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A Report of

A study on the effectiveness of credit management of the Small and

Medium Enterprises and the Marketing Strategies of SBI, Bangalore to

foster the financing of SME.

for

The State Bank Of India, LHO, Bangalore

Submitted to the

Department of Management Studies

in partial fulfillment of the

Post Graduate Diploma In Management

Under the Guidance of

PROF.SREEKUMAR B. PILLAI

by

Nisha Joseph

BATCH 18 FN-103

SCMS COCHIN

SCMS CAMPUS, PRATHAP NAGAR, MUTTOM, ALUVA,COCHIN-06.

September 2010

S C M SS C M SS C M S


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DECLARATION

I, the undersigned, hereby declare that this project report entitled A study on

the effectiveness of credit management of the Small and Medium

Enterprises and the Marketing Strategies of SBI, Bangalore to foster the

financing of SME.has been written and submitted under the guidance of

Prof. Sreekumar B.Pillai and is my original work.

I understand that detection of any copying is liable to be punished in any way

the school deems fit.

DATE: / /2010 NISHA JOSEPH

FN-103


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SCMS COCHIN

SCMS CAMPUS, PRATHAP NAGAR, MUTTOM, ALUVA,

COCHIN-06.

CERTIFICATE

This is to certify that the project work entitled A study on the

effectiveness of credit management of the Small and Medium Enterprises

and the Marketing Strategies of SBI, Bangalore to foster the financing of

SME. has been carried out under my guidance by Ms. Nisha Joseph in

partial fulfillment of her Post Graduate Diploma in Management

during the academic year 2009 - 2011.

DATE: / /2010 Prof.Sreekumar B.Pillai

(Faculty Guide)



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SCMS COCHIN

SCMS CAMPUS, PRATHAP NAGAR, MUTTOM, ALUVA,

COCHIN-06.

This is to certify that the project work entitled A study on the

effectiveness of credit management of the Small and Medium Enterprises

and the Marketing Strategies of SBI, Bangalore to foster the financing of

SME. has been carried out by Ms. Nisha Joseph in partialfulfillment of her Post Graduate Diploma in Management.

DATE: / /2010 Dr. V.Raman Nair

(Director)



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ACKNOWLEDGEMENT

No task is single mans effort. Any job in this world however trivial or tough

cannot be accomplished without the assistance of others. An assignment puts

the knowledge and experience of an individual to litmus test. There is always a

sense of gratitude that one likes to express towards the persons who helped to

change an effort in a success. This is an opportunity to express my indebtness

to people who have helped me to accomplish this task.

I consider it as a proud privilege to extend my greatest sense of gratitude to my

Project Guide Mr. Sumesh S. (Assistant Manager,PBU) for the keen interest,

inspiring guidance, continuous encouragement, valuable suggestions andconstructive criticism throughout the pursuance of this report. I am thankful to

Coordinator sir Mr. Wilfred Sequeria, Chief Manager of learning &

development (L& D) and Mr. Chandrasekhar (Chief Manager, SMECC)

for giving me the valuable support in helping me to gain this opportunity of

being associated with an organization of such esteem.

I am highly indebted to Mr. Srinivasan (Branch Manager,ICICI Bank,

Bangalore) for sparing time from their busy schedule for providing me with

their able guidance at the time of need and helping me to achieve the ultimate

goal of the study. I would also like to thankMr. Sreekumar B.Pillai and other

faculty members who taught me how to do project through appropriate tools

and techniques.I also wish to extend my appreciation to the management andstaff of my college specially our Director Dr. V. Raman Nair and the Project

Coordinator and Dean- Management Studies, Prof. K.J. Paulose, Dean, for

their kind coordination and support.

Last but not the least; it would be unfair if I dont express my indebtness to my

parents and all my friends for their active cooperation which was of great help

during the course of my training project.


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TABLE OF CONTENTS

Sl. No TITLE PAGE NO.

1. Acknowledgement

2. Executive Summary

3. Chapter 1

Introduction andtheoretical background

1-7

4. Chapter 2

Research Methodology 8-105. Chapter 3

Industry Profile Company Profile and

Product Profile

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16-21

6. Chapter 4

Data Analysis andinterpretation

22-66

7. Chapter 5

Findings and Conclusion67-68

8. Chapter 6

Suggestions andRecommendations

69

10. Bibliography 70

11. Annexure 71-77


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LIST OF TABLES

No TITLE PAGE NO

1.1Classification of SMEs in Manufacturing Sector

3

1.2 Classification of SMEs in Service Sector 4

3.1 Highlights from the Balance Sheet for the year 2009-10 18

3.2 Highlights from the Profit and Loss for the year 2009-10 19

3.3 Highlights of Ratios 20

3.4 Products 21

4.1 Education Sector 30

4.2 Manufacturing Sector 32

4.3Comparison between SME plants provided by SBI and ICICI

Bank34

4.4 SME Credit Card 35

4.5 SME Smart Score 38

4.6 Traders Easy Loan 39

4.7 Charges for Retail Internet Banking Customers 65


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LIST OF FIGURES

No TITLE PAGE NO

4.1 Line of Business 43

4.2 Annual Income 44

4.3 Respondents 45

4.4 Product Knowledge Level of Staff 46

4.5 Courtesy of Staff 47

4.6 Speed of Sanctioning of SME Products 48

4.7 Speed of Disbursement 49

4.8 Categories of SME Customers for SME Products 50

4.9 SBI Advertisement Capturing Consumer Attention 51

4.10 Effectiveness of Capturing Customer Attention 52

4.11 Service accepted from SBI 53

4.12 Influence of Availing SME Products 54

4.13 Processing Procedure while availing loan 55

4.14Co- operation of bank employees in Processing and

Documentation56

4.15 Rating of Interest Rate 57

4.16 Customers Opinion on availing another loan 58

4.17 Overall satisfaction with SBI 59

4.18 Ranking of services offered by SBI 60

4.19 Complaint resolution methods offered by SBI 61


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EXECUTIVE SUMMARY

State Bank Of India has contributed to the banking industries in India an

enormous extent. Its mission is to retain itself as the premier Indian financial

services, grouped with world class standards and significant global business

commitment. Excellence in customer, shareholder and employee satisfaction

and to play a leading role in the expanding and diversifying financial service

sector while continuing emphasis on its development banking role is the prime

factor of concern for SBI.

The values of State Bank Of India include excellence in customer satisfaction,

profit orientation, belonging and commitment to the bank, fairness in alldealings and relations, risk taking and innovation.

The topic I have chosen for my project is Effectiveness of credit Management

of SME & marketing strategies of SBI to foster financing of SME as observed

in SBI, Local Head Office, Bangalore. The project has helped in imbibing the

various parameters while granting credit to the customer. On the other hand I

was able to understand the various issues faced by the customer.

The study was done on primary and secondary data. The primary data was

collected by direct interview method with the customer and secondary data was

collected based on annual reports of 2009-2010, loan procedure document,

various catalogues published by State Bank Of India.

The study revealed that the customers of State Bank Of India are satisfied with

the overall service but there could be improvements at the communication

level. The branch can focus more on bridging the gap between the customer

and the bank by keeping the customer informed of the various changes in the

terms and conditions of payment. Mobile banking facility can be seriously

taken upto reduce the communication gap.


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CHAPTER-I

INTRODUCTION & THEORETICAL

BACKGROUND OF THE STUDY


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CHAPTER-II

RESEARCH METHODOLOGY


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CHAPTER-IV

DATA ANALYSIS AND INTERPRETATION


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CHAPTER-V

FINDINGS AND CONCLUSION


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