NewSME PRODUCT GEETAMicrosoft Word Document

STRATEGIC MARKETING

Marketing is now defined in the context of highly complex market conditions, which defy geographical and political boundaries as “A business function that identifies, defines and measures the magnitude of the needs and wants of a target market and decides on appropriate product and services and programmes to serve these markets. Marketing calls upon everyone in the organization to think and serve the customer”.

In order to achieve such a stage of a standardized service of excellent quality at all times it is necessary to put in place an integrated marketing strategy. Marketing Strategies can be either product driven or customer driven.

In the case of product-driven strategy, the direction for the organization to adopt is set by four choices, popularly called the four A’s.These are:

Avenue or market,Advantage that differentiates from the competition,Access i.e. channels used to reach the market andActivities to be performed “Better, Faster, Closer” for success.

On the other hand, customer-driven strategy involves partnering with the customer in order to enhance the rendering of services/products in an improved manner. The form of strategy calls for a bounding with the customer for enhancing the partnering process on an ongoing basis. On the part of the organization, the customer driven strategy will means that the organization should adopt the processes required to drive this strategy which include, quality consciousness, speed, courtesy and competence in dealing with customer request, an innovative and proactive approach with a view to provide best value for price for the customer in an interactive manner and being customer focused at all levels of the organization. These bonding processes are synergistic. The strength of the total process is limited to the weakest link in the process.

The challenge of service marketing, in which the Bank is involved, is distinct from product marketing and people play a much more critical function in service marketing. Service Marketing is characterized by the instant consumption of the service and there is no scope for retracting once the service is rendered. Thus, it is necessary that every instance of service to the customer should be of the highest standard. Thus, a customer-driven strategy is expected to be a more effective marketing strategy for a service organization.

Thus, the Bank’s organization chart in this customer driven process is

Customer

Customer

Junior ManagementMiddle

Management

Junior ManagementMiddle

Management

Senior ManagementTop management

Senior ManagementTop management

M.D ChairmanM.D Chairman

MARKETING IS SATISFYING CUTOMERS PROFITABLTY

CU

ST

OM

ER

CREDIT MARKETING

Marketing has been defined in various ways but essentially, the term “Marketing” refers to the process of ascertaining, identifying, creating and customizing needs of a customer and to deliver satisfaction more effectively and efficiently than the competitor, at a profit on a sustained basis.

Thus, objectives of marketing can be summed up as under:

Maximization of profits Improvement in profitability Improvement in market share Through customer satisfaction On a sustained basis.

How can this objective be achieved in context of our Bank?

Maximization of Profits:Profit will increase with increase in business volumes. Also, increasing the interest spread, that is, the different between cost of deposits and yield on advances will increase profits. To achieve this, it is obvious that we should aim to increase low cost/no cost deposits and increase advances, which yield higher rate of interest at lower risk. Fee based product such as LCs, guarantees, remittances, and govt. business, forex and cross selling will also boost the profit levels.

Improvement in Profitability:A part from volume growth in profits it is essential to ensure that profitability also registers improvement on an on going basis. This is best achieved by adopting efficient and cost effective processes in handing business, which will not only result in customer satisfaction but also reduce transaction costs, thereby improving profitability.

Increase in Market Share:

The concept of market can be defined as: Comprising of “all the potential customers sharing a particular need or want or want and who are willing to engage in exchange to satisfy that need or want” If the objective of

Marketing to increase market share is to be fulfilled, it is necessary to grow at a faster pace than the competition while retaining exiting customer base.

We shall now examine the various critical aspects of Credit Marketing in particular. The foremost principle in marketing credit and credit product is to target such business business, which is of good asset quality and has the potential to generate income for the Bank on an on going basis end also provide a platform for marketing of additional product such as non-fund based facilities, like LCs, BGs, derivatives, remittances, bills, forex, govt. business (excise, service tax, income tax, etc), and so on. In order to achieve these objectives of booking good quality, high value business for substantial income generation for Bank, the operating functionaries should necessarily adopt a two-pronged approach of a sound pre-sanction process of appraised followed by a structured and continuous monitoring and supervision of the asset to ensure a healthy credit portfolio for Bank. The Pre-sanction process will comprise of:

Appraisal of the borrower, group exposure, track record of the unit and its associates.

Appraisal of the environment that is, the industry, the economy, capital market scenario treads.

Financial appraisal, liquidity, profitability trends, solvency, borrower’s stake, finance and management policy, industry, marketing strategy, profitability trends and so on.

How to target good customer for marketing our credit product:

A few should for the operating staff :

Have overall feed of the economy and general awareness of capital, money, and forex markets.

Have general awareness of financial product, which is sought after by customers.

Have knowledge about the immediate environment.

o Market in which one operates.o The major industries/activities in the area of operation.o Major corporate on whom the SSI/SME units in the

vicinity and the local economy is department.o List of good non-customer units.

The operating staff should be aware of the sources, which provide this information. Rapport should be established with the local industry associations, trader associations, District Industries Center, Finance department of large and medium corporate in the area. Newspapers and financial periodicals provide useful leads about the potential customers through the news items; feature and advertisement Electronic media and Internet also provide information, which can be used for marketing of our products. Software packages are also being brought out at regular internals such as Prowess, Cris-infac, and Vans etc. Which provide detailed of various industries and industrial units which can be used very effectively for tracing track of specific industries and industrial units? Financial statements published in the newspaper, VRS announcements, mergers and acquisitions, are some of the other sources of business leads. Even the ads for recruitment of personnel provide useful insights into the functioning of the unit.Based on the knowledge of the potential customer base, short- list of selected potential good customers should be made and should gather

information regarding those short listed customers and their banking needs, especially on the following aspects:

1) General information about the overall conduct of their accounts.2) Detailed of associate concerns3) If the customer is a corporate, gather information regarding:

Corporate history. Composition of Board of Directors. Existing bankers. Audit Reports. Analysis of financial statements. Industry aggregates Various developments in the areas of:

Management Sale of Assets Mergers & Acquisitions Exit Policy I.R. Issues Capital Market Perception Corporate Governance

This information duly updated is available in packages like PROWESS, etc.

STRATEGIC MARKETING

Strategic Marketing will result in a more efficient and effective marketing. It involves differentiation and segmentation for better targeting of product in a focused manner so as to reach the right group of prospective customers. In the context of credit marketing, the market can be classified into the following categories:

Corporate Business SME Business

Retail Business Government Sponsored Schemes.

Of these, SME sector is characterized by:

High Potential Broader Spreads Support to large corporate Not so much price-savvy Reasonable Counseling Expects Counseling

The SME sector is lucrative for the Bank in view of the higher spreads and the scopes for cross selling of other retail products is also high. This business segment is characterized by a large client base thereby spreading the risk-profile over a wider base.

Strategies to be adopted while interacting with the prospective/existing customer:

Some dos and don’ts:

TIME MANAGEMENT Never approach customer without appointment. Appointment should generally be taken in the afternoon

after 3 pm. Purpose of visit (courtesy call or official call) to be

specified Visiting card May not be more than an hour Topic of Discussions should be pre-planned and

structuredICE BREAKING

Introduction Capture issues of common interest

(Music/Support/Culture) Interaction on current important topics Short and sweet. Purpose only to get relaxed

PURPOSE OF VISIT

Use information gathered in a shrewd manner and touch upon supposed or perceived needs of customer.

Provide solutions: Off-the Shelf products Structured product, customized products Importance of counseling

Importance of counseling.Closure & follow-up

Close with assurance If we have to come back, beat the deadline and honor

your commitments. If the deadline has to be extended, please inform the customer well in advance. Importance of response time should always be borne in mind. At no point of time our credibility should be questioned by the customer.

If customer has to come back, please remind after reasonable time. It leaves good impression.

HUMAN VALUE AND ETHICS

VALUE ARE THE MANNER IN WHICH AN INDIVIDUAL TENDS TO MAKE JUGEMENTAND CHOICE FOR ACHIEVING SET GOALS AS ALSO THE MEANS TO BE ADAPTED TOACHIEVE THOSE GOALS. EHICS IS THE SYSTEM OF MORAL CODES AND PHILOSOPHY THAT EXAMINES THE VALUE IN HUMAN BEHAVIOUR.

PRODUCT

SME CREDIT CARD

1. Target group : SSI units, tiny units, village industries, Retail traders, professionals, self- employed, etc.

2. Eligibility : Customer of the following segments with a satisfactory track record for the last two years:-

Small industrial units Small retail traders Professionals Self employee persons Small business enterprises

3. Purpose : To meet any kind of credit requirements4. Type of facilities : Cash Credit and/or Term Loan5. Quantum of

Finance: Maximum-Rs.10 lacs

6. Margin : 20%7. Rate of interest : As applicable to the market segment8. Security:

-Primary

-Collateral

: Hypothecation of stock in trade, receivables, machineryOffice equipmentSSI-No collateral is to be insisted uponSBF—Charge over movable/ improvable property/ third party guarantee

9. Processing fees : As applicable to SSI units10. Replacement : a) The working capital component should be

reviewed every year provided the credit summation is not less than 50% of the projected turnover. If the credit summation is less than 50%, then a replacement schedule should be fixed for the outstanding monthly installment.

b) The Term Loan component should be repayable in a maximum of 5years in suitable installments.

11. Documentation : As per the nature of the facility12. Special features : Assessment: A scoring model has been designed and

those units which score a minimum of 60% qualify under the Scheme for which the assessment will be

made as under:-i. For small business, retail traders etc.,

- 20% of their annual turnover OR- 20% of turnover of the last 12 month in theirtheir accounts, whichever and professionals.

ii. For self- employed and professionals- 50% of gross annual income as declared in

their income tax return.iii. For SSI units

- As Per Nayak Committee norms i.e.,- 20% of annual turnover

Validity The limit will be valid for 3 years but is subject to annual review.

13. Methodology and operating of the account

: The borrower will be issued a photo identity card indicating sanctioned limit and validity of the limit.

Cheque book to be market as SME Credit Card Pass Book to be issued Submission of stock statement is waived but may

be obtained once in the last quarter to meet RBI stipulations

Brief opinion report should recorded

PRODUCT HIGHLIGHTS:-

Small business industries in the tiny sector, retail traders, professional and self employed person, requiring working capital needs are very often unable to provide the elaborate financial data sought by banks from time to time for assessing their credit needs. To obviate this difficulty faced by the small units of a photo identify card and a passbook, which gives details of the limit and validity of the facility. The assessment is based on a simple scoring model and units, which score 60%, or more are eligible for this working capital cum term loan up to RS.10lacs valid for a period of 3 yaers

Marketing Tips:-

This is a very user friendly product for any type of entrepreneur located in urban, semi urban or rural areas.

Small SSI units, retail traders, self-employed professionals, small business enterprises etc., are the ideal target group.

The limit being valid for 3 years for properly conducted accounts is a major plus point of this product.

Stock statements are not required to be submitted except once a year.

SME CREDIT SCORE

1. Target group : Individually managed proprietary/partnership firm or closely held public/private limited companies in the Small and medium industrial and trading sector under C&I and SIB segments

2. Eligibility : The chief promoter/ chief executive should be below 66 years of age.

The applicant must obtain a minimum score of 60% with a minimum of 50% under each sub head of Business and Personal details and a minimum of 10% under collateral details.

3. Purpose : Working Capital needs Acquisition of fixed assets

4. Type of facilities : Cash Credit and/or Term Loan5. Quantum of

Finance:

Rs. 5lacs to below Rs. 25lacs20% of annual turnover for WC loan and 67% of project cost for TL

6. Margin :

25% for working capital component and 33% for TL component.

7. Rate of interest : As applicable to SSI loans up to Rs. 25lacs8. Security:

-Primary

-Collateral

: Hypothecation of stock and assets financed by Bank Office equipmentAs per Bank’s extant norms for WC and TLs

9. Processing fees : As applicable to SSI /SBF/C&I units10. Replacement : 1. WC loan to be reviewed annually.

2. TL not more than 5years excluding moratorium not exceeding 6months

11. Documentation : As applicable to SSI&C&I segment12. Special features : A. A simplified appraisal model (enclosed)

has been developed to standardize the

appraisal process.B. A special application form has been

designed to capture all the required information at one instance.

PRODUCT HIGHLIGHTS:-

The product is designed to avoid delays in credit delivery of retail banking product due to cumbersome assessment processes. A simple scoring model has been designed for which all the data required has to be furnished at one go by way of an application form, which has also been specially designed for this product. Unit, which score a minimum of 60%, are eligibility for this product. This product can be given to units in C&I, SSI and SBF segments for credit requirements between Rs. 5lacs to Rs. 25lacs based on the projected turnover and/ or project cost. The loan quantum should be a minimum of 20% of turnover and/or, 67% of project cost. If a proposal does not fit into this model, it can also be considered on usual Bank’s term on merit.

Marketing tips:

This product is especially useful in Trend advances and small industries.

All SMEs especially those which are individually managed proprietary concerns/ partnerships/private limited companies are the target group.

SME CREDIT PLUS

Target Group

Existing SSI borrowers with excellent track record and have been standard assets for the past two consecutive years and also new borrowers.

Eligibility Units with CRA Rating of SB4 & above and / or standard assets for the past two years

Purpose

For meeting bulk orders

repairs to machinery

Tax payments

Any other contingency Type of facilities Clean Cash Credit Quantum of Finance

20% of aggregate working capital limit subject to a maximum of Rs.25 lacs

Margin Not applicable Rate of Interest At the rates applicable the working capital limits

Security:

- Primary

- Collateral

Nil

Existing collateral to be extended to cover this limit and additional collateral to be obtained only if considered necessary by the sanctioning authority

Processing fees As applicable

Repayment

Each amount of withdrawal should be repaid within 2 months. There should be a gap of 15 days between the last date of repayment of outstandings and the next withdrawal.

Documentation As applicable to clean cash credit. Special features No cheque book to be issued

SBI SHOPPE

Target Group

Present and prospective owners of shops/ offices/ show-rooms/ training centres/ service centres/

garages/ offices for Chartered Accountants / Consultants

Eligibility Individuals /firms / partnerships / trusts / franchisees Purpose Purchase of new / old shops/ establishments /

offices / dealer's showroom etc. Repairs / renovation / modernization

Furniture / fixtures / electrical fittings /accessories for the shop/office etc.

Type of facilities Term Loan Quantum of Finance

Maximum of Rs.20lacs

Margin 25% and 40% for purchase old premises Rate of Interest As applicable to SIB TLs below Rs.25lacs Security:

- Primary

- Collateral

Hypo. / pledge / mortgage / assignment of the assets purchased out of Bank's finance

Processing fees As applicable to SSI / SBF units Repayment 3 to 7 years excluding a maximum moratorium period

of 6 months Documentation As applicable to SSI / SBF Term Loan Special features

No Objection Certificate and No Lien Letter to be invariably obtained from the owner/lessor of the property in the case of rented property

Repayment period should well within the lease period in the case of rented property.

Opening of SB / Current Account is mandatory

DSCR to be minimum 1.75

Property on hire purchase/ lease from govt. departments /PSUs should not be financed

WORKING CAPITAL FINANCE TO T&S SECTOR

Target Group

Retail and wholesale traders in agricultural and industrial commodities, Dealers in consumer durables, consumer goods, vehicles, showrooms, etc.

Eligibility Units in C&I segment established with profits at least in the preceding 3 years with CRA rating of SB4 and above

Purpose Working capital requirements Type of facilities Cash credit limit with a sub-limit for LCs if required Quantum of Finance

15% of projected annual turnover which should not be more than 25 % of the turnover in the previous year subject to a maximum of Rs.5 crores.

Margin 25% Rate of Interest As per credit rating. A concession of 0.50% may be

offered for units with at least 75% collateral coverage Security:

- Primary

- Collateral

Hypothecation of stocks and receivables

Collateral security of at least 50% is to prescribed out of which at least 33% of the limit should be by mortgage of immovable property. The stipulation regarding immovable property can be reduced to 25% in exceptional cases with the administrative clearance from CCC-II.

Processing fees As applicable to C&I units Repayment On demand Documentation As per extant instructions Special features In case the proposal does not fit into this turnover-

based model of credit assessment, the traditional method of projected balance sheet method may be adopted.

FLEXI LOAN FOR TRADE AND SERVICES

Target Group

Wholesale and retail traders in agricultural or industrial commodities

Distributors and stockiest of industrial products, consumer durables, consumables, etc.

Export / import intermediaries

Tourism related facilities-Hotels/resorts/travel agents, etc.

Large transport operators of passenger buses/fleet owners

Construction, transport & supply contractors,

Hospitals, nursing homes, clinical labs, etc., Eligibility

Borrowers with CRA rating of SB4 or SBTL4 and above only are eligible and should have earned cash profits in each of the preceding 3 years and net profit in the last year. Only established traders with proven record of profitability are eligible.

Purpose

The loan can be considered for any general purpose such as

Holding of stocks/book-debts

Acquisition of land and building

Construction/renovation of office/showroom

Purchase of vehicles, equipment, machinery

Shoring up of net working capital Type of facilities Term loan Quantum of Finance

Rs.5lacs to Rs.100 lacs. In the case of extending this term loan for working capital purposes, a limit of upto 15% of the assessed WC limits can be considered for meeting

contingencies, subject to availability of drawing power. Minimum DSCR to be 1.50.CRA –Trade model to be used for limits above Rs.25 lacs.

Margin Minimum 25% of the expenditure Rate of Interest Linked to CRA rating for limits above Rs. 25 lacs. For others,

SBF rates are applicable Security:- Primary - Collateral

Hypothecation of current assets and EM of land and building if acquired from Bank finance

1. Tangible security by way of immovable property, TDRs, NSCs, etc for a minimum of 35% of the loan for those with a satisfactory track record of 3 years. For others, minimum collateral should be 50%.

2. Personal guarantees of promoters/partners/ proprietor Processing fees As applicable to C&I units Repayment In 3 to 5 years This can be extended upto 8 years in deserving

cases. Documentation Composite Term Loan Document for Flexi-loan-2A &2B Special features RBI guidelines on selective credit control will apply

Audited Balance Sheet to be obtained as per extant instructions

Exposures under Multiple Banking Arrangement may be explored selectively to facilitate take-over of quality assets

GENERAL PURPOSE TERM LOAN FOR SSI SECTOR

Target Group Existing SSI borrowers with CRA rating of SB3 and above

Eligibility

Should have earned profits in each of the preceding 3 years

The unit should not have a history of default

The unit should be CRA rated unit with a minimum limit of Rs.25 lacs (as far as possible).

Purpose Any general commercial purpose such as shoring up NWC, substitution of high cost debt, R&D, quality upgradation for ISO certification, etc.

Type of facilities Term Loan Quantum of Finance

Maximum of Rs.50lacs

Margin Minimum of 25% for acquisition of assets, i.e., quantum of loan should be restricted to 75% of project cost.

Rate of Interest As per CRA rating Security:

- Primary

- Collateral

Extension of Hypothecation charge over current and fixed assets

Extension of charge over existing collateral

Ostentation of additional collateral by way of tangible security to be explored

Personal guarantees of proprietor/ partners / promoters to be invariably obtained

Processing fees As applicable to SSI units Repayment In monthly /quarterly instalments normally in 3 years,

extendable up to 5 years in deserving cases. Documentation Specially designed document on the lines of the

Composite Loan Agreement Special features

Term Loan to be disbursed in line with the approved purpose

Loans, deposits, from friends and relatives can be treated as quasi-equity to arrive at TNW subject

to undertaking from them that the amounts will not be withdrawn during the currency of the loan.

DOCTOR PLUS

Target Group Medical practitioners of any discipline, promoters of hospitals and nursing homes, pathological clinics, poly-clinics, X-ray labs, etc.

Eligibility

Individuals/ Partnerships/ Corporates/Trusts

Promoters should be registered practitioners and should possess minimum qualification to practice in a discipline such as MBBS/ BDS / BAMS / GAMS /BHMS

Minimum score of 60% in the scoring model Purpose

To finance qualified medical practitioners

for buying equipment

for setting -up clinic, nursing home, poly-clinic, Path lag, X-ray lab , drug store, purchase of vehicle, ambulance, computers, etc..

for repair/ renovation of clinic / dispensary, etc. Type of facilities MTL and Cash Credit. Clean Cash Credit can be

extended if mortgage of property is not possible in the case of loan given for repair of clinic etc.

Quantum of Finance

Maximum of Rs. 25 lacs of which a sub ceiling for WC limit is Rs3lacs Loans beyond Rs.15lacs in rural areas and beyond Rs.10lacs in metro and urban centres will be classified under C&I segment.

Margin

Upto Rs. 25000/- NIL

Over Rs.25000/- and upto Rs.5 lacs 10%

Over Rs.5 lacs 20% Rate of Interest

Size of loan Below 3 years > 3 years

< = Rs.50000/- 2.25% below SBAR 2.00%below SBAR

> Rs.0.5lac

< = Rs.2 lac 1.75%below SBAR 1.50%below SBAR

> Rs.2lacs

< = Rs.5lacs 1.25%belowSBAR 1.00% below SBAR

> Rs.5lacs

< = Rs.25 lacs 0.75% SBAR 0.50%below SBAR

Security – Primary

- Collateral

Hypothecation of assets financed by the Bank

< = Rs. 5 lacs Not required

< = Rs 10lacs Not required allopathic doctors Processing fees As applicable to SBF units Repayment

Minimum DSCR 1:1.5

Maximum period 5 to 10 years

Moratorium:

Maximum 6 months and 12 months if construction is involved and relaxable to 24 months by one level higher than the sanctioning authority

Documentation A Composite loan document drafted for the purpose Special features The assessment will be based on a simplified scoring

model . Minimum score to be eligible for the loan is 60%.

DOCTOR (+) PLUS

CREDIT SCORING MODEL

Name of the Company/Firm _________________________

Name of the Chief Promoter _________________________

(i) Personal details of Chief Promoter:

S. No.

Parameter Criteria Marks Max. Marks

Marks scored

1. Owning house Own

Owning a house with mortgage

Not owning

3

2

0

3

2. Academic qualification (in medical field)

Super Specialist

P.Graduate/Addl. Qualification

Graduate

5

4

3

5

3. Experience/Practicing More than 10 yrs

5 – 10 years

6

4

6

3 – 5 years

less than 3 years

3

2

4. Spouse Details Medical Practitioner

Employed

Not employed

2

1

0

2

5. Assessed for income tax Assessed

Not assessed

2 0

2

6. Loyalty (Deposit/advance dealing with SBI, SBI Cards

More than 5 years

3 – 5 years

1 – 3 years

for one year

5

3

2

1

5

7. Has Life Insurance Policy Yes

No

2 0

2

Total 25

PARYATAN PLUS

Target Group: All segments of tourism, viz., Hospitality Industry Transportation Travel agents Tour operators Adventure tourism Religious tourism

Eligibility: Individuals, partnerships, corporates, trustsPurpose Construction / renovation / modernisation / expansion to Hotels /

Yatri Nivas / Dharamshalas, etc. Construction of office premises/purchase of office furniture and

computers etc., by travel agents/tour operators Purchase of luxury buses/ coaches ,cars, vans etc., at tourist sites Purchase of house boats/ luxury boats Setting up of restaurants/coffee houses/ ice-cream parlours etc. Amusement parks / Ropeways Health clubs / Spas Type of facilities :CC (Hypo) , TL , LCs, BGsQuantum of Finance : Minimum Rs.2lacsMargin- 20% [40% for purchase of old vehicles of less than 5 years]Rate of Interest As per C&I / SBF rates as the case maybePrimary Security : Hypothecation of assets financed by the BankCollateral Security :Tangible Collateral of immovable property or TDRs, NSCs, KVPs,, etc for at least 50% of the loan amount Processing fees: As applicable to C&I / SBF unitsRepayment: TL 3 to 7 years including start up period not exceeding 18 monthsCC Repayable on demandDocumentation: As applicable to SBF / C&I AdvancesSpecial features Maintenance of Current Account to route all receipts is mandatory DSCR - minimum 1.5 in case of vehicles Appropriate licenses to be obtained

Only skilled / trained persons eligible Audited financials are desirable Take over of loans permissible subject to take - over norms For tourism related activities, WC limit over Rs.20 lacs or Advance

for purchase of more than 10 vehicles under this scheme must be classified under C&I segment and should be treated as such for all purposes.

Luxury coaches up to 10 vehicles can be financed under Transport Operators Scheme

TRANSPORT PLUS

Target Group

Fleet operators owning more than 10 trucks /tankers / tippers / luxury buses etc. (surface transport operators) generally operating on contract basis with govt. departments/ corporates, etc.

Eligibility

Transport operators holding valid route permits and willing to exclusively bank with us.

The promoters/CEO should be IT assesses. The Regd./ admn. office should be in a metro/

urban/ semi-urban centre The promoter/ CEO should be more than 18 years

of age, should own a house, should have experience of more than 5 years in the field, and should have an annual income of Rs.2lacs as per IT assessment in the previous year.

Dealings with their bankers should have been satisfactory.

Should be reputed and IBA approved in the case of trucks.

Their operations should be fully computerised Should record a rising trend in income and profits

in the last two years. Should own more than 10 well maintained vehicles

not more than 10 years old of which at least 50% should be unencumbered

Should have had dealings with banks /FIs for at least 3 years.

Should have a receivable level of within 3 months Value of orders on hand should be at least 30% of

projected annual turnover. Should be major sub-contractors or direct

contractors with tie up arrangements with large corporates

Purpose To finance purchase of new transport vehicles including

take over of existing loans subject to fulfillment of takeover norms and WC finance against receivables

Type of facilities TL and Cash CreditQuantum of Finance

Corporates Non Corporate TL Rs.15lacs to Rs.7.50crs Rs.15lacs to Rs.4.00crsCC Rs.10lacs to Rs.10crs. Rs.10lacs to Rs.7.50crs

Margin TL & CC 20%Rate of Interest

TL 0.75% over SBAR floating with monthly restsCC 0.50 % over SBAR with monthly rests

Security:- Primary

- Collateral

Hypothecation of vehicles financed and receivables Other unencumbered vehicles / immovable property for a value of not less than 50% of loan amount which can be reduced to 25% if 100% tie up arrangements are in place

Processing fees As applicable to C&I unitsRepayment

TL – Maximum of 5 years IN EMIs. PDCs to be obtainedCC - Repayable on demand and renewable annually

Documentation Revised C&I documents C1.C2,C3,C4 & C5Special features

Current Ratio minimum 1.33 TOL/TNW maximum 2.75 Average gross DSCR Minimum 2.00 Debt / Equity Maximum 2 :1 Promoter's contribution minimum 20% Prepayment of 1% p.a. for the amount prepaid

and for the residual period

CYBER PLUS

Target Group

.Educated youth with basic computer knowledge especially in rural and semi-urban centres. Women entrepreneurs are to be given preference

Eligibility

Educational qualifications –minimum SSC or 10thstd. passed

Age –between 18 and 45 years of age

Should possess basic computer knowledge Purpose To set up Internet/ Cyber cafes especially at rural and

semi- urban centres with potential for such a facility Type of facilities Composite Loan Quantum of Finance

Rs.50000/-

Margin Rs.9000/- Rate of Interest 0.75%below SBAR Security:

- Primary

- Collateral

Hypothecation of the assets purchased from Bank finance

NIL

Can be brought under CGTSI scheme Processing fees Waived Repayment 36 to 40 monthly instalments Documentation Composite Loan Agreement Special features

N-Logue, a non profit organisation comprising of specialists from IIT Chennai has designed the "CHIRAAG” kiosk to be located at rural centres to provide e-governance and has entered into agreements with various agencies to enable these kiosks to provide communication, education, information about agriculture, health and other services.

The role of n-Logue is as under:-

To identify, select and train the operators

To provide logistic support and marketing

Installation of equipment

Provide internet connection

Identifying usages and services

To provide maintenance and insurance

To interact with govt. departments to introduce and enhance the scope of e-governance

To monitor the assets and undertake marketing of kiosk services

To offer minimum buy back guarantee for the assets

The scheme is presently introduced in Chennai, Mumbai, Hyderabad , Bangalore and Ahmedabad Circles.

The total project will be around Rs.59000/-for purchase of PC, monitor, CorDET wireless system, UPS, printer, Internet registration, software, furniture, etc.

SWAROJGAR CREDIT CARD

Target Group Self employed persons such as rickshaw owners, fisherman, handloom weavers, service sector for example, TV mechanics, and other micro-entrepreneurs, and SHGs.

Eligibility Individuals or group of individuals engaged in any viable micro-enterprise. SHGs can also be provided with this facility jointly with the entrepreneur.

Purpose For meeting the investment needs as well as the working capital requirements of self –employed persons

Type of facilities

Composite Loan which comprises of a Term Loan and a revolving Cash Credit account. The borrower can avail the entire component as a TL or for working capital only as per the actual requirement,

Quantum of Finance

Rs. 25000/- per borrower as composite loan . This can be increased to Rs.30000/- in deserving cases. The initial investment in fixed assets and/or working capital requirement /recurring expenditure are to be taken as the basis for fixing the limit. The cash credit limit should be fixed based on the operating cycle to the extent of the available balance after fixing the TL component A component not exceeding 20% of limit can be can be built in for consumption purposes in view of the family's contribution in the productive activity.

Margin NIL Rate of Interest As applicable under SIB segment Security:

- Primary

- Collateral

Assets acquired from Bank finance

NIL

Processing fees Waived Repayment

TL is repayable in 5 years in suitable instalments

Cash credit limit should be normally repaid in 12 months and renewed annually based on the conduct of

the account and repayment of the Term Loan. If the CC account remains continuously irregular for 90 days or remains outstanding for 12 months, no further debits should be permitted.

Documentation Composite Loan document Special features

The facility should be covered under the Group Insurance Scheme and the cost borne by the Bank and the borrower equally

BMs have absolute freedom to select the borrowers for this product and there is government subsidy for this scheme

Withdrawal from the account will be through a withdrawal slip or cheque.

The SCC holder can be permitted to open a Savings bank account.

Methodology and Operation of the account

The borrowers will be issued a laminated credit card and a passbook.

This will serve as an identity card and will record the transactions on an ongoing basis.

The passbook will contain the repayment schedule of the term loan also.

A passport size photograph of the borrower will be affixed on the credit card and the borrower will have to produce both the credit card and the passbook for withdrawal from the account.

Self Help Groups (SHGs) can also be issued these cards and each member of the Group will be jointly and severally liable for the amount.

As far as possible cluster approach should be adopted for this product.

ARTISAN CREDIT CARD

Target Group Artisans in the handicrafts sector and NOT covered by the government sponsored loan schemes.

Eligibility

Minimum score of 60% under the simplified scoring model

Preference to be given to artisans registered with the Development Commissioner (Handicrafts)

Thrust to be to finance in clusters and preferably those supported by a Self Help Group (SHG)

Existing borrowers with limits upto Rs.2 lacs and satisfactory track record are also eligible.

Purpose For working capital requirements as well as cost of tools and equipment required for carrying out the manufacturing process.

Type of facilities A cash credit limit supported by a photo card which indicates the limit and validity and a passbook

Quantum of Finance

Maximum of Rs.2 lacs. Assessment to be made under Nayak Committee norms and will be based on the simplified Scoring Model. The minimum score to be obtained for being eligible for finance is 60%

Margin

Upto Rs. 25000/- NIL Over Rs.25000/- and upto Rs.2 lacs 20%

Rate of Interest Upto 50000/- 1.75% below SBAR over Rs.50000/- 0.75% below SBAR

Security:

- Primary

- Collateral

Hypothecation of assets financed by the Bank

NIL

Processing fees As applicable to SSI segment but no fees to be charged for review/renewal.

Repayment The portion of limit used for purchase of tools, etc.

may be made repayable in 3years. The rest of the limit will be a revolving cash credit limit to be reviewed every year but valid for 3 years subject to satisfactory conduct of account.

Documentation Composite Loan Agreement Special features

New units can also be financed Beneficiaries registered with the Development

Commissioner (Handicrafts) will be eligible for insurance cover under group guarantee scheme for which the premium will be paid by the government and the beneficiaries in the ratio 60:40

Methodology and Operation of the account

The beneficiaries of the scheme will be issued a photo ID card which contain name, limit and validity of the facility. A passbook will also be issued which will contain all details of the beneficiary including address, and all transactions will be recorded in it on an ongoing basis.

SEMFEX II

Target Group Ex-servicemen, widows of servicemen. disable servicemenEligibility Individual or association of not more than 6 members.Purpose

To purchase utility vehicles, LCVs, Commander 650,Major (CL-500) and Savari Rang and pick ups such as single cabs and double cabs manufactured by Mahindra & Mahindra.

Type of facilities Term LoanQuantum of Finance

As per assessment. Not more than 10 vehicles should be owned by the borrower including the vehicles to be financed. Gross DSCR should be Minimum 1.75%

Margin 20%Rate of Interest

For loans below Rs.50000/-1.75% below SBAR for TLs repayable within 3 years1.25% for TLs repayable in 3years to 7 years.For loans over Rs.50000/-0.75% below SBAR for TLs repayable within 3 years0.25% for TLs repayable in 3years and over.

Security:- Primary

- Collateral

Hypothecation charge to be registered with RTA. mortgage of immovable / movable property to cover 50%of the loan amount and / or third party guarantee

Processing fees WaivedRepayment

Within 3 to 7 years with a moratorium of 6 months. Longer repayment period may be fixed based on the gross DSCR in each case.

Documentation As per Term Loans in SBF segmentSpecial features Subvention amount of Rs.1000/- is available per vehicle

for 1 yearMethodology and Operation of the account

M&M dealers will obtain applications and after due diligence will forward them to the Bank for appraisal and sanction if found acceptable in all respects.

RICE MILLS PLUS

1. Target Group

: Rice Mills with proven track record

2. Eligibility

: a) Profit making existing units with CRA rating of SB4 and above

b) Take-over of units conforming to takeover norms is also permitted

3. Purpose

: a) Acquisition of machinery/factory building for modernization

b) Working capital needs

4. Type of facilities

: Term Loan, Cash Credit, outward bill limit, LCs , BGs, SME Credit Plus

5. Quantum of Finance

: No upper Ceiling. Nayak Committee norms are applicable: minimum of 20% of projected annual turnover. A higher limit can be considered selectively on projected balance sheet method. Peak and non peak limits can be fixed depending on actual need.

Separate limits for other activities:-

Wherever the borrowers are engaged in other activities, separate limits may be

considered based on viability and other aspects of assessment and appraisal.

6. Margin

: Term Loan – 15-25%

Working Capital –

Stocks :-

Paddy &Rice - 15%-20%

Brokens - 20%

Bran - 30%

Gunny bags - 40%

Book debts-

40%(cover period – max.60days)

Margin for book debts can be lowered upto 25% where adequate collateral is available.

7. Rate of Interest

: CRA Rating Interest rates

SB1

1% below SBAR minimum 9.25% p.a.

SB2

1% below SBAR minimum 9.25% p.a.

SB3

0.75% below SBAR minimum 9.50% p.a.

SB4

@ SBAR minimum10.25% p.a.

Limits Rs.2 to Rs.25lacs

@ SBAR minimum 0.25% pa

For Term Loans

SBTL 1

0.50% below SBAR

minimum 9.75% p.a.

SBTL 2

0.50% below SBAR

minimum 9.75% p.a

SBTL3

0.25% below SBAR

minimum 10% p.a

SBTL 4

0.50% above SBAR minimum 10.75%pa

For units with limits of above Rs.2 lacs to Rs.25 lacs

0.50% above SBAR minimum 10.75%pa

8. Security: : Hypothecation/pledge of assets created out of Bank finance

- Primary

- Collateral

For loans upto Rs.5lacs-NIL,Others-Tangible security of borrower or guarantor a value of not less than 75% of loan amount

9. Processing fees

Rs.115/- per 1 lac

Upfront fee for term loans 0.60% of the loan amount

Issuance of drafts/ BCs/ cheque collection – 50% of applicable charges.

10. Repayment

: TL – 5 to 7 years excluding the gestation period of maximum 12 months

11. Documentation

: As applicable to SSI units

RICE MILLS PLUS

CREDIT RATING SYSTEM

S.No. Parameters Score

1. Current Ratio >=1.15

>=1.13 <1.15

>=1.10 <1.13

>=1.05 <1.10

<1.05

15

12

8

5

0 2. TOL/TNW Ratio <=2.50

>=2.50 <3.50

>=3.50 <5.00

>=5.00 <6.00

>6.01

10

8

6

4

2 3. Gross average DSCR for all

loans inclusive of the proposed term loan

>=2

<2.00 >=1.75

<1.75 >=1.50

<1.50

10

7

5

2 4. Interest and installment

obligation of cash credit and term loan(s)

Timely repayment on due date

Delayed payment upto 30 days

Over 90 days

10

5

0

5. Total sales : Inventory + sundry debtors

>= 4 times

>=3times <4 times

>=2 times <3 times

>2 times

10

8

4

2 6. Submission of stock

statements, balance sheets, renewal data

Timely submission One month delay Irregular in

5

3

submission 1 7. Achievement of projected

sales >=85%

< 75% >=50%

<50% >=25%

<25%

5

4

3

0 8. Supported by tangible

collateral security including 2nd change on fixed assets

Security coverage to total loan

>=100%

>=50% <100%

>=25% <50%

<=25%

10

8

4

2

9. Operational experience in cash credit

Liability not exceeding DP / Limit

Liability exceeded limit occasionally. Excess drawal adjusted in stipulated time.

Liability exceeded frequently and adjusted with some delay.

10

5

3

10. Compliance with terms and conditions of sanction

Complied with promptly

Complied with delay Not complied with

5

3

0

ARTHIAS PLUS

Target Group

Commission agents (Arthias) of agricultural produce who are registered with the Market Committee and possess a license issued by the District Food and Supplier Department to sell the produce of the farmers.

Eligibility

Commission agents enjoying good reputation and who have been in this business for at least the past 3 years and holding a valid license to carry on his activity.

Commission agents having receivables from farmers only.

Purpose To finance commission agents against receivables from farmers.

Type of facilities Cash Credit ( Hypothecation of book debts not more than 6 months old)

Quantum of Finance

Maximum Rs.25 lacs

Margin 40% Classification Indirect AGL. (R/SU Brs.)

In U/M Brs, to be classified under SBF Segment (up to Rs. 10 lacs) and under C&I Segment (above Rs. 10 lacs)

Rate of Interest

AGL/SBF Segment

0.5% below SBAR for limits below Rs.2lacs

At SBAR for limits of Rs 2lacs and upto Rs.10lacs

Under C&I segment (Above Rs.10lacs & upto Rs.25lacs)

1.10% to 2.50% above SBAR based on CRA Rating Security:

- Primary

- Collateral

Hypothecation of receivables and movable assets if any

EM of non-agricultural property, either residential or commercial belonging to the borrower or guarantor for 1.5 times the loan amount.

Processing fees As applicable to the segment Repayment To be liquidated within 6 months and to be renewed

annually Documentation As per SBF or C&I Trade advances Special features

A statement of eligible receivables should be obtained from the borrower and verified with books of account or audited financial statements.

At the end of every cropping and marketing season, the borrower should liquidate the out standings fully

The limit should thereafter be subject to review/ renewal as per trade advance norms.

ESSENTIALS OF DOCUMENTATION

1 The main purpose of obtaining documents is to secure the advances and enable the Bank to recover the dues through legal means when all

other recourses fail. Documentation process attempts to ensure the following:

a) The owing of the debt to the Bank by the Borrower is clearly established by the documents.

b) The charge created on the Borrower’s assets as security for the debt is maintainable and enforceable.

c) The Bank’s right to enforce the recovery of the debt through a court of law is not allowed to become time-barred under the law of limitation.

1.2 Documentation assumes special significance in the following instances:

a) At times, the Bank has to prove its claim against the legal representatives, official receiver / liquidator, etc.

b) The Bank may have to prove its prior charge in respect of assets charged to the Bank against the claims by Government Departments, other creditors, etc.

c) It is not uncommon to observe that the Borrower, who is very co-operative at the time of availing the credit facilities and is ready to sign on dotted lines, ceases to cooperate once the account turns bad.

1.3 As documents form the primary evidence in any dispute between the Bank and the Borrower, it is imperative that they are correct and valid at all

times. Documentation, therefore, is a continuous and on-going process covering the entire period of advance.

DOCUMENTATION

(Law and Procedure)

1.4 General

The Loan / security documents are of crucial importance to the Bank in respect of all loans and advances as they constitute the primary evidence in any legal proceedings between the Bank and the Borrower(s) / Guarantor(s). They establish the precise jural relationship between the Bank and the Borrower(s) / Guarantor(s). In the absence of properly executed documents, it may be very difficult for the Bank to succeed in any suit filed in a Court of Law for enforcing its rights under the documents. The legal protection and judicial adjudication always requires and depends upon valid documents.

1.4.1 Object

The object of documentation is to serve as primary evidence for enforcing the Bank’s right to recover the contracted debt through Court of Law in the event of all other recourses proving to be of no avail. Documentation will succeed in fulfilling this objective only when the following requirements are met (1) the owing of the debt to the Bank by the Borrower is established by documents (2) the charge created on the Borrower's assets as security for the debt is preserved, protected, perfected and maintained in accordance with the law and (3) the Bank’s right to enforce the security for recovery of the debt through Court of Law is not barred by expiry of limitation under the Law of Limitation.

1.4.2 Purpose

The purpose of the document is to help in identifying the parties, the nature and extent of security, for providing evidence of the

transactions, for settling / crystallizing the terms and conditions, for defining the rights and liabilities of parties or under the securities, for creating the charges / encumbrances, for protecting the priority of charges, for computing the period of limitation and lastly for enforcing the rights under the documents.

INTRODUCTION of SBI

The State Bank India has an unbroken traditional of more than 199 years of banking. In fact, the 200th anniversary celebrations commenced in

JUNE 2005. Its history is traced back to the Bank of Calcutta (1806), which received its charter as Bank of Bengal in 1809. There were two other Banks, Bank Of Bombay(1840) and Bank of Madras(1843) . These three banks were known as Presidency Bank.

The Presidency Banks were authorized to conduct Government business and also issue currency notes.

1921:- The Three Presidency Banks amalgamated to form the Imperial Bank of India (70 branches.) in 1921. The Imperial Bank was conducting government business exclusively.

RBI was established only in 1935 pursuant to the recommendations of the HILTON YOUNG COMMISSION. After the formation of RBI, the Imperial Bank acts as its agent in doing government business and in maintaining currency chest and small coin depot. RBI was first established as a Private Bank in 1935 and nationalized later in 1949

1-7-1955:- The All India Rural Credit Survey Committee (Gorwala Committee) recommended the formation of State Bank of India. According, SBI as formed as a state partnered and sponsored bank. The S.B.I was formed under the State Bank of India Act 1955. The S.B.I was established with the objective of taking banking to the interior and remote parts of India

Later under the State Bank of India (Subsidiary Bank) Act, the former state-associated banks were taken over by the S.B.I as its subsidiaries (currently designated as Associated Banks.)

The Bank’s registered office in kolkata. The Corporate Centre (formally called Central office) is in Mumbai. The central Accounts Office is in kolkata. In terms of SBI Act, RBI should hold a minimum of 55% of the capital of Bank. The central office is now redesigned as Corporate Centre to reflect the fact that it is apex office of the Bank; it is also in tune with the modern business practice.Presently there are 7 Associate Bank and one Banking Subsidiary, SBI Commercial and International bank Ltd. The other important particular of the Bank are (2004-2005)

No. of Branches/Offices 9102(March 2005(domestic); Total:9156

No. of employee 2,07,039(March 2004) Total assets Rs.4,59,883Cr. Total Income Rs.39,548 Cr. Total Expenditure Rs.35,243 Cr. Net Profit Rs.4,304 Cr. Earning per share Rs.81.79 Return on Average Assets 0.99% Return on equity 18.10% Profit per employee(000) 207.50% Expenses to Income 49.18% Div. Declared 125% Capital Adequacy 12.45% Net NPA/Net Advances 3.48%(dec. from 4.50% in 2000-2003) Deposits Rs.3,67,048 Cr Advances Rs.2,02,374 Cr

SBI’S Organization Structure:-The Bank has been making periodical changes in its structure, system etc in tune with environmental demands. The 1972 and 1979 Re-organization and McKinsey restructuring (1994) have been indicated in the annexure to this part.

ASummer Training

REPORT

ON

MARKETING OF SMALL & MEDIUM &

ENTERPRISES LOANS PRODUCTS

CONDUCTED

AT

STATE BANK OF INDIA, Y.N.R.

Submitted to Punjab Technical University, Jallandhar

(In the Partial of the requirement for the degree of Master of Business Administrator)

Session 2009-10

Under the Guidance of: - Submitted By: Geeta Rani

University Roll. No. 9203040035 M.B.A. 4th Sem

HARYANA INSTITUTE OF INFORMATION TECHNOLOGY

Introduction of SBI

Contents

Products

Elements of Documentation

Suggestion

Conclusion

Declaration

Acknowledgment

Introduction

Preface

SUGGESTIONS

State Bank of India is the Number one amongst the nationalized banks and the second largest pubic sector bank in the country.

The Bank needs to look at its advertising operations. In today’s environment advertising is the media to reach the public faster. The bank should adopt more strategic audit its advertising media.

It can also offer some discount in its processing fee and other charges to exiting customer of SBI as relationship discounts. This will create goodwill of the bank amongst its customers.

The bank should reduce its processing time that it requires for the loan.

LIMITATION

1. The study was to be completed in a short time; the time factor puts a considerable limit on the scope and the extensiveness of the study.

2. Also many execution, officers and agents could not spare much time answer queries, so many questions had to be either eliminated or edited to arrive at the conclusion.

3. Due to the limitation of time, area and other factors survey and analysis is limited.

CONCLUSION

After completing this project, we can conclude that any organization that wants to lead the market has to adopt some customer-centered strategies. State Bank Of India is playing full attention to customer care and is providing good services to its customers

Since it inception it has maintained a consistent and healthy growth in its operation. The Bank has also a wide array of retail financing including Advance against to Trader and Advance against Gold/Silver/Jewellery/Ornaments. The formalities which have to be fulfilled by the consumer in getting loan are litter bit complex.

Backed by world-class service it has various delivery channels ATM’s net banking. The bank is also reporting high level of profitability in recent years

With this entire Bank is to emerge world-class Indian banks. We wish the SBI good luck in pursuing further in its endeavors

HIGHLIGHTS OF ANNUAL REPORT-2006-07

Compiled by: Vinay KumarManager (Credit Processing Cell)Zonal Office, Ranchi, Jharkhand

[email protected]

(Rs. in Crore)2006-07 2005-06 % CHANGE

TOTAL INCOME 45260 43415 4.25TOTAL EXPENDITURE 40719 39008 4.39NET PROFIT 4541 4407 3.04EARNING PER SHARE (Rs) 86.29 83.73 3.06RETURN ON AVG. ASSET% 0.84 0.89 -(5.26)RETURN ON EQUITY % 14.24 15.47% -(7.59)EXPENSES TO INCOME% 54.18 58.70PROFIT PER EMPLOYEE (IN THOUSAND)

236.81 216.76 9.25

PAIDUP CAPITAL & RESERVE

31298 27644 13.22

DEPOSITS 435521 380046 14.60ADVANCES 337336 261801 28.85NO. OF DOMESTIC BRANCH 9517 9177 3.70NO. OF FOREIGN OFFICES 83 70 18.57CAPITAL ADEQUACY 12.34% 11.88% 3.87 a.Tier-I 8.01 9.36 b. Tier-II 4.33 2.52NET NPA 1.56% 1.88% -(17.02)

mailto:[email protected]

Analysis and Interpretation

SBI Condensed Annual Report for The Last 3 Years

BUSINESS 31.03.2004 31.03.2005 31.03.2006

Global Deposits 318619 367048 380046

Of which – Domestic Deposits 309798 352799 366229

Global Advances 157934 202374 261642

Of which – Domestic Advances 142026 178475 234696

Global Investments 185676 197098 162534

Of which – Domestic Investments 181684 192456 157286

CD Ratio (on Net Bank Credit)54.03 60.19 Not Available

Net Profit 3681 4304.52 4406.67

Total Income 38073 39548 43184

Total Expenditure 34392 35243 38777

CAPITAL STRUCTURE

Capital 526.3 526.3 526.3

Reserves and Surplus 19705 23546 27118

Capital Adequacy (%) 13.53 12.45 11.88

- Tier I 8.34 8.04 9.36

- Tier II 5.19 4.41 2.52

Profitability

Interest Income 30460 32428 35795

Non Interest Income 7612 7120 7389

Interest Expenses 19274 18483 20159

Operating Expenses 9245 10074 11725

Provisions & Contingencies (Net) 5872 6686 6893

Of which provision for NPAs 3703 1204 148

ROE (%) 18.19 18.10 15.47

Dividend (%) 110 125 140

Cost of Deposits (%) 5.48 4.70 4.49

Yield on Advances (%) domestic 8.17 7.68 7.78

Net Interest Margin (NIM) (%) 3.04 3.39 3.40

Operating Expenses/Total Income Ratio 24.28 25.47 27

EPS (for Rs.10 share) in Rs. 69.94 81.79 83.73

SBI ANNUAL RESULTS(CONTD)

(Rs. in Crores)

BUSINESS 31.03.2004 31.03.2005 31.03.2006

NPAs as % of Total advances7.75 5.96 3.88

Net NPAs as % of Net Advances 3.48 2.651.87

Balance Sheet Total assets407815 459883

493870

Return on average assets%0.94 0.99

0.89

Business per employee 2.11 2.43

2.99

Profit per employee (net) (Rs in lacs)1.77 2.07

2.17

RBI shareholding (%)59.73 59.73

59.73

Market Share of Aggregate Deposits 18.72 18.23 16.25

Market share of Total Advances 16.76 16.33

16

Branches9039 9102

9177

No. of Overseas Brs/Offices in No. of Countries54-28 54-28

70-30

No. of ATMs installed3814 5000

5572

No. of Branches having Internet banking1110 2225

3482

No. of employees 207039 205515

198774

Of which – Officers (%)28.71 29.32

29.51

- Clerical Staff (%)46.17 45.65

45.19

- Sub-Staff (%)25.12 25.03

25.30

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• Click to edit Master text styles– Second level

• Third level– Fourth level

» Fifth level

Org stru cture - zoJanuary, 2005

ORGANISATIONAL CHARTS

Organisational Planning DepartmentState Bank of IndiaCorporate Centre

Mumbai.

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2Org stru cture-c cJanuary, 2006

ORGANISATIONAL STRUCTUREORGANISATIONAL STRUCTURE

CHAIRMAN

CORPORATE CENTR E

DMD&CCODMD&CCO

DMD(I&MA)DMD(I&MA)

CVOCVO

DMD&CDODMD&CDO

BUSINESSGROUPS MD&GE(CB)MD&GE(CB) MD&GE(NB)MD&GE(NB) DMD&GE(IB)DMD&GE(IB) DMD&GE(A&S)DMD&GE(A&S)

DMD&CFO

DMD(IT)DMD(IT)

Chief Economic AdvisorChief Economic Advisor

BANK OF BENGAL H.O

BIBLIOGRAPHY

WEBSITS:

[email protected] www.online.smeproducts.com [email protected]

WRITEN MATERIAL:

The Times of India The Tribune MOSMEP’s Manual Philip Kotler (Marketing Management) MOSMEP Journals


http://www.online.smeproducts.com/


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HISTORY OF SBI

Home » About SBI » Evolution

Not many financial institutions in the world today can claim the antiquity and majesty of the State Bank of India. Founded nearly two centuries ago with the primary intent of imparting stability to the money market, the Bank from its inception mobilized funds for supporting both the public credit of the Company's Governments in the three presidencies of British India and the private credit of the European and

Indian merchants. From about the 1860s, when the Indian economy took a significant leap forward under the impulse of quickened world

communications and ingenious methods of industrial and agricultural production, the Bank became intimately involved in the financing of practically every trading, manufacturing and mining activity of the sub-continent. Although large European and Indian merchants and manufacturers were undoubtedly the principal beneficiaries, the 'small man' was never ignored as loans as low as Rs.100 were disbursed in agricultural districts against gold ornaments. Added to these the Bank till the creation of the Reserve Bank in 1935 carried out numerous central-banking functions.

Adaptation to a changing world and the needs of the hour has been one of the strengths of the Bank. In the post-Depression era, for instance, when business opportunities became extremely restricted, rules laid down in the book of instructions were relaxed to ensure that good business did not go past. Yet seldom did the Bank contravene its rules or depart from sound banking principles to retain or expand its business. An innovative array of offices, unknown to the world then, was devised in the form of branches, sub-branches, treasury pay-offices, pay offices, sub-pay offices and outstations to exploit the opportunities of an expanding economy. New business strategies were also evolved way back in 1937 to render the 'best banking service' through 'prompt and courteous' attention to customers.

A highly efficient and experienced management, functioning in a well-defined organizational structure, did not take long to place the Bank on an exalted pedestal in the areas of business, profitability, internal discipline and above all credibility. An impeccable financial status, consistent maintenance of the lofty traditions of banking and observance of a high standard of integrity in its operations helped the Bank gain a pre-eminent status. No wonder the admiration for the Bank was universal as key functionaries of the India Office and Government of India, successive finance ministers of independent India, Reserve Bank governors and representatives of the chambers of commerce showered encomiums on it.

Modern day management techniques were also very much evident in the good old days. Years before corporate governance had become a buzzword,

the Bank's board functioned with a high degree of responsibility and concern for the shareholder. An unbroken record of profits and a fairly high rate of dividend all through ensured satisfaction. Prudential management and asset-liability management not only protected the interests of the Bank but also ensured that the obligations to customers were met.

The traditions of the past continue to be upheld even to this day as the State Bank gears itself to meet the emerging challenges of the new millennium.

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CONTENTS

1) INTRODUTION History of Bank Introduction of SBI Introduction of Marketing of SME Products

2) COMPANY PROFILE Board of Directors Organizational Structure Awards

3) SME ADVANCES BY BANK SME Credit Card SME Credit Plus SBI Shoppe Working Capital Finance To T&S Sector Flexi Loan for Trade And Services General Purpose Term Loan for SSI sector Doctor Plus Paryatan Plus Transport Plus Cyber Plus Swarojgar Credit Card Artisan Credit Card Semfex II Rice Mills Plus Arthias Plus

4) ELEMENTS OF DOCUMENTATION 5) ANALYSIS & INTERPRETATION 6) FINDINGS 7) SUGGESTION 8) LIMITATION 9) CONCLUSION 10) BIBLIOGRAPHY

Bibliography

Annexure

Finding

Certificate

COMPANY PROFILE

Mission Statement

To retain the bank's position as the Premier Indian Financial Services Group, with world class standards and significant global business committed to excellence in customer, shareholder and employee satisfaction and to play a leading role in the expanding and diversifying financial services sector while continuing emphasis on its development banking role.

VISION STATEMENT (QUALITATIVE)

Premier Indian Financial Services Group with global perspective, world class standards of efficiency and professionalism and core institutional values.

Retain its position in the country as a pioneer in development banking. Maximize shareholder value through high sustained earnings per share.

An institution with a culture of mutual care and commitment, a satisfying and exciting work environment and continuous learning opportunities.

VALUES

Excellence in customer service. Profit orientation. Belonging and commitment to the bank. Fairness in all dealings and relations. Risk-taking and innovation. Team-playing. Learning and renewal. Integrity.

Transparency and discipline in policies & systems.

BOARD OF DIRECTORS

Directors on the Bank's Central Board as on 11th October 2006

Sl.No Name of DirectorSection underSBI Act

1. Shri.O. P. Bhatt Chairman

Section19(a)

2. Shri.T.S.Bhattacharya Managing Director

Section19(b)

3. Shri.Yogesh Agrawal Managing Director

Section19(b)

4. Prof. M.S. Swaminathan Section19(c)5. Shri. Ajay G.Piramal Section19(c)6. Shri. Suman Kumar Bery Section19(c)7. Dr. Ashok Junjhunwala Section19(c)8. Shri. A.C.Kalita Section19(ca)9. Shri. Amar Pal Section19(cb)10. Shri. Arun Singh Section19(d)11. Shri. Rajiv Pandey Section19(d)12. Shri. Piyush Goyal Section19(d)13. Shri. Ashok K Jha Section19(e)14. Smt. Shyamala Gopinath Section19(f)

Awards of SBI

A. Silver jubilee Award —Sh. Arun Kumar (By S.D Sharma on 06-06-2007)

B. Blood Donation Award for SBI Pvddukottai Branch and PB Manager –Sri T.V Rajagopalan (By CM Pvddukottai Branch on 22-01-2006)

C. SBI BAGS IBA-CH BHABHA Research Award 2006 —Sri Nivasan G. (By K.S Kang on 18-05-2006)

D. Chair man’s Club Member-2003-2004. – (By AGM(HR) Corporate Centre, Mumbai on 12-01-06)

E. Our Colleague Sri B. Madhusudan Rao, is Awarded M.Phill in Library Science (By Admin on11-08-2005)

F. Our Colleague Anil Kumar Srivastava wins all expenses paid European Trip sponsored by the Economic Times. (By Anil Kumar Srivastava, DM,LHO Lucknow on 03-08-2005

G. AGM, DRTCELL, Sri N.B Toshniwal Awarded Doctorate- (By Sri N.B Toshniwal, AGM, DRT Cell, Mumbai on 16-07-05)

H. Shri U,P Singh, AGM(faculty)-SBIICM Hyderabad wins first prize in Inter Bank Hindi Essay Competition 2004-2005 (By SBICM, Hyderabad on 10-07-2005)

I. Winners of whole Bank level Trainers Trophy(2003-2004) (Congratulations By Principal SBI, RD Hyderabad on 12-03-2005)

ANAYSIS DATA

2009-10 2008-09 % CHANGETOTAL INCOME 45260 43415 4.25TOTAL EXPENDITURE 40719 39008 4.39NET PROFIT 4541 4407 3.04EARNING PER SHARE (Rs) 86.29 83.73 3.06RETURN ON AVG. ASSET% 0.84 0.89 -(5.26)RETURN ON EQUITY % 14.24 15.47% -(7.59)EXPENSES TO INCOME% 54.18 58.70PROFIT PER EMPLOYEE (IN THOUSAND)

236.81 216.76 9.25

PAIDUP CAPITAL & RESERVE

31298 27644 13.22

DEPOSITS 435521 380046 14.60ADVANCES 337336 261801 28.85NO. OF DOMESTIC BRANCH 9517 9177 3.70NO. OF FOREIGN OFFICES 83 70 18.57CAPITAL ADEQUACY 12.34% 11.88% 3.87 a. Tier-I 8.01 9.36 b. Tier-II 4.33 2.52NET NPA 1.56% 1.88% -(17.02)

SME ADVANCE

FINANCIAL PERFORMANCE

1. PROFIT: The operating profit of the Bank is Rs.9999.94 cr (which is arrived at after reckoning amortization loss of Rs.1677.51 cr) compared to Rs.11299.23 crore in 2005-06. It would appear that operating profit has declined sharply. However, if the previous figure are regrouped on the lines of current year, the operating profit for fy 2008-09would stand revised to Rs.8248.99 cr (after regrouping the figures on the lines of the recent RBI Circular on treatment of amortization of Rs.3050.24 cr), which would mean a growth of 21.23% in operating profit. The Bank has posted Net Profit of Rs.4531.31 cr compared to Rs.4406.67 cr as on 08-09 registering a growth of 3.04%.

Net Interest Income recorded growth of 2.98% and other income increased (on regrouped figures) by 31.57%. The gains were largely offset by increase of 14.94% in interest expanded. Operating expanses remained controlled with marginal increase of 0.84%.

2. DIVIDEND : The Bank has declared a dividend of 140%.

3. NET INTEREST INCOME: Net Interest income has registered a growth of 2.98% from Rs.15589.13 cr in 05-065 to 16054.21 cr in 09-10.

This is due to growth in interest income on advances. The Net Interest Margin was at healthy 3.31% in 2009-10.

The gross interest income from global operations rose from Rs.35979.57 cr in 08-09to Rs.39491.03 cr in 09-10.

This is due to higher interest income on advances. Interest income on advances increased from Rs.16405.70 cr in 08-09to Rs.22872.66 cr in 09-10.

This is due to higher volume.

Average yield on advances in India increased from 7.78% in 08-09to 8.67% in 09-10.

Income from resources deployed in treasury operations in India declined by 21.18% due to decline both in average yield and the average resources deployed. The average yield, which was 7.10% in 08-09declined to 6.88% in 09-10.

This is due to declining trend in the interest rates.

Total interest expenses of the global operations increased from Rs.20390.44 cr. in 08-09to Rs.23436.82 cr in 2009-10. Interest expenses on deposit in India recorded an increase of 4.58% compared to previous year. Average level of deposits in India grew by 9.70%. This resulted in an increase in average cost of deposit from 4.57% in 08-09to 4.79% in 2009-10.

4. NON INTEREST INCOME:

Non interest income stood at Rs.5768.25 cr as against Rs.7435.20 cr in 2005-06. However, in view of the RBI Circular on treatment of amortization, the Non Interest Income in previous year stands revised to Rs.4384.96 cr resulting a growth of 31.57%. Loss on revaluation of investment declined from Rs.3050.24 cr in 2008-09to Rs.1677.51 cr in 2009-10.

During the year, the Bank received an income of Rs. 596.97 cr (Rs.317.18 cr in 05-06) by the way of dividend from Associate Banks/ subsidiaries and Joint Ventures in India and abroad. 5. OPERATING EXPENSES: There was marginal decline of 2.34% in the staff cost from Rs.8123.04 cr in 08-09to Rs.7932.58 cr in 09-10. Staff cost included an amount of Rs.478.30 cr (Previous year Rs.72.24 cr) paid towards Ex-gratia payment under Exit Option Scheme.

Other Operating expenses have also registered an increase of 8.01%

This is mainly due to increase in expenses on rent, taxes and lighting, insurance, postage, telegrams and telephones, repairs and maintenance and miscellaneous expenses.

Total operating expenses have registered an increase of 0.84%.

6. PROVISIONS AND CONTINGENCIES: Major amount of provisions are as under:

Rs.379.23 cr towards provision for deprecation on investments, excluding amortization of premium on “Held to Maturity” category ( as against Rs.3898.50 cr including amortization of premium on Held to Maturity category in 2005-06)

Rs.3014.61 cr towards provision for income tax including deferred tax credit of Rs.19.83 cr ( as against Rs.2040.60 cr in 08-09adjusted for deferred tax debit of Rs. 357.89 cr

Rs.589.19 cr towards Standard Asset (Rs.405.17 cr in 05-06) Total provision for Standard Asset has become Rs.1502.32 crore.

Rs.88.50 cr towards Fringe Benefit Tax.(147.81 in 05-06). Rs.1429.50 cr (net of write back) for non-performing asset

( Rs.147.81 cr in 05-06)

7. RESERVES & SURPLUS:

An amount of Rs.3358.11 cr (Rs.2933.77 cr in 05-06) was transferred to Investment Statutory Reserve.

An amount of Rs. 321.15 cr. (Rs.632.74 cr in 05-06) was transferred to other reserve.

8. ASSETS:

The total asset of the bank increased by 14.68%, from Rs.4,94,028.95 cr in 08-09to Rs.5,66,565.24 cr in 09-10. During the period Loan portfolio increased by 28.85%, from 2,61,801.00 cr in 08-09to 3,37,336.49 cr in 09-10.

Investment declined by 8.23%, from 1,62,534.24 cr in 08-09to 1,49,148.88 cr in 09-10.

The Bank's market share in domestic advance was 15.55%as of March'2007.

9. LIABILITIES:

The Bank’s aggregate liabilities (excluding capital & reserves) rose by 14.76%, from 4,,66,384.87 cr in 08-09to 5,65,266.68 cr in 09-10.

This is mainly due to increase in deposits and borrowings.

The global deposit stood at Rs.4,35,521.09 cr. An increase of 14.60% over March’ 06.

Bank’s market share in aggregate deposit of all schedule commercial banks in India stood at 14.91%.

10. TREASURY OPERATIONS:

The overall domestic investment portfolio declined from Rs.1,59,289.00 cr in 08-09to Rs. 1,36,927.00 cr in 09-10.

The 10 year G-Sec benchmark yield increased from 7.52% in 08-09to 7.97% in 09-10.

Profits from Equity Portfolio increased by 68.55% from Rs.193.00 cr to Rs.325.00 cr.

Average yield on treasury operations net of income on CRR Balances held increased from 7.64% to 7.67%.

Trading volumes in forex operations increased substantially thereby increasing income from forex operation from Rs.81.54 cr in 08-09to Rs.202.20 cr in 09-10, registering a growth of 147.98%.

Documents

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