land holdings to mechanize their farms. Individual farmer or a group of farmers not exceeding three in number (as co- borrowers) owning minimum 3 acres of perennially irrigated agricultural. Tractors which are more than 7 years from the original purchase date shall not be financed. Economic use of tractor: Minimum of 600 working hours per annum.
14) FINANCING POWER TILLERS
Farmers or a group of not more than 3 farmers owning 2 acres of land. Farmers owning lesser acerage also become eligible for availing Power tiller loans provided DSCR work out to 1.75 and above. Collateral (up to Rs 50000): Nil. For loans above Rs.50,000 and up to Rs.2.00 lacs : mortgage of land, Value shall be at least 50% of the loan amount. Or One third party guarantee, Or liquid at least 50% of the loan amount. Above Rs 2 lacs: EM of land at least 50% of the loan amount.
15)FINANCING FOR COMBINE HARVESTER
a. For self propelled Combine Harvester: Farmers enjoying high creditworthiness own 8 acres of irrigated land. Minimum DSCR – 1.75. Owning lesser acreage can also avail if DSCR is 1.75 and above and liquid at least 50% of the loan amount (sanctioned by RMs only). b. For Combine Harvesters as an attachment /equipment : : Farmers enjoying high creditworthiness own 6 acres of irrigated land. Minimum DSCR – 1.75 Farmers should own a tractor of not less than 50 HP. Owning lesser acreage can also avail if DSCR is 1.75 and above and liquid at least 50% of the loan amount (sanctioned by RMs only).
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16)TRACTOR UPGRATION (SANJEEVANI)
To assist the farmers, who are regular in their repayments for repairs / maintenance of tractor and for purchase of additional implements. Eligibility: who have already availed the loan facility from our bank before three years or more and whose accounts are closed / or regular/standard (IRAC) and who have paid a minimum of 2 yearly installments or 4 half yearly installments after moratorium period. Tractors older than 9 years should not be considered. No gestation period should be allowed.
17)DAIRY PLUS To finance milk producing members of „AMUL’ pattern societies recognized private milk dairies posting profit in the past two years. Eligibility: Individual member of Amul Type society, age below 65 years with min. Individual Dairy < 10 animals min 0.25 acre land per 5 animals for growing feed & able to procure balance locally, > 10 animals 1 acre own or lease land per 5 animals.
18)SCHEME FOR FINANCING DAIRY SOCIETIES
To provide finance for creating infrastructure like Construction of “milk house or society office”, Purchase of “Automatic milk collection system”, transport vehicles, Bulk chilling unit. Eligibility: Society should have „A‟ grade milk societies – registered & affiliated to district milk union, no adverse remarks in the audit report of previous 2 years, supplying 1000 lit/day to milk union, audited balance sheet for at least previous 2 years, earning pretax profits for the last two years, borrowing powers as per bye-laws of the Society.
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19)BROILER PLUS Extended to both existing farmers and new farmers having “Contract Broiler Farming” arrangements for enabling them to construct poultry shed and feed room and for purchase of equipments. The minimum flock size should be 5000 birds. Copy of Bi-partite agreement between the farmer and the hatchery as per the bank‟s specimen, Letter of undertaking to the Bank by the broiler integrator. WC not needed as it is met by hatcheries. DSCR- 1.40
20)SCHEME FOR FINANCING MFIS/NGOS
To enable the Bank to lend to MFIs (MICRO FINANCE INSTITUTIONS )/NGOs for on lending to SHGs /JLGs/ Individuals and to increase the outreach by financing large number of SHGs in cost effective manner, supplementing the efforts of in financing SHGs. TOL/TNW: Maximum permissible TOL/TNW to be 5. Rating: Loan below Rs 200 lacs – Specific Scoring model – min 60 marks. Loans above Rs. 200 lacs – Rs 500 lacs- Valid Credit Ratings by any Micro Credit Rating Agencies. Loans above Rs. 500 lacs- Rating from RBI approved agencies
21)SCHEME FOR DEBT SWAPPING OF BORROWERS
To extend finance to farmers for paying off loans taken from non institutional lenders (e.g. money lenders etc.) and to enable such farmers in distress, meet their crop production needs. Quantum of loan: The loan granted shall be 100% if the debt is on account of cultivation or Agri activity or Rs.50, 000/- whichever is lower. Simultaneously, the applicant shall be financed Kisan Credit Card which includes additional 20% of the production limit to meet contingent requirements or / and Agriculture Term Loan. The amount of „debt‟ of the farmer is assessed based on the stamped affidavit given by the applicant. Method of assessment: a. Debt being financed will be given as an ATL repayable in 3 to 5 years b. Gross DSCR of 1.75 will be maintained.
22)LAND PURCHASE SCHEME
The borrowers should have a record of prompt repayment of the loan for at least two years. Loan may be considered for: Cost of land. Provision of irrigation facilities & land development (shall not exceed 50% of the cost of land). Purchase of farm equipments. Registration charges & stamp duty. Farmers assisted under the scheme may also be given crop loans (KCC only)
23) financing setting up of agriculture clinic and agriculture business
Persons having technical degree in Agricultural or allied to agriculture like horticulture, animal husbandry, forestry, dairy, veterinary, poultry, pisciculture and other activities. The subsidy would be admissible only in respect of agricultural graduates trained under ACABC scheme on or after 1st April, 2004. Soft loan assistance: 50 % of margin to be contributed by the applicant is provided by NABARD as Soft loan without any interest. Subsidy: composite subsidy @ 36% of total fund outlay (44% in the case of women/ SC/ST candidates from NE and hilly states)
24) GRAMIN BHANDARAN YOJNA
CAPITAL INVESTMENT SUBSIDY SCHEME FOR CONSTRUCTION / RENOVATION OF RURAL GO-DOWNS-Proprietary & Partnership firms Co-operatives, Companies, APMC, Agro Industrial Corpn., NGOs, Group of farmers, SHG Individuals, Market Board etc. Subsidy for renovation/ expan. Of rural go down available only to Co-operatives. Project cost: Assistance under the scheme will be available on capital cost of construction of go downs. God owns exceeding 10,000 tones capacity, the subsidy would be restricted to that admissible for capacity of 10,000 tonnes only.
25) FINANCE FOR COLD STORAGE
Project Cost: An estimated project cost of up to Rs.16.00 crores may be considered. Subsidy: The projects of up to 5000 MT capacity are eligible for capital subsidy of up to 25% of project cost subject to a maximum of Rs.50 lacs and in case of projects in NE States and hilly areas and those belonging to SC/ST, 33.33% of project cost, subject to a maximum of Rs. 60 lacs. Subsidy is provided by National Horticulture Board (NHB), through NABARD as a back-ended subsidy. For loans up to Rs.20 lacs inspections will be conducted by the Officials from the Banks concerned. For loans of above Rs.20 lacs, joint inspection will be conducted as above with NHB officials.
26) SCHEME FOR FINANCING PRIVATE COLD STORAGE STORAGE/PRIVATE WAREHOUSES FOR ON-LENDING TO FARMERS (INDIRECT AGRICULTURE FINANCE )
All private cold storages/warehouses if the promoters are of good repute and Integrity, capacity of the cold storage more than 5000 MT, registered post-tax profits for the last 3 years, all their existing accounts classified as “standard asset”. Limit: Will be equivalent to 60% of the value of their operating capacity or 60% of the average value of produce/commodities stored during the past 12 months whichever is lower. Type of Facility: Clean Cash Credit. Renewal/Repayment: The limit is valid for 12 months and needs to be renewed every year. The cash credit account should be brought into credit balance by the end of November each year.
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27) SCHEME FOR FINANCING SEED PROCESSORS
To extend financial assistance to the seed processors against their receivables due to them from the seed growers. Having valid certificate from Seed Certification Department, Doing business for the last 3 years, having receivables from the farmers, who have posted profits during the past two years of operation. Facility: Agriculture Cash Credit (Hypothecation of receivables not older than 6 months). Loan to be liquidated within a maximum period of 6 months for each crop season i.e., Rabi & kharif. Statement of eligible receivables should be obtained at half yearly intervals.
28)MORTGAGE LOAN TO SEED PROCESSING UNITS
To Provide hassle free finance to Seed Processing Units who are willing to furnish mortgage of property of adequate value. Assessment of Limits: 65% of the realizable value of the property subject to a maximum of 40% of the projected annual turnover. Stock Statement: Only once at the time of execution of documents and as on 28th February every year.
29)CAPITAL INVESTMENT SUBSIDY SCHEME
FOR COMMERCIAL PRODUCTION UNITS OF ORGANIC INPUTS UNDER NATIONAL PROJECT ON ORGANIC FARMING To promote organic farming in the country by making available the organic inputs such as bio-fertilizers, vermicompost and fruit & vegetable waste compost and thereby better return for the produce. TERM LOAN- Owner's contribution 25%, Subsidy from Government of India 25% subject to the maximum ceiling, Bank loan 50%. Subsidy: 25% of the project cost max 1.50 lac for Vermiculture Hatcheries, 20 lac for Bio fertilizers Unit, and 40 lac for Fruit and Vegetable Waste Compost Unit. `
30)FINANCING OF ORGANIC FARMING
To prevent degradation of precious arable land and pollution of water from the abuse of chemical fertilizers/pesticides/insecticides and to capture the branded domestic retail and export market opportunities. Min. 4 acres of irrigated land / 10 acres of dry (rain fed) land. The conversion period from conventional to organic farming is about 3 years. Gross DSCR of 1.75 to be maintained. Subsidy: From National Horticulture Mission (NHM) : @ Rs. 10,000/- per hectare subject to a limit of 4 hectares per beneficiary.
31)BIO GAS PLANTS ( FAMILY TYPE) SCHEME
Individual farmers, including members of JLG / SHGs, owning minimum of 4 animals. Quantum of loan - Loan amount will be the cost of Bio gas plant and installation charges less stipulated margin. Unit costs (ranging approx from Rs 16000 – Rs 20000 for biogas plants of 2 cu mt / 3 cu mt sizes respectively) fixed by the State level Committee for different sizes of biogas plants for different regions should be adopted. The Ministry of New and Renewable Energy is providing subsidy up to 50% of the cost of biogas plants. As per RBI guidelines, margin is waived for limit up to Rs 100000/
32)PRODUCER COMPANIES
Combination of 10 or more individuals and producer institutions (co-operative societies) can get incorporated as „Producer Company‟ under the Act. Maximum members can exceed 50. No cap in membership. Objectives- Production, harvesting, procurement, grading, pooling, handling, marketing, selling, export/import of primary produce etc. Financing Modality: a) Individual members on the guarantee of the Producer Company b) Producer Companies: Lending Powers for on lending to Members. c) Aggregated Finance to Producer Companies: for on lending to Members. As per RBI guidelines, Loans granted to Producer Companies up to an aggregate amount of Rs 1 crore for the following activities is treated as DIRECT FINANCE to Agriculture. # Short Term Loans for raising crops i.e. crop loans # Produce Marketing Loan up to Rs 10 lacs # Working Capital and Term Loans for financing production and Investment requirements for Agriculture and Allied activities. # Loans granted for pre harvest and post harvest activities such as weeding, harvesting, grading, sorting and transporting. One third of loans in excess of Rs one crore in aggregate per borrower for Agriculture & allied activities is also classified as Direct Finance to Agriculture. Remaining two third of loans in excess of Rs one crore in aggregate per borrower for Agriculture and allied activities will be treated as Indirect Finance to Agriculture.
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IMPORTANT CULTURE
Aquaculture Shrimp/Prawn farming
Apriculture Mushroom cultivation
Apiculture Bee keeping
Floriculture Flower production
Horticulture vegetable,fruits,flowers
Olericulture Vegetable production
Moriculture Mulberry cultivation
Pisciculture Fish farming
Sylviculture Forest tree cultivation
Vermiculture Rearing of Earthworm
Sericulture Silk Production
Tissue Culture Plant propagation
REVOLUTIONS
Blue Fish Production
Green Food Production
Red Meat Production
Yellow Oil seeds Productions
Black Rubber Production
Brown Cocoa Production
Rainbow Flower Production
White Milk Production
FARMERS DEFINITION
Small farmer Land holding up to 2.5 acre of wet land or 5 acres of dry land
Marginal farmer Land holding up to 1.25 acre of wet land or 2.5 acres of dry land.
Agricultural laborer Land holding up to 0.5 acre of land or having a home-stead; should have income of more than 50% by way of agricultural wages.
CROPPING SEASON
Season Repayment
Summer (April-JulY) Sept-Oct
Kharif (July- Oct) Dec- Jan
Rabi (Nov-Feb) May-June
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3.5 REFERENCES
1. Www.Statebankofindia.Com
2. The Economic Times 2010
3. Statebankof India Annual Report2010
4. Www.Moneycontrol.Com/“Corporate Social Responsibility” Section Of The
Annual Report For Financial Year 200-10
5. Sbi Annual Report Various Years Mr Arun Kumar Agarwal Has Taken Over
Charge As General Manager At State Bank Of India, Kerala Circle.
6. Sbi Annual Report/M/S Add & Associates,/Sbi Auditor Report Ahmadabad
Circle.
7. Directors’ report Pp,19
8. Management Discussion And Analysis/Economic Backdrop And Banking
Environment Global Economy
9. India’s Economic Growth Is Expected To Improve In The Current Financial
Year 2010.
10. Prime Lending Rate/ Handbook Of Statistics On The Indian Economy, 2002-
03,
11. Policies And Operation The State Bank Of India Ida And Ifc Inidia Dc: Sbi
April 2009pp.37
12. The State Bank Of India Has Project And Operation Which Assess The
Efficecy Of The Completed.
13. Statebank Of India Annual Report-2008-09 and 2009-10
14. Reserve Bank Of India, Annual Report, Various Years
15. Shobana(2009) 49 The State Bank Of India And Economic Developmentoct
14th, 2009 By Shobana.The Formation Of The State Bank Of India Aims At
Promoting Planned Economic Development Of The Country.
16. Financial Express/ Development In The Global Economy Post Recession.
Tuesday, 12 January, 2010 Vmw Blog! Leave A Comment Go To Comments
17. Sbi Times/Product Personal Banking/ Department/Ii/Advances
18. Www.Bankbazar.Com/Sbibankproducts/Home Loan/Others
19. Malhotra, Meenakshi, “Banking Sector Reforms – Experience Of Psbs”,
Abhigyan, Vol. Xvii, No.Ii.
20. Reserve Bank Of India, Annual Report, Various Years
153
21. Statebankof India E-Circuler Various Years
22. Rbi/2006-07/1 Rpcd.Plnfs.Bc. No. 01 /09.04.01/2006-2007 Dated 1july2006
23. Products Of Sbi/ Amended, Up-Dated And Enlarged Edition As On
16.08.2006
24. Deposit & Advances Products Of Sbi – Compiled By G P Srivastava, Chief
Manager, Sbi, Deoghar Branch (0064).
25. Sbicircular Letter No.Circo/Adv/080/2004-05 Dated The 26th July 2004/
Department Of C.C.O.Kolkata L.H.O.
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