A PROJECT REPORT ON

PERSONAL LOAN PRODUCTS

With reference to

STATE BANK OF INDIA

MAIN BRANCH,VZM.A Project Report submitted in

partial Fulfillment of the Requirements for the Award ofThe Degree of

MASTER OF BUSINESS ADMINISTRATION Submitted By

GANUGULA V.V.S CHAMUNDESWARIRegd No. 112250402032

Under the Guidance ofMr . V.S.K.VARMA Associate Professor

DEPARTMENT OF MANAGEMENT STUDIESMAHARAJAH’S POST GRADUATE COLLEGE

(APPROVED BY AICTE, NEW DELHI )

(Affiliated to Andhra University, Visakhapatnam)Phool Baugh, Vizianagaram.

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2012-2014

DECLARATION

I the undersigned do here by declare that this Project entitled “PERSONAL LOAN

PRODUCTS” with Reference to “STATE BANK OF INDIA”, MAIN BRANCH ,VZM.”

submitted by me on partial fulfillment of the Requirements for the award of the MASTER OF

BUSINESS ADMINISTRATION Degree in Andhra University,Visakhapatnam.

I also Declare is that, This Project work is the Result of my own Effort and that it has been not

submitted to any other institution or published anywhere for the award of any Degree or

Diploma.

Place: Vizianagaram

Date:

(G.V.V.S CHAMUNDESWARI)

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ACKNOWLEDGEMENT

I take this opportunity to express my sincere Gratitude to following eminent Personalities without those help and Guidance, the Successful completion of my Project work would have remained a dream.

I extend my Heartfelt thanks to Sri. P.S.GOWTHAM Sir, Branch Manager of STATE BANK OF INDIA MAIN BRANCH ,Vzm .who gave the permission to do the project on a Topic “MARKET P-SEGMENT LOAN PRODUCTS”.

I also express my sincere thanks to Mr. JALANDHAR Sir,Relationship Manager of STATE BANK OF INDA .My Internal guide of the Project. With His Esteemed Guidance, support by providing Project Data and valuable time for completion of the Project.

I express my gratitude to Professor Mr.B.S.N RAJU Head of the department and Mr.THAVITI NAIDU Director of M.R.P.G College Department of management , phool baugh road, Vizianagaram. For permitting me to pursue my Project Work

I heart fully thank my parents, my friends for their cooperation in completing my project.

(GANUGULA V V S CHAMUNDESWARI)

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CONTENTS__________________________________________________________________

Preface

CHAPTER 1 : INTRODUCTION History of banking

Nature & Significance of the Study

Objectives of the Study

Methodology of the Study

Limitations

CHAPTER 2 : ORGANIZATIONAL PROFILE OF STATE BANK OF INDIA

Origin and growthVision and Mission

Organization chart

Awards and achievements

CHAPTER 3 : CONCEPTUAL UNDERSTANDING ON P SEGMENT LOAN PRODUCTS

CHAPTER 4 : Analysis and Interpretation of Market Personal Segment Loan Products of STATE BANK OF INDIAInterest rates of various Banks

CHAPTER 5 : Summary, Suggestions & Findings

Bibliography

ANNEXURE : QUESTIONNAIRE

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5

CHAPTER-1

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INTRODUCTION

History of Banking

Begins with the first prototype banks of merchants in the ancient world, which

made grain loans to farmers and traders who carried goods between cities. This began around

2000 BC in Assyria and Babylonia. Later, in ancient Greece and during the Roman Empire,

lenders based in temples made loans and added two important innovations: they accepted

deposits and changed money. Archaeology from this period in ancient China and India also

shows evidence of money lending activity.

Banking, in the modern sense of the word, can be traced to medieval and early

Renaissance Italy, to the rich cities in the north such as Florence, Venice and Genoa. The Bardi

and Peruzzi families dominated banking in 14th century Florence, establishing branches in many

other parts of Europe.[1] Perhaps the most famous Italian bank was the Medici bank, established

by Giovanni Medici in 1397. The oldest bank still in existence is Monte dei Paschi di Siena,

headquartered in Siena, Italy, which has been operating continuously since 1472. It is followed

by Berenberg Bank of Hamburg (1590).

The development of banking spread from northern Italy through Europe and a

number of important innovations took place in Amsterdam during the Dutch Republic in the 16th

century, and in London in the 17th century. During the 20th century, developments in

telecommunications and computing caused major changes to banks' operations and let banks

dramatically increase in size and geographic spread. The financial crisis of 2007–2008 caused

many bank failures, including some of the world's largest banks, and provoked much debate

about bank regulation.

Monetary:

The history of banking depends on the history of money and on grain-money and

food cattle-money used from at least 9000 BC, two of the earliest things understood as available

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to barter (Davies), Anatolian obsidian as a raw material for stone-age tools being distributed as

early as 12,500 B.C., with organized trade occurring in the 9th millennia.(Cauvin;Chataigner

1998). In Sardinia one of the four main sites for sourcing the material deposits of obsidian within

the Mediterranean, trade of this were replaced in the 3rd millennia by trade in copper and silver.

The society adapted from relating from one fixed material as valued deposits available for trade

to another.

The possibility of stable economic relations was much improved with the change

from the reliance on hunting and gathering of foods to agricultural practice, during periods dated

as beginning sometime after 12,000 BC, at approximately 10,000 years ago in the Fertile

Crescent, in northern China about 9,500 years ago, about 5,500 years ago in Mexico and

approximately 4,500 in the eastern parts of the contemporary United States.

Structural:

By the fifth millennium B.C. the settlements of Sumer, such as Eridu, were

formed around a central temple. In the fifth millennium, people began to build and live in the

civilization of cities, providing a structure for the construction of institutions and establishments.

Tell and Uruk were two early urban settlements.

Mesopotamia:

Banking as understood as in an archaic state (or quasi-banking), is thought to

have begun during a period as early as the second part of the fourth millennia to as late as the

third to second millennia BC.

Some sources for a beginning time as within the 4th millennia are found in

sources published in the year 2005 and 1999, in the 4th to 3rd millennia, 1996,as the 3rd, based

on depository activity in temples (published during 1985 ) the 2nd (2009 ) or the 1st millennia,

published during 1958. Certainly an individual considered possibly active as a banker (explicitly

so at least by Van De Mieroop in WN Goetzmann and also by Moore, Lewis ) was alive during

the 18th century.

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Temple:

Prior to the reign of Sargon I of Akkad (2335-2280 ) the occurrence of trade was

limited to the internal boundaries of each city-state of Babylon and the temple located at the

centre of economic activity there-in; trade at the time for citizens external to the city was

forbidden.

In Babylonia of 2000, people depositing gold were required to pay amounts as

much as one sixth of the total deposited. Both the palaces and temple are known to have

provided lending and issuing from the wealth they held the palaces to a lesser extent. Such loans

typically involved issuing seed-grain, with re-payment from the harvest. These basic social

agreements were documented in clay tablets, with an agreement on interest accrual. The habit of

depositing and storing of wealth in temples continued at least until 209 B.C., as evidenced by

Antioch having ransacked or pillaged the temple of Aine in Ecbatana (Media) of gold and silver.

Family:

Cuneiform records of the house of Egibi of Babylonia describe the families financial

activities dated as having occurred sometime after 1000 BC and ending sometime during the

reign of Darius I, show according to one source a "lending house" (Silver 2002),a family

engaging in "professional banking..." (Dandamaev et al 2004) and economic activities similar to

a degree to modern deposit banking, although another states the families activities better

described as entrepreneurship rather than banking (Wunsch 2007). The provision of credit is

apparently also something the Murashu family participated in (Moshenskyi 2008).

Egypt:

About the time of the 18th century BC amounts of gold were deposited within the

boundaries of the temple buildings of Egypt for reasons of security.

In Egypt from early times, grain having an intrinsic value as food functioned, in

addition to precious metals, as money. The regional granaries were used to store and loan the

grain of communities, functions similar to banking services although not the same. Under the

dynastic rule of the Greek Ptolemies, the numerous scattered government granaries were

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transformed into a network of grain banks, centralized in Alexandria where the main accounts

from all the state granary banks were recorded. This centralized administration was the first

known governmental bank (according to de Soto), functioning as a trade credit system that

transferred payments between accounts without passing money.

Documents made to show the banking of taxes were known as peptoken-records.

The recording of the gathering of money to buy grain in pharaoh's kingdom as

ordered by Joseph, is written within Genesis of the Torah of the Holy Bible, and this money was

placed within the House of the pharaoh. Joseph brought with the money of the pharaoh a large

amount of corn, having this then laid in the public granaries.

Nature of the Study:

Market Segmentation is sub-dividing of a market into homogeneous subset of

customers, where any subset may conceivably be selected as a market target to be reached with a

distinct marketing mix.

Personal loans are fairly small general purpose lending tools that enable people to

borrow money. This type of funding can include unsecured personal loans and secured personal

loans. It might also include payday loans.

While personal loans rates tend to be lower than credit cards, they generally cost

more than mortgage loans. Bad credit personal loans, however, can come a rather hefty price.

This type of funding is generally sought out when people need to borrow a few

thousand dollars to do things like consolidate debt, make home important or even fund vacations.

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OBJECTIVES OF THE STUDY:

To study personal loan segment in State Bank of India and different types of loans

offered under P-Segment.

To study the terms and conditions followed by State Bank of India and the

customer opinion regarding the terms and conditions.

To compare and evaluate P-Segment Products offered by various other

commercial banks with State Bank o India.

To find out customer response regarding State Bank of India.

To find out customer response regarding State Bank of India P-Segment loans

with respect to services offered by State Bank o India.

To provide suggestions this any for the important of loan disbursement based on

the customer responses.

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METHODOLOGY

The relevant information necessary for the study is collected from to sources namely.

Primary data.

Secondary data.

Primary data :

It consists of information disclosed by the State Bank of India Personal loan heads of

various authorities of the respective departments of State Bank of India.

Conducting personal interviews with the concerned office of P-Segment loans department of

State bank of India.

Secondary data:

I consists of information obtained from P-Segment loan reports. Related banking

loan product books. and other banking websites. Files and some other important documents

maintained by the organization and Journals.

Collection of required data from P-Segment loans records of State bank of

India.

Reference from textbook and relating to P- Segment Loans management.

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LIMITATIONS OF THE STUDY

The study has been conducted is a systematic and comprehensive way so as to make

the project work an enviable one. However the topic under my study not is free from

limitations due to these factors.

They Market P-Segment Loan Products only with the help and tells about

customer satisfaction and opinion of the customers of P-Segment Loan Products.

The major limitation of the project under the study was time.

Since it has to be completed with in a short period of time so I could not able

to gather full information of project related data.

Not having sufficient to under comprehensive study

Non availability of complete information about customer satisfaction about

personal segment loan products.

Customer and respondents are not pay interest for giving his/her opinion and

suggestions because they are very busy in regular activates/ business/ jobs. So

did not get full information.

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CHAPTER-2

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PROFILE OF INDUSTRY

Banking in India:

In the modern sense originated in the last decades of the 18 th century. The

first banks were and Bank of Hindustan (1770-1829) and the General Bank of India, established

1786 and since defunct.

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The largest bank, and the oldest still in existence, is the State Bank of

India, which originated in the Bank of Calcutta in June 1806, which almost immediately became

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

Bombay and the Bank of Madras, all three of which were established under charters from the

British East India Company. The three banks merged in 1921 to from the Imperial Bank of India,

which, upon India’s independence, became the State Bank of India in 1955. For many years the

presidency banks acted as quasi-central banks, as did their successors, until the Reserve Bank of

India was established in 1935.

In 1969 the Indian government nationalized all the major banks that it did

not already own and these have remained under government ownership. They are run under a

structure know as “profit-making public sector undertaking” (PSU) and are allowed to compete

and operate as commercial banks. The Indian banking sector is made up of four types of banks,

as well as the PSUs and the state banks; they have been joined since 1990s by new private

commercial banks and a number of foreign banks.

Banking in India was generally fairly mature in term of supply, product

range and reach-even though reach in rural India and to the poor still remains a challenges. The

government has development initiatives to address this through the State bank of India

expending its branch network and through the National Bank for Agriculture and Rural

Development with things like microfinance.

History:

In ancient India there is evidence of loans from the Vedic period (beginning 1750

BC). Later during the Maurya dynasty (321 to 185 BC), an instrument called adesha was in use,

which was an order on a banker desiring him to pay the money of the note to a third person,

which corresponds to the definitions of a bill of exchange as we understand it today. During the

Buddhist period, ther was considerable use of these instruments. Merchants in large towns gave

letters of credit to one another.

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Colonial era:

During the period of British rule merchants established the Union Bank of

Calcutta in 1829, first as a private joint stock association, then partnership. Its proprietors were

the owner of the earlier commercial Bank and the Calcutta Bank, who by mutual consent created

Union Bank to replace these two banks. In 1840 it established an agency at Singapore, and

closed the one at Mirzapore that it had opened in the previous year. Also in 1840 the Bank

revealed that it had been the subject of a fraud by the bank’s accountant. Union Bank was

incorporated in 1845 but failed in 1848, having been insolvent for some time used new money

from depositors to pay its dividends.

The Allahabad Bank, established in 1865 and still functioning today, is oldest

Joint Stock bank in India, it was not the first though. That honour belongs to the Bank of Upper

India, which was established in 1863, and which survived until 1913, when it failed, with some

of its assets and liabilities being transferred to the Alliance Bank of Simla.

Foreign banks too started to appear, particulary in Calcutta, in the 1860s. The

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

1862; branches in Madras and Pondicherry, then a French possession, followed. HSBC

established itself in Bengal in 1869. Calcutta was the most active trading port in India, mainly

due to the trade of the British Empire, and so become a banking center.

The first entirely Indian joint stock bank was the Oudh Commercial Bank,

established in 1881 in Faizabad. It failed in 1958,. The next was the Punjab National Bank,

established in Lahore in 1895, which has survived to the present and is now one of the largest

banks in India.

Around the turn of the 20th century, the Indian economy was passing through a

relative period of stability. Around five decades had elapsed since the Indian Mutiny, and the

social, industrial and other infrastructure had improved. Indians had established small banks,

most of which served particular ethinc and religious communities.

The presidency banks dominated banking in India but there were also some

exchange banks and a number of Indian joint stock banks. All these banks operated in different

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segments of the economy. The exchange banks, mostly owned by Europeans, concentrated on

financing foreign trade. Indian joint stock banks were generally under capitalized and lacked the

experience and maturity to compete with the presidency and exchange banks. This segmentation

let Lord Curzon to observe, “In respect of banking it seems we are behind the times. We are like

some old fashioned sailing ship, divided by solid wooden bulkheads into separate and

cumbersome compartments.”

The period between 1906 and 1911, saw the establishment ofbanks inspired by

the Swadeshi movements. The Swadeshi movement inspired local businessman and political

figures tofound banks of and for the Indian community. A number of banks establishment then

have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of

Baroda, Canara Bank and Centeral Bank ofIndia.

The fervor of Swadeshi movement lead to establishing of many private banks in

Dakshina Kannada and Udupi district which were unified earlier and known by the name South

Canara (South Kanara) district. Four nationalized banks started in this district and also a leading

private sector bank. Hence undivided Dakshina Kannada district is known as “ Cradle of Indian

Banking”.

During the First World War (1914-1918) through the end of the Second World War

(1939-1945), and two years thereafter until the independence of India were challenging for Indian

banking. The years of the First World War turbulent, and it took its toll with banks simply collapsing

despite the Indian economy gaining indirect boost due to war-related economic activities. At least 94

banks in India failed between 1913 and 1918 as indicated in the following table.

Years Number of Banks Authorized Capital Paid-up Capital That failed (in Lakhs) (in Lakhs)

1913 12 274 35 1914 42 710 109 1915 11 56 5 1916 13 231 4 1917 9 76 25 1918 7 209 1

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Post- Independence:

The partition of India in 1947 adversely impacted the economies of Punjab and

West Bengal, paralyzing banking activities for months. India’s independence marked the end of

a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures

to play an active role in the economic life of the nation, and the industrial Policy Resolution

adopted by the government in 1948 envisaged a mixed economy. This resulted into greater

involvement of the state in different segments of the economy including banking and finance.

The major steps to regulate banking included:

The Reserve Bank of India, India’s central banking authority, was established

in April 1935,but was nationalized on 1 January 1949 under the terms of the

Reserve Bank of India (Transfer to Public Ownership) Act, 1948 (RBI,2005).

In 1949,the Banking Regulation Act was enacted which empowered the

Reserve Bank of India (RBI) “to regulate, control, and inspect the banks in

India”.

The Banking Regulation Act also provided that no new bank or branch of an

existing bank could be opened without a license from the RBI, and no two

banks Could have common directors.

Nationalization in the 1960s:

Despite the provisions, control and regulations of Reserve Bank of India, banks in

India except the State Bank of India or SBI, continued to be owned and operated by private

persons. By the 1960s the Indian banking industry had become an important tool to facilitate the

development of the Indian economy. At the same time, it had emerged as a large employer, and a

debate had ensued about the nationalization of the banking industry. Indira Gandhi the then

Prime Minister of India, expressed the intention of the Government of India in the annual

conference of the All India Congress Meeting in a paper entitled “ Stray thought on Bank

Nationalization” the meeting received the paper with enthusiasm.

Thereafter, her move was swift and sudden. The Government of India issued an

ordinance (Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969))

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and nationalized the 14 largest commercial banks with effect from the midnight 19 July 1969.

These banks contained 85 percent of bank deposit in the country. Jayaprakash Narayan, a

national leader of India, described the step as a masterstroke of political sagacity. Within two

weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition

and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August 1969.

A second dose of nationalization of 6 more commercial banks followed in 1980,

the stated reason for the nationalization was to give the government more control of credit

delivery. With the second dose of nationalization, the Government of India controlled around

91% of the banking business of India. Later on, in the year 1993, the government merged New

Bank of India with Punjab National Bank. It was the only merger between nationalized banks

and resulted in the reduction of the number of nationalized banks from 20 to 19. After this, until

the 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growth rate

o f the Indian economy.

Liberalization in the 1990s:

In the early 1990s, the then Marasimha Rao government embarked on a policy of

liberalization, licensing a small number of private banks. These came to be known as New

Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation

banks to be best up), which later amalgamated with Oriental Bank of Commerce, UTI Bank

(since renamed Axis Bank), ICICI Bank and HDFC Bank. This move along with the rapid

growth with strong contributed from all the three sectors of banks, namely, government banks,

private banks and foreign banks.

The next stage for the Indian banking has been set up with the proposed relaxation

in the norms for Foreign Direct Investors in banks may be given voting rights which could

exceed the present cap of 10%, at present it has gone up to 74% with some restrictions.

The new policy shook the Banking sector in India completely. Bankers, till this,

were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The

new wave ushered in a modern outlook and tech-savvy methods for traditional banks. All this led

to the retail boom in India. People not just demanded more from their banks but also received

more.

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Current period:

By 2010, banking in India was generally fairly mature in terms of supply, product

range and reach- even though reach in rural India still remains a challenges for the private sector

and foreign banks. In terms of quality of assets and capital adequacy , Indian banks in considered

to have clean, strong and transport balance sheets relative to other banks in comparable

economies in it region. The Reserve Bank of India is an autonomous body, with minimal

pressure from the government. The stated policy of the Bank on the Indian Rupee 9is to manage

volatility but without any fixed exchange rate-and this has mostly been true.

In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its

stake in Kotak Mahindra Bank ( a private sector bank) to 10%. This is the first time an investor

has been allowed to hold more than 5% in a private sector bank since the RBI announced norms

in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them.

In recent years critics have charged that the non-government owned banks ate too

aggressive in their loan recovery efforts in connection with housing, vehicle and personal loans.

There are press reports that the banks loan recovery efforts have driven defaulting borrowers to

suicide.

Adoption of banking technology:

The IT revolution had a great impact in the Indian banking system. The use

computers had led to introduction of Online banking in India. The use of the modern innovation

and computerization of the banking sector of India has increased many fold after economic

liberalization of 1991 as the country’s banking sector has been exposed to the world’s market.

The Indian banks were finding it difficult to compete with the international banks in terms of the

customer service without the use of the information technology and computers.

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The RBI set up a number of communities to define and coordinate banking

technology. These have included:

In 1984 formed the Committee on Mechanization in the Banking Industry

(1984) whose chairman was Dr. C. Rangarajan, Deputy Governor,

Reserve Bank of India. The major recommendations of this committee

was introducing MICR technology in al the banks in the metropolis in

India. This provided use of standardized cheque forms and encoders.

In 1988, the RBI set up the Committee on Computerisation in Banks

(1988) headed by Dr. C.R. Rangarajan which emphasized that settlement

operation must be computerized in the clearing house of RBI in

Bhubaneshwar, Guwahati, Jaipur, Patna and Thiruvananthapuram. It

further stated that there should be National Clearing of inter-city cheques

at Kolkata, Mumbai, Delhi, Chennai and MICR should be made

Operational. It also focused on computerisation of branches and increasing

connectivity among branches through computers. It also suggested

modalities for implementing on-line banking. The committee submitted its

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reports in 1989 and computerization began from 1993 with the settlement

between IBA and bank employees' association.

In 1994, Committee on Technology Issues relating to Payment systems,

Cheque Clearing and Securities Settlement in the Banking Industry (1994)

was set up under chairman Shri WS Saraf. It emphasized Electronic Funds

Transfer (EFT) system, with the BANKNET communications network as

its carrier. It also said that MICR clearing should be set up in all branches

of all banks with more than 100 branches.

In 1995, Committee for proposing Legislation on Electronic Funds

Transfer and other Electronic Payments (1995) again emphasized EFT

system.

Total numbers of ATMs installed in India by various banks as on end June 2012

is 99,218. The New Private Sector Banks in India is having the largest numbers of ATMs which

is followed by off-site ATMs belonging to SBI and its subsidiaries and then it is followed by

New Private Banks, Nationalized banks and Foreign banks. While on site is highest for the

Nationalized banks of India.

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Branches and ATMs of Scheduled Commercial Banks as on end March 2005

Bank type Number of branches On-site ATMs Off-site ATMs Total ATMs

Nationalized banks 33627 3205 1567 4772

States bank of India 13661 1548 3672 5220

Old private sector banks 4511 800 441 1241

New private sector banks 1685 1883 3729 5612

Foreign banks 242 218 582 800

Further reading:

The Evolution of the State Bank of India (The Era of the Imperial Bank of

India, 1921–1955) (Volume III)

Banking Frontiers – a monthly magazine, published by Mumbai based

Glocal Infomart. Editor.

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PROFILE OF STATE BANK OF INDIA

Type Public

Industry Banking financial services

Founded 1 July 1955

Headquarters Mumbai, Maharashtra, India

Area served Worldwide

Key people Pratip Chaudhuri (Chairman)

Products Credit cards, consumer banking, corporate

banking, finance and insurance, investment

banking, mortgage loans, private banking,

wealth management.

Revenue US$ 36.950 billion (2012)

Profit US$ 03.202 billion (2012)

Total assets US$ 359.237 billion (2012)

Total equity US$ 20.854 billion (2012)

Owner(s) Government of India

Employees 292,215 (2012)

It is a multinational banking and financial company based in India. It is a

government-owned corporation with its headquarters in Mumbai, Maharashtra. As of December

2012, it had assets of US$ 501 billion and 15,003 branches, including 157 foreign offices,

making it the largest banking and financial services company in India by assets.

The bank traces its ancestry to “British India” through the “Imperial Bank of

India” to the founding in 1806 of the “Bank of Calcutta”, making it the oldest commercial bank

in the Indian Subcontinent Bank of Madras merged into the other two presidency banks Bank of

25

Calcutta and Bank of Bombay to form to Imperial Bank of India, which in turn becomes the

State Bank of India.

The Government of India nationalized the Imperial Bank of India in 1955, with

the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In the

stake held by the Reserve bank of India. SBI was ranked 285 th in the fortune Global 500 rankings

of the world’s biggest corporations for the year 2012.

SBI provides a range of banking products through its network of branches in India

and overseas including products aimed at non-resident Indian, SBI has 14 regional hubs and 57

zonal offices that one located at important cities throughout the country.

SBI is regional banking behemoth and has 20% market share in deposit and loans

among Indian commercial banks.

The State Bank of India was named the 29th most reputed company in the world

according to forbes 2009 ranking and was the only bank featured in the “top 10 Banks of India”

list in an annual survey conducted by Brand finance and the Economic Times in2010.

History:

The roots of the State Bank of India lie in the first decade of 19 th century, when the

“Bank of Calcutta”, later renamed the “Bank of Bengal” was established on 2 June 1806. The Bank of

Bengal was one of three presidency banks, the other two being the “Bank of Bombay” (incorporated on

15 April 1840) and the “Bank of Madras” (incorporated on 1 July 1843). All three presidency banks were

incorporated as joint stock companies and were the result of the royal charters. These three banks

26

received the exclusive right to issue paper currency Act, the right was taken over by the Government of

India.

The presidency banks amalgamated on 27 January 1921, and the re- organized banking

entry took as its name “Imperial Bank of India”. The “Imperial Bank of India” remained a joint stock

company but without Government participation.

Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of

India, which is India’s Central Bank, acquired a controlling interest in the Imperial Bank of India. On 30

April 1955, the Imperial Bank of India become te State Bank of India. The Government of India stake in

SBI so as to remove any conflict of interest because the RBI is the country banking regulatory authority.

In 1959 the Government passed the State Bank of India (subsidiary Banks) Act, which

made eight State Banks associates of SBI. A process of consolidating began on 13 September 208, when

the “State Bank of Sourashtra” merged with SBI.

SBI has acquired local banks in rescues. The first was the “Bank of Behar” (est 1911),

which SBI acquired in 1969, together with its 28 branches. The next year SBI acquired “ National Bank

of Lahore” (est 1942), which had 24 branches five years later in 1975, SBI acquired “Krishnaram Baldeo

Bank”, which had been established in 1916 in “Gowalior State”, under the patronage of Maharaja Madho

ro Scindia. The bank had been the Dukan Pichadi, a small moneylender, owned by the Maharaja. The new

banks first manager was Jall N. Branches a parsi. In 1985, SBI acquired the “Bank of Cochin” in Kerala,

which had 120 branches. SBI was the acquired as tis affiliate, the “State Bank of Travancore”, already

had an extensive network in Kerala.

The State Bank of India and all its associate banks are identified by the same blue keyhole logo. The State

Bank of India word mark usually has one standard type face , but also utilize other typefaces.

International Presence:

The Israeli branch of the State Bank of India located in Ramat Gan.

27

As of 31 March 2012, the bank had 173 overseas offices spread over 34 countries.

It has branches of the parent in Moscow, Colombo, Dhaka, Frankfurt, Hong Kong, Tehran,

Johannesburg, London, Los Angeles, and Male in the Maldives, Muscat, Dubai, New York,

Osaka, Sydney, and Tokyo. It has offshore banking units in the Bahamas, Bahrain, and

Singapore, and representative offices in Bhutan and Cape Town. It also has an ADB in Boston,

USA.

The Canadian subsidiary, State Bank of India (Canada) also dates to 1982. It has

seven branches, four in the Toronto area and three in the Vancouver area.

SBI operates several foreign subsidiaries or affiliates. In 1990, it established an

offshore bank: State Bank of India (Mauritius)

State Bank of India branch at Tsim Sha Tsui, Hong Kong

In 1982 the bank established a subsidiary , State Bank of India (California), which

now has ten branches nine branches in the State of California and one in Washington, D.C. the

10th branches was opened in Fremont, California on 28 March 2011. The other eight branches in

California are located in Los Angeles, Artesia, San Jose, Canoga Park, Fresno, San Diego, Tustin

and Bakersfield.

In Nigeria, SBI operates as INMB Bank. This bank began in 1981 as the indo-

Nigeria Merchant Bank and received permission in 2002 to commerce retail banking. It now has

five branches in Nigeria.

In Nepal, SBI owns 55% of Nepal SBI Bank, which has branches throughout the

country. In Moscow, SBI owns 60% of Commercial Bank of India, with Canara Bank owning

the rest. In Indonesia, it owns 76% of PT Bank Indo Monex.

28

The State Bank of India already has a branch in Shanghai and plans to open in

Tianjin

In Kenya, State Bank of India owns 76% of Giro Commercial Bank, which it

acquired for US$8 million in October 2005.

Associate banks:

Main Branch of SBI in Mumbai.

SBI has five associate banks; all use the State Bank of India logo, which is a blue circle, and all

use the “State Bank of” name followed by the regional headquarters name:

State Bank Of Bikaner & Jaipur

State Bank of Hyderabad

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Earlier SBI had seven associate banks , all of which had belonged princely states

until the government nationalized them between October 1959 and May 1960. In tune with the

First Five Year Plan, which prioritized the development of rural India, the government integrated

these banks into State Bank of India system to expend its rural outreach, there has been a

proposal to merge all the associate banks into SBI to create a “mega bank” and streamline the

group’s operations.

The first step towards unification occurred on 13 August 2008 when State Bank

of Saurashatra merged with SBI, reducing the number of associate state banks from seven to six.

29

Then on 19 June 2009 the SBI board approved the absorption of State Bank of Indore. SBI holds

98.3% in State Bank of indore.

The acquisition of State Bank of Indore added 470 branches to SBI’s existing

network of branches. Also, following the acquisition, SBI’s total assets will inch very close to

the Rs- 10 trillion mark (10 billion long scale).the total assets of SBI and the State Bank of

Indore stood at Rs-9,981,190 million as of March 2009.the process of merging of State Bank of

Indore was completed by April 2010, and the SBI Indore branches started functioning as SBI

branches on 26 August 2010.

State Bank of India Mumbai LHO

Non- banking Subsidiaries:

SBI Capital Markets Ltd

SBI funds Management Pvt Ltd

SBI Factors & Commercial Services Pvt Ltd

SBI Cards & Payments Services Pvt Ltd (SBICPSL)

SBI DFHI Ltd

SBI Life Insurance Company Ltd

SBI General Insurance

In March 2001, SBI (with 74% of the capital), joined with BNP Paribas (with

26% of the remaining capital), to form a joint venture life insurance company named SBI Life

Insurance company Ltd. In 2004, SBI DFHI (Discount and Finance House of India) was founded

with its headquarters in Mumbai.

30

Other SBI services points:

SBI has 27,000+ATMs (25,000th ATM was inaugurated by the then Chairman of

State Bank of India ShriO.P.Bhatt on 31 March 2011, the day of his retirement) and SBI group

(including associate banks) has about 45,000 ATMs. SBI has become the first bank of install an

ATM at Drass in the Jammu & Kashmir Kargil region. This was the Bank’s 27,032nd ATM on 27

July 2012.

Logo and Slogan:

The logo of the State Bank of India is a blue circle with a small cut in the bottom

that depicts perfection and the small man the common man being the center of the

bank’s business.

Slogans: “PURE BANKING NOTHING ELSE”, “WITH YOU-ALL THE WAY”,

“A BANK OF THE COMMON MAN”, “THE BANKER TO EVERY INDIAN”,

“THE NATION BANKS ON US”.

Recent awards and recognitions:

Best Online Award, Best Customer Initiative Award & Best Risk

Management Award (Runner Up) by IBA Banking Technology Awards

2010.

The Bank of the year 2009, India (won the second year in a row)by The

Banker Magazine.

Best bank- Large and Most Socially Responsible Bank by the Business

Bank Awards 2009.

Best Bank 2009 by Business India.

The Most Trusted brand 2009 by The Econimic Times.

Most Performed Bank & Most Preferred Home loan provider by CNBC.

Visionaries of Financial Inclusion by FINO.

Technology Bank of the Year by IBA Banking Technology Awards.

SKOCH awards 2010 for Virtual corporation Category for is e-payment

solution

31

The Brand Trust Report: 11th most trusted brand in Hindustan.

Major competitor:

Some of the major competitors for SBI in the banking sector are ICICI Bank,

HDFC Bank, Punjab National Bank and Bank of Baroda. However in terms of average market

share, SBI is by far the largest player in the market.

State Bank of India (SBI), with a 200 year history, is the largest commercial bank in India in

terms of assets, deposits, profits, branches, customers and employees. The Government of India

is the single largest shareholder of this Fortune 500 entity with 61.58% ownership. SBI is ranked

60th in the list of Top 1000 Banks in the world by "The Banker" in July 2012.

The origins of State Bank of India date back to 1806 when the Bank of Calcutta (later called the

Bank of Bengal) was established. In 1921, the Bank of Bengal and two other banks (Bank of

Madras and Bank of Bombay) were amalgamated to form the Imperial Bank of India. In 1955,

the Reserve Bank of India acquired the controlling interests of the Imperial Bank of India and

SBI was created by an act of Parliament to succeed the Imperial Bank of India.

The SBI group consists of SBI and five associate banks. The group has an extensive network,

with over 20000 plus branches in India and another 173 offices in 34 countries across the world.

As of 31st March 2012, the group had assets worth USD 359 billion, deposits of USD 278 billion

and capital & reserves in excess of USD 20.88 billion. The group commands over 22% share of

the domestic Indian banking market.

SBI's non- banking subsidiaries/joint ventures are market leaders in their respective areas and

provide wide ranging services, which include life insurance, merchant banking, mutual funds,

credit cards, factoring services, security trading and primary dealership, making the SBI Group a

truly large financial supermarket and India's financial icon. SBI has arrangements with over 1500

various international / local banks to exchange financial messages through SWIFT in all business

centers of the world to facilitate trade related banking business, reinforced by dedicated and

highly skilled teams of professionals.

 World to facilitate trade related banking business, reinforced by dedicated and highly skilled teams of professionals.

32

Structure:

Current Board of Directors:

As on 14 January 2013, there are fifteen members in the SBI board of directors:-

Pratip Chaudhuri (Chairman)

Hemant G. Contractor (Managing Director)

Diwakar Gupta (Managing Director)

A. Krishna Kumar (Managing Director)

S. Visvanthan (Managing Director)

S. Venkatachalam ( Director)

D. Sundaram (Director)

Parthasarathy Iyengar (Director)

Thomas Mathew (Director)

S.K. Mukherjee ( Officer Employee Director)

Rajiv Kumar ( Director)

Joti Bhushan Mohapatra ( Workmen Employee Dirctor)

Deepak Amin (Director)

Harichadra Bahadur Singh (Director)

D.K. Mittal (Director)

33

Organization Chart

34

35

36

CHAPTER-3

37

CONCEPTUAL FRAME WORK

PERSONAL LOANS:

A personal loan is an amount of money being burrowed by an individual.

Good credit is usually required to qualify for a personal loan and you could have high interest

rates.

A lump sum of money borrowed from a bank or other financial institutions may

be considered a personal loan. Personal loans are simply for personal use.

Personal loans may be used for debt consolidation, paying bills or to know the

different types of personal loans available before applying to choose the most appropriate

option.

Secured Loans

Un secured Loans

Short- term Loans

Secured Loans A secured personal loan often is used to purchase a home or car, and the

item bought becomes the collateral for the loan. If the loan goes into default , the bank or

financial institution then can take collateral

A secured personal loan also may be tied to another purchase, such as boat, and

the sane rules would apply. The interest on secured personal loans may be lower due to the

lower risk associated with them.

Un secured loans: An u secured loan doesn’t require a house, car or other piece of property

to be tied to the loan, but the interest rate may be higher. Most lenders will conduct a credit

38

check as part of the application process for an unsecured loan, and acceptance or denial will rest

highly on post credit.

Short-Term loans: Short-Term loans typically carry a higher interest rate because the repayment period id

much shorter than other types of personal loans. The maximum amount a borrower can take out

may be much smaller with a short- Term loan.

The emergence of middle class with high purchasing power in the

last 20/ 25 years has contributed to the consumer boom. The demand for consumer credit has

been rising steadily and our Bank has responded with attractive schemes of credit. The SBI. Card

is being promoted in a big way. There is stiff competition from foreign banks, corporate

institutions, mutual funds, credit card organizations etc in the P segment. In this segment

deposits can be attracted by providing to the consumer a range of services including credit to

acquire assets/ meet expenses. More importantly, customer - friendly and modern banking

facilities like ATM’s, e-banking, demat services, credit cards, insurance products, mobile

banking, internet banking, e-broking etc., should be extended to young/high net worth customers.

Profit from C&I segment are getting thinner and hence retail banking i.e. advances to PB

customers is increasingly becoming an important income earning activity. Further, the credit

growth for industrial activities has been very sluggish in the last few years especially, in the last

2 years. Satisfied PB Segment customers can be regarded as Ambassadors opening up the gates

of business for C & I, SIB and Government Sectors.

Saral scheme with attractive features, liberalized Education loans,

the Home loans and Car loans with many variants and plus schemes will help attract sizeable

business from identified sub-segments.

Advances under P Segment are not priority sector advances except

Educational loans and Housing loans (subject to limits). Staff are not eligible for these advances

generally. Loan amount has to be disbursed to suppliers/educational institutions etc by means of

bankers cheque . while stipulating repayment installments, generally it should be ensured that

the total deductions/ repayments shall not exceed 30% of the salary. physical insepection of

39

assets has been waived except for motor vehicles. The customer has to give Annual possession

certificate in respect of the assets purchased.

CLASSIFICATION OF P-SEGMENT LOAN PRODUCTS:

Home Loan

Car Loan

Education Loan

Loan to Pensioners

Two-Wheeler Loan

Festival Loan

Gold Loan

Loan against NSCs, KVPs, RBI, LIC Bonds

Boutique Banking:

SBU has introduced “Boutique banking” services in a way across

the country through is Personal Banking Branches.

Systems and Procedures

Loans at Fixed Rates of interest:

W.e.f. July 2000,the advances in PB Segments both on fixed

interest rate basis and “varying rate” basis.

The fixed rate loans permit the borrower to determine the exact

amount of repayment. It is very popular and is offered by competitors. Interest can be worked out

on the monthly reducing balance at the same rate of interest throughout the loan period.

Schemes eligible for Fixed Rate Loans:

40

1. Housing Loans to individuals Up to Rs. 1 Crore

2. Education Loans – Up to Rs. 5 Lakhs

3. Vehicle Loans- Up to Rs. 5 Lakhs

4. Personal Loans- Up to Rs.1.5 Lakhs

5. Term Loans against mortgage of immovable property – Up to Rs. 5 Lakhs

6. Demand Loan against gold ornaments- Up to Rs. 1 Lakh

Post-dated Cheques in respect of repayment of Personal Banking Advances:

Procedures for obtaining post-dated cheques (PDC) in respect of personal

Banking advances.

1) No. of Cheques:

No of cheques should cover the full repayment period: in case of longer

-period advances, at least 48 cheques have to be obtained They should be crossed with the Bank's

special crossing seal on receipt. In cases where mandate for ECS Debit/S.I is received, only 6

PDCs duly signed (5 for EMIs and one cheque for full loan amount) should be obtained from the

borrower(s).

2) Date of PDC:

should synchronies with salary credit, rent credit etc., where repayment is linked

to such credits. In other cases, cheques to be dated prior to the 7th of every month.

3) Diary note:

A diary note should be made after 42 months so that cheques for periods in excess of 48

months can be obtained, where needed.

4) Custody: Not to be kept with security documents. Kept in punt officer (Loans) and Mgr

(PBD)/Operations/cash officer in a lin)

5) Procedure for handling returned cheques: -

- If a cheque is returned unpaid for want of sufficient Intuit,, th, immediately.

41

- The cheque should be re-presented within 3 days of its ur ill, II ,,i ,Ii III, the

borrower.

- If the borrower fails to deposit the amount of the chetpu initiated as under.

i) When a cheque is dishonored, notice has to be given in wt Mug w information

from the bank regarding dishonor of the cheque molt I received for dishonored

cheques.

ii) If the cheque amount is not paid within 15 days, a complaint has to be filed

before the metropolitan magistrate or First class magistrate, within I month from

the date of cause of action.

(Note: Cause of action means the last date on which the payment could have been

made by the customer).

Transfer of a personal Loan Account: Disbursed under cheek-off facility :

On receipt of a written request to transfer, the account, a letter to be written to the officer

presently authorized to disburse salary to convey instructions regarding check-off to the

transferee office under advice to the branch. The account can be transferred only after receipt of

a written confirmation from the authorized official that instructions in respect of cheek-off have

been noted for compliance by the Drawing and Disbursing Officer at the transferee office. The

written confirmation should be kept along with the security documents. A fresh 'Irrevocable

letter of Authority' need not be obtained.

Not disbursed under check-off facility:

As per Para 6 of the personal Loan agreement. the borrower is liable to cheque3s if

required.

The Cheques thus replaced will be transferred along with the documents to the transferee

branch.

All P segment loans other than Home, Auto and Student Loans:

42

The borrowers should now given an undertaking to the effect that the proceeds of the

loan will not be used for any speculative purpose whatsoever. This would mitigate the risk of

diversion of our general purpose loans to capital market.

Irregularity Reports in P Segment:

Irregularity reports are very useful for effective monitoring and containment of NPA’s

apart from early warning alerts to unearth other adverse features like frauds. Hence, irregularity

reports system for P segment Loans has been introduced, in line with the irregularity reporting in

other business segments. The settlement features are:

At quarterly int5ervals in respect of Housing Loans/half yearly intervals for other

P-segment Loans.

Simple listing of irregular accounts instead of separate report for individuals

accounts, keeping in lager number of loan accounts.

The report should include details of all loan accounts including those sanctioned

by Manager (PBD), with a view to improve the efficacy of the exercise the controllers to have an

objective analysis of the irregular loan accounts.

Submission of report in duplicate to the controllers, on or before the 15 th of the

following quarter/half year.

Publication of names and photographs of defaulter borrower to whom notices U/S

13(2) of SARFAESI Act issued: The name and photographs of defaulter-borrowers can be

published in National Newspapers only after approval of Circle CGM on a case by case basis;

the facts of the case are to be vetted first by the Law Department. This step is to be used more as

a deterrent than as primary tools for recovery and in a routine way.

New Credit Scoring models have been introduced for Personal baking Segment advances:

The Scoring models will serve as a credit decision-making tool and will strengthen the

existing system of sanction or rejection of loan applications. The scoring models will be

implemented through the Loan Origination Software (LOS) used at RACPCs/RASMECCs. The

43

features of the scoring model have been incorporated in the LOS. No loans may be sanctioned

without application of the Scoring Models.

There has been a massive growth in Retail Strengths in the recent past, both in terms of

ranges and volumes, combined with a need to move towards implementing Global Standards in

lending. This has necessitated standardized and advanced approaches. As per the guidelines for

migration to the Internal Ratings Based approach, retail exposures (i.e. up to a threshold limit of

Rs.5 crore in PER, SME and Agriculture Segments) are required to be sub-classified into pools

based on homogeneity of risk factors. The consultant has since complete4d development of

scorecards for all Personal Segment Loan schemes. (i.e. Home Loan, Auto Loan, Personal Loan,

Education Loan and Two-Wheeler Loan) Which have been approved for implementation?

Broadly, the scoring models would serve the following purposes:

Facilitate business growth by enhanced efficiencies in the appraisal and sanction process.

Reduction of Turnaround Time (TAT). Appropriate Pricing for a given product based on credit scores. Facilitate evaluation of risk through aggregation of date relating to specific

clusters and other characteristics. Evaluate quality of assets in the Bank’s portfolio.

Interest Subsidy Scheme for Housing for the Urban Poor (ISHUUP): Ministry of Housing and Urban Poverty Alleviation, Govt. of India has designed an

interest subsidy scheme as an instrument of addressing the housing needs of the Economically

Weaker Section (EWS) and Low Income Group (LIG) through Jawaharlal Nehru National

Urban Renewal Mission (JNNURM).

important features of the scheme are:

Purpose:

To provide home loan with Central Government subsidy to EWS/LIG persons for

acquisition/construction of house.

Eligibility for application under the Scheme:

44

i) Beneficiary should not won a house in his/her name or in the name of his/her spouse

or any dependent child. Beneficiaries who own land in any urban area but do not have

any pucca house in their.

Name or in the name of their spouse or any dependent child will also be convered

under the scheme.

ii) O ther criteria:

Income Group

Average monthly household income@

Minimum size of the house

Maximum loan amount eligible for subsidy

Maximum loan permissible amount

EWS Up to Rs.5,000

25 sq,mts Rs.1 lakh Rs. 1 lakh

LIG Rs.5,001 to Rs. 10,000

40 sq.mts Rs. 1.60 lakh Rs. 1 lakh

Identification of the beneficiaries: Beneficiaries will be identified by the Urban Local Bodies (ULBs) or the Local Nodal

Agency (LNA) identified by the respective State Governments for the purpose.

Loan Term:

Maximum permissible loan term will be 20 years. Loan term will be inclusive of

moratorium period if any,

Interest application:

Interest will be applied on daily outstanding loan balance at monthly rests.

Repayment:

45

EMIs. EMIs payable by the borrower will be calculated after reducing the Central

Government subsidy which is receivable upfront. Form the maximum principal amount.

Interest Subvention on Individuals Housing Loans:

The objective of the Scheme is to provide interest subsidy on housing loans as a measure

to generate additional demand for credit and to improve affordability of housing to eligible

borrowers in the middle and lower income groups. The details of the scheme are:

Eligibility:

Interest subvention of 1 per cent will be available on housing loans up to Rs. 15 lakh to

individuals for construction/purchases of a new house or extension of an existing house,

provided the cost of constructions/price of the new house /extension does not exceed Rs.25 lakh

(W.e.f 01-04-2012).

Duration:

The scheme will be in operation from October 1,2009 to March 31,2012.

Interest Subsidy:

Subsidy of 1 per cent will be defined as reeducation in interest rate by 100 basis points

per annum from the existing rate of interest for a particular amount and tenor.

It will be applicable to the first twelve installments of all such loans sanctioned and disbursed

during the currency of the Scheme and would be computed for 12 months on the disbursed

amount. The subsidy amount will be adjusted upfront in the principal outstanding, irrespective of

whether the loan is on fixed or floating rate basis.

SBI Two-Wheeler Loan

46

Purpose:

Purchase of new two-wheelers Scooter/motor cycle/moped/battery operated two-wheelers

of reputed make; available at all branches.

Eligibility:

1. For regular petrol/diesel/gas operated scooters & motor cycle: Min NMI Rs.6,25/-;or NAI

Rs.75,000/-

2. For mopeds and battery-operated two-wheelers; min. NMI Rs.5,000/-; or min NAI Rs.

60,000/-

3. Loan amount:

a) For salaried: 6 times NMI (net of all; d3educations including TDS)

b) For others:50% NAI as per IT Returan.

Margin:

A. All vehicles 15%

B. The sanctioning authority may reduce the margin in one of the following cases:

a) 5% if a check-off is available from a reputed employer.

b) 5% under the plus schemes.

c) 5% depending on the value of connection, details of which be mentioned

in the sanction.

Above relaxations can not be clubbed and a minimum margin of 10% for new vehicles and 15%

for used vehicles to be maintained.

Repayment Period & Mode:

All vehicles: maximum 36 months. For loans disbursed on or before 15th of the month;

the repayment date is fixed as 10th following months. For loans disbursed on or after 16th of the

month, the repayment date is fixed on 20th of the following month. Customer has option to repay

in shorter duration.

SBI Loans to Pensioners

47

Facility: Demand Loan

Objective and Purpose:

To meet personal expenses including medical expenses of pensioners.

Eligibility:

Central/State Govt. and Bank pensioners having their pension accounts with our Bank.

SBI pensioners also eligible. They should have pension a/c with the Bank. Pensioners drawing

pension from Govt. Treasury also eligible if they give mandate to treasury for payment of

pension through the branches.

Quantum:

Age- not more than 72 years; 12 times the net pension subject to a maximum of Rs. 1 lac.

Margin: Nil

Security:

The guarantee of the spouse who will be eligible for family pension or a suitable third

party should be obtained as prescribed.

Repayment:

Maximum 60 EMI for commencing 1 month after disbursal, for pensioners with age up to

70 years; 48 EMI for those above 70 years and up to 72 years.

General:

Bank’s pensioners and family pensioners are also eligible. No processing fee.

Loans to family Pensioners

Facility: Demand Loan

Objective and Purpose: same as SBI Loan to Pensioners.

Eligibility: the maximum age limit for family pensioner is 65 years.

48

Quantum:

Maximum 90 times the family pension or Rs.50,000/- whichever is lower. In no case the

EMI Should be more than 25% of the net pension drawn by the family pensioner.

Security:

Third party guarantee of a pension maintaining satisfactory conducted account at the

branch, preferably the son/daughter of the family pensioner must be obtained if the loan amount is above

Rs.25,000/-.

Rupee loans ti NRI employees of Indian companies under ESOP Scheme(RBI):

1. AD banks are allowed to grant Rupee loans to Non-Resident Indian (NRI’s) for

certain process, subject to condition, under FEMA.

2. Authorized Dealer Category –I banks can grant Rupee loans to NRI employees of

Indian companies for acquiring shares of the companies under the ESOP Scheme.

The loan scheme should be as per the policy approved by the Bank’s Board and

would further be subject to the following condition.

I. The loan amount should not exceed 90 per cent of the purchases price of the

shares Rs. 20lakhs per NRI employee, whicherver is lower.

II. The rate of interest and margin on such loans may be decided by the banks,

subject to the directives issued by the Reserve Bank from time to time.

III. The amount shall be paid directly by the bak to the company and should not

be credited to the borrower’s non-resident accounts in India.

Education Loan Schemes

IBA Educational Loan Scheme (Recommended by R.J.Kamath Commitee): all banks have

introduced it. In SBI, it is named as SBI Student loan.

Objective:

To extend need based financial assistance to deserving/meritorious students for

pursuing higher education in India and aborded with relaxations in security ann margin. It is a

49

model scheme prepared by IBA as advised by RBI and in pursuance of instructions of Ministry

of Finance.

Eligible Courses India:

Graduation, Post-Graduation and other approved courses. Ph.d, Engineering ,

Medical etc., Computer courses accredited to DOE/Universities. ICWA/CA, Chartered

Accountancy cource of ICAI, CFA, course by IIM/IIT,IISc,XLRI,NIFT etc. Teacher Training

courses/Nursing/BED course.

Abroad:

Professional, technical and Job-oriented courses offered by reputed foreign

universities, CIMA-London , CPA-USA, MCA,MBA,MS etc. List approved derecognized,

institutions by UGC/ AICTE is available on the official website WWW.uge.ac.in

WWW.aicte.ernet.in

Studen eligibility:

Should be an Indian national should have secured admission to

Professional/technical courses through entrance test. Secured admission in foreign Universities.

Minimum Qualifying:

No minimum qualifying marks in the last qualifying examination is stipulated.

Age of the Student:

Scheme does not restrict any age limit for the student availing the loan. Wherever

parents/ guardians are not there, grand parents may be considered as co-borrower taking into

account their net worth.

Maximum loan to a family:

Each ward of a parent/ guardian can avail loan as per his/ her eligibility subject to

availability of collateral security stipulated as per the scheme for the aggregate amount of loan.

50

Margin:

Up to 4 lakh Nil, above 4 lakh: for studies in India 5%, Studies abroad 15% . the

margin must be brought is on a year-to-year basis for loan above Rs.4 lacs. For studies abroad:

student to deposit 5000/- by B/C to be adjusted to margin/ interest/ commission if loan is not

availed. While arriving at the margin, only those expenses which are to be funded through the

loan amount may be considered.

In case co-obligated is defaulter, after satisfying about the back-ground of the

student and if margin, security, norms are met by the student; the defaulter/co-borrower should

be de-linked and replaced by another co-borrower. Also student failed in the last qualifying

examination and subsequently cleared and discontinued studies can also be considered for loan.

Home Loan

Housing Finance Target:

Of the incremental deposits in the previous year. The advance should be spread

over rural, semi-urban and urban areas. Also a cross-section of the society should be covered

under the scheme from economically weaker section to higher income group. The hosing finance

is spread among direct finance , indirect finance and investments in the bonds of NHB/HUDCO.

RBI has that taken –over housing loans should not be taken into account reckoning the 3%

housing finance.

Priority Sector Status:

a) Housing Finance granted under SIB/Agri . Segments as part of production advance has to

be classified under the appropriate segment. Housing loans to individuals would be

classified under P segment. Housing Loans u[ to Rs. 25 lakh granted at all branches are

now treated as PS advances. Loans for repairs up to Rs. 1lakh granted in rural and urban

areas and up to Rs. 2 lakh in urban metropolitan areas treated as P.S advances.

51

b) Loans up to Rs.25 lakh, irrespective of location, to individuals for purchases/

construction of a dwelling unit per family, excluding loans granted by banks to their own

employees.

c) Loans up to Rs.25 lakh to the damaged dwelling units of families up to Rs. 1 lakh and

semi-urban areas and up to Rs. 2 lakh in urban and metropolitan areas.

d) Assistance given to any governmental agency for construction of dwelling units foe slum

clearance and rehabilitation of slum dwellers, subject to a ceiling of Rs.5 lakh loan

amount per dwelling unit.

Eligibility Criteria:

Individuals and groups: Repayment linked to the age of the borrower. Minimum

age: now18. There is market demand from very young adults in view of rising incomes/ savings,

tax benefits, increasing appreciation of residential properties etc.

Project Cost:

Cost of land, registration, construction included; also furnishing and consumer

durables up to 10% of the loan amount or Rs.3 lakh whichever is less is included. The insurance

premium payable to SBI Life, if any, is not included but a separate account SBI suraksha is

opened .W.e.f February 12, Registration fee, Stamp Duty and documentation charges are not to

be included.

Loan to Value Ratio:

In order to increase the safety margin and minimize loss given default, the LTV

Ratio has been revised as under

Revised LTV Ratio (RBI policy)

52

For Individual Home loan

Loan amount House under construction House ready Discretionary

For possession power for concession

Up to Rs.20lakh 90% 90% Nil

above Rs.20lakh 80% 80% Nil

LTV Ratio for Advance Disbursement Facility:

Loan Amount LTV Ratio Discretionary Powers

to increase ratio

1.<Rs.1 crore 75% GM may increase up to 80%

2.>Rs.1 crore 75% CGM may increase up to 80%

For the purpose of calculation of LTV Ratio, the “Value” will be the assessed value of property

while “Loan Amount” may included cost of Stamp duty, registration. In effect “margin” will be

no longer defined as a prescribed percentage of the project cost. Rather, the loan amount will be

determined by prescribed LTV and the “Margin” will derive as project cost-minus loan amount.

SBI NRI-Car Loan Scheme: Changes (Only for New Cars)

The NRI’s/PIO’s nominee will be the principal applicant and the NRI/PIO will be

the guarantor.

Min income for borrower: No Stipulation , Age 21-654 years (for both)

Min income for guarantor: min US $ 12,000 p.a equivalent in other currencies

The growth of IT, ITES, BPO sector has resulted in a large number of NRI’s. a good number of

them, who are working overseas leave their families in India for long periods. Under NRI Car

Loan scheme, close relative of the NRI will be the borrower and the account will be guaranteed

by the NRI. Only new cars can be financed presently. The scheme in introduced at NRI intensive

branches.

53

SBI SARAL (simplified Personal Loan scheme)

The Personal Loan Scheme has been replaced by SBI Saral so that segment of

Public can be covered; also, the instructions regarding processes are made clear:

Purpose:

The scheme will cater to all P segment customers other than those covered under

Xpress Credit.

a) To meet sudden cater to all unanticipated needs of the persons for lump sum cash without

any stipulation about end use of funds.

b) Covers any legitimate purpose (eg. Expenses for domestic or foreign travel, medical

treatment of self or family, meeting any financial liability such as marriage of

son/daughter , defraying educational expenses of wards, meeting margin for purchases os

assets etc.,)

Eligibility:

a) Applicant should have sufficient cash flow to repay the loan – 6 months salary slips/

income tax returns of 2 years. Employee should have put in minimum I year service.

EMI/NMI should not be more than 50%.

b) Should satisfy KYC norms.

c) Should produce 6 months satisfactory statements of Bank Account at any bank; Credit

Card holders to submit 3 months statements.

d) Should score minimum 50 marks in the Credit Scoring Model.

Income:

Minimum Rs.5,000/- NMI (after all deductions including income tax): NMI for other Rs.

60,000/- as per latest IT return. Income of spouse can be considered for joint loan account.

Loan Amount:

Minimum: Rs.24,000/- in Metro & Urban areas

Rs.10,000/- in rural/ semi-urban areas

54

Maximum: 12 months NMI for salaried persons, 1 year NAI for others.

Ceiling Rs. 10lac in all centers subject to credit score of 50 or more.

Processing Charges:

@ 2.0% if the credit score is 60and above

@ 3.0% if the credit score is between 50 and 59

Security:

The loan is Clean and No Security should be taken. In case the borrower is able to

provide security, he will be financed under the relevant scheme corresponding to the nature of

security, eg. Mortgage loan against property, share loan against shares, security loan against

security etc.,

Type of Loan:

Term Loan.

Repayment period:

a) Repayable in EMIs in any period from 6.48 months as desired by the borrower.

b) 1% prepayment service charge recovered if loan is prepaid before 6 months.

c) The loan is renewed after 24 months or a separate loan granted provided EMI/NMI is not

more than 50%.

Mode of Payment:

a) Tie-up arrangement with the employer.

b) Obtaining standing instruction for recovering through salary.

c) A full set of PDCs for the entire period of loan to be taken.

Verification of address:

55

It can be done by the Branch staff or it can be outsourced. Verification report should be

compiled by:

a) Verification of address by actually visiting the residence of the borrower.

b) Verification of borrower’s office by actually visiting the office of the borrower.

c) Verification of borrower’s residence telephone number bu actually calling

residence phone number.

d) Verification of I.T returns with I.T Department where feasible. where I.T returns

cannot be verified, bank statement of account of the borrowers may scrutinized

verify the income returns flows.

SCOPE OF PERSONAL-SEGMENT LOAN PRODUCTS:

A personal loan is and should be taken to tide over emergencies only. It should

not be taken on whims or just because one feels like splurging. They carry high interest rates or

if it is a secured personal loan than you may lose your collateral.

If you are self-employed or salaried , there may be times when you need instant

cash for emergencies of different kinds, then you could go for a personal loan. Timing and speed

are vital factors while choosing a personal loan across various institutions.

Numerous uses of personal loans are domestic and foreign travel, medical

treatment for self or family members, education, marriage, business expansion working capital,

working requirement and meeting margin money for purchase of assets an so on and so forth.

FEATURES:

1. Some lenders offer secured loans while other doesn’t have any eligibility criteria.

2. Minimal paper work

3. Some banks provide loans only to salaried people and not to self employed individuals.

4. Some institutions take few hours to process the loan, other may take 3-4 days including one

day for filed investigations.

5. Personal loans are available up to rs.20lakh depending on the type of institutions or bank.

56

6. the credit information report ( CIR) play a crucial role in a lenders decision to approve a loan

application.

Easy loans:

A concern having adequate working capital solvency and good credit standing can

arrange land from banks and others on easy favorable terms.

Cash discount:Adequate working capital also enables a firm to avail cash discounts on the

purchases and hence it reduces costs.

Regular supply of Raw materials:

Sufficient working capital ensures regular supply of Raw materials and

continuous production.

Exploitation of favorable Market conditions;

Only concerns with adequate working capital can exploit favorable market

condition such as purchasing it requirements in bulk when the prices are lower and by holding it

inventories for higher prices.

7. Ability to face crisis:

Adequate working capital enables the firm to face business crisis in emergencies

such as depression because during such period, generally there is much pressure working capital.

57

58

CHAPTER-4

PRACTICAL STUDY ON MARKET P-SEGMENT

LOAN PRODUCTS

The emergence of middle class with high purchasing power in the last 20/

25 years has contributed to the consumer boom. The demand for consumer credit has been rising

steadily and our Bank has responded with attractive schemes of credit. The SBI. Card is being

promoted in a big way. There is stiff competition from foreign banks, corporate institutions,

mutual funds, credit card organizations etc in the P segment. In this segment deposits can be

attracted by providing to the consumer a range of services including credit to acquire assets/

meet expenses. More importantly, customer - friendly and modern banking facilities like ATM’s,

e-banking, demit services, credit cards, insurance products, mobile banking, internet banking, e-

broking etc., should be extended to young/high net worth customers. Profit from C&I segment

are getting thinner and hence retail banking i.e. advances to PB customers is increasingly

becoming an important income earning activity. Further, the credit growth for industrial

activities has been very sluggish in the last few years especially, in the last 2 years. Satisfied PB

Segment customers can be regarded as Ambassadors opening up the gates of business for C & I,

SIB and Government Sectors.

59

Saral scheme with attractive features, liberalized Education loans, the Home loans

and Car loans with many variants and plus schemes will help attract sizeable business from

identified sub-segments.

Advances under P Segment are not priority sector advances except Educational

loans and Housing loans (subject to limits). Staff are not eligible for these advances generally.

Loan amount has to be disbursed to suppliers/educational institutions etc by means of bankers

cheque . while stipulating repayment installments, generally it should be ensured that the total

deducations/ repayments shall not exceed 30% of the salary. physical insepection of assets has

been waived except for motor vehicles. The customer has to give Annual possession certificate

in respect of the assets purchased.

Interest rate of some various Banks

Home Loan

S.no Name of the Bank Loan amount Rate ofInterest

Repayment

1 State Bank of India Up to30 lacksAbove 30 lacks

9.95%10.10%

Maximum 30 years

2 State Bank of Hyderabad

Up to 30 lacksAbove 30 lacks

10.50%10.70%

20 years

3 Bank of India Up to 30 lacks 30 lacks to 75lacksAbove 75 lacks

10.25%10.35%10.5%

20 years

4 Canara Bank Up to 30 lacksAbove 30 lacks

10.5%11%

5-15 years10-20 years

5 Vijaya Bank For salaried 60 times of gross.For others 60

times of average monthly income of pass 2 years

BPLR 9.25% 20 years

6 Indian Bank Up to 30 lacks30 lacks to 75

lacks

10.20%10.45%10.70%

25years

60

Above 30 lacks7 Karur Vysya Bank Up to 20 lacks 10.75+0.5% 15-25 years

As on 10th may 2013

Car Loan

S.no Name of the Bank Loan amount Rate ofInterest Repayment

1 State Bank of India 85% on Vehicle Cost 10.45% 7 years

2 State Bank of Hyderabad 85% on Vehicle

Cost

10.95% 7 years

3 Bank of India

25 lacks (Indian)75 lacks (Import)

12.75%11.75% 5 years

7 years

4 Canara Bank 90% on Vehicle Cost 10.25% 4 years

5 Vijaya Bank 80% on Vehicle Cost BPLR 0.50% 7 years

6 Indian Bank75% on Vehicle cost(New cars)75% on Vehicle

10.70%13.45%

7years7 years

61

cost (used cars)

7 Karur Vysya Bank

75% on Vehicle cost(New cars)75% on Vehicle cost (used cars)

10.75+1.25%10.75+3.25%

7 years5 years

As on 10th may 2013

Education Loan

S.no Name of the Bank Loan amount Rate ofInterest Repayment

1 State Bank of India

Up to 4 lacks4 lacks to 7.50

lacksAbove 7.50 lacks

13.20%13.45%11.45%

Course Period+1year or

6 months

2 State Bank of Hyderabad

Up to 4 lacks4 lacks to 7.50

lacksAbove 7.50 lacks

15.20%13.20%12.75%

Course Period+1year or

6 months

3 Bank of India

Up to 4 lacks4 lacks to 7.50

lacksAbove 7.50 lacks

12.75% Course Period+1year or

6 months

4 Canara Bank

Up to 7.5 lacks (in India)

Above 7.5 lacks (Abroad )

13%13%

Course Period3 to 5 years

5 Vijaya Bank

Up to 4 lacks4 lacks to 7.50

lacksAbove 7.50 lacks

BPLR+1.25% 5-10 years

6 Indian Bank Up to 4 lacks4 lacks to 7.50

lacks

12.50 Course Period+1year or

6 months

62

Above 7.50 lacks

7 Karur Vysya Bank

Up to 7.5 lacks (in India)

Above 7.5 lacks (Abroad )

BR+3%BR+3.5%

Course Period+1year or

6 months

As on 10th may 2013

Loans to Pensioners

S.no Name of the Bank Loan amount Rate ofInterest Repayment

1 State Bank of India

Up to 3 lacks (effective

pensioners)Normal

pensioners 1lacks

9.70%

36 months(Up to 70 years age)

24 months (70-72 years age)

2 State Bank of Hyderabad Up to 1lack 9.70% 36 months

3 Bank of India Up to 1 lack 14.70% 36months

4 Canara Bank Up to 1 lack 15.50% 36 months5 Vijaya Bank - - -

6 Indian BankDepending up on

the Pension amount

14.20% 36 months

7 Karur Vysya Bank - - -Two-Wheeler Loans

S.no Name of the Bank Loan amount Rate ofInterest Repayment

1State Bank of India 6 times of net

monthly income margin 15%

17.95% 36 months

2 State Bank of 6 times of net 17.45% 7 years

63

Hyderabad monthly income margin 15%

3 Bank of India - - -

4 Canara Bank 80% vehicle cost 11.5% 3-5 years

5 Vijaya Bank maximum 50,000 BPLR+0.50% 84 EMI

6 Indian Bank 75% on Vehicle cost 12.95% 7 years

7 Karur Vysya Bank 75% on Vehicle cost BR+5% 36 months

As on 10th may 2013

Festival Loans

S.no Name of the Bank Loan amount Rate ofInterest

Repayment

1 State Bank of India Loan for Public 5000 minimum, maximum 50,000(for Staff)

6.75% above base rate 16.45%No interest only

for Staff

12 months

2 State Bank of Hyderabad

50,000(for Staff) Only for StaffNo interest

10 months

3 Bank of India - - -

4 Canara Bank - - -

5 Vijaya Bank - - -6 Indian Bank - - -7 Karur Vysya Bank - - -

Gold Loan

S.no Name of the Bank Loan amount Rate ofInterest Repayment

1State Bank of India Up to 1 lack

Above 1 lack13.95%14.45%

36 monthsDemand loan

2 State Bank of Hyderabad

Up to 1 lackAbove 1 lacks

12.75%12.95%

12 months12 months

64

3 Bank of India

20 lacks Branch Sanctions

Agriculture gold loan 3 lacks limit

13%

7%

12 months

12 months

4 Canara Bank Up to 50,000Above 50,000

9%10.25%

12 months12 months

5 Vijaya Bank Depending up on the gold BPLR+0.25% 12 months

6 Indian Bank 1 gram 1800/- no limit 14% 12 months

7 Karur Vysya Bank - - -Loan against NSCs, KVPs, RBI, LIC

S.no Name of the Bank Loan amount Rate ofInterest

Repayment

1 State Bank of India 40% of face bond value+ interestLIC 5% on Surrounded value

14.75%Demand loan

14.75%

Any time demand to pay

Any time demand to pay

2 State Bank of Hyderabad

80% on Bond Value

13.45% Interest part paid

3 Bank of India 75% On Bond value (NSCs,

KVPs) In surround

value LIC 75%

13.25%

13.25%

Interest part paid

Interest part paid

4 Canara Bank - - -

5 Vijaya Bank - - -6 Indian Bank 75% on Bond

Value(KVPs, NSCs)

In surround value LIC 75%

12%

16.45%

Interest part paid

Interest part paid

7 Karur Vysya Bank 75% on Bond Value(KVPs,

NSCs)

BR+5% 36 months

As on 10th may 2013

65

The present study is conducted among the customer who are currently receiving

Personal Loans and Previously received Personal Loans from State Bank of India and Other

Banks. Total 100 customers are surveyed and they belong to different occupations, different

ages. During this study focus is given to compare the Customer Satisfaction about Loan Products

among different Public and Private Sector Banks

TABLE-4.1-Occupation of respondents

S.no Occupation Number Percentage1 Self Employed 43 43%2 Salaried Employees 32 32%3 Students 2 2%4 Retired employees 7 7%5 House Wife 13 13%6 Professionals 3 3%

Total 100 100%

Interpretation:

Table 4.1 describes the Occupation of the respondents. 43 percentage of the respondents are Self employed, 32 percentage of respondents are Salaried Employees, 13

66

percentage of respondents are House wife’s and 3 percentage of respondents are Professionals and 2 percentage respondents are Students.

Table 4.2-Classification of Respondents as per Age

S.no Age Number Percentage1 20-40 41 41%2 41-60 51 51%3 Above 60 8 8%

Total 100 100%

Interpretation:

Table 4.2 among the total respondents 51 percent are within the group of 41-60 years, 41 percent are within the age group of 20-40 years, 8 percent of the Customers are above 60 years of age.

67

The above data indicates the high participation of younger people in the banking operation which is a favorable trend.

Table-4.3-Regular Banker

S.no Regular transactions Number Percentage

1 SBI 74 74%2 ICICI 4 4%3 HDFC 7 7%4 Other Banks 15 15%

Total 100 100%

Interpretation:

Table 4.3 it is understand that. 74 percent respondents are SBI account holders, 4 percent of the respondents are ICICI account holders, 7 percent of the respondents are HDFC account holders and 15 percent of respondents are Other Bank account holders.

The above figure reflect the dominance of SBI in the banking industry.

68

Table-4.4-Customer for a Period of ( for SBI)

S.no Year of Transactions Number Percentage1 Less than 1 year 1 1.352%2 1 to 5 years 21 28.38%3 6 to 10 years 34 46%4 11 to 20 years 13 17.625 Above 20 years 5 6.78%

Total 74 100%

Interpretation:

From Table 4.4 I found that 34% of the customers are transacting with SBI for period of not less than 6 years but not more than 10 years. 21% of the customers are transacting

69

with SBI for period of not less than 1 year but more than 5 years. 13% customers are truncating with SBI for period of not less than 11 years but more than 20 years.

Table 4.5-Customer for a Period of

( For Other Banks)

S.no Period of Transactions Number Percentage1 Less than 1 year 1 3.84%2 Up to 5 years 15 57.7%3 Above 5 years 10 38.5%

Total 26 100%

Interpretation:

70

Among Table 4.5 customer for a period of for Other Banks. Less than 1 year period is 3.84 percent, up to 5 years period of account holders are 57.7 percent, above 5 years period of account holders 38.5 percent.

Table 4.6-Awareness about Products & Services

S.no Response Number percentage

1 Yes 62 62%2 No 38 38%

Total 100 100%

Interpretation:

Table 4.6 shows awareness about Products and Services response in 62% respondent’s are aware about Products and Services and 38% respondents are not aware about Products and Services.

71

This tells the need for providing awareness programs to make the banking services.

Table 4.7-Awareness about P-Segment Products

S.no Response Number Percentage

1 Yes 53 53%2 No 47 47%

Total 100 100%

Interpretation:

Table 4.7 among the total respondents awareness about P-Segment Products is 53 percent account holders are aware about P-Segment Products and 47 percent of account holders are not awareof P-Segment Products.

72

This shows the need for focus on the account holders than to awareness about P-Segment Products of SBI.

Table-4.8-Preferred Bank for Loan Products & Services

S.no Name of the Bank Number Percentage1 SBI 64 64%2 ICICI 4 4%3 HDFC 7 7%4 Other Banks 25 25%

Total 100 100%

Interpretation:

Table 4.8 Classification of about preferred bank for Loan Products and Services. 64% respondents are preferring to SBI account, 4% respondents are preferring ICICI accounts,

73

7% respondents are preferring HDFC accounts and 25% respondents are preferring Other bank accounts.

Above data tells need to provide excellent products and make advertising because to attract more customers in future.

Table-4.9-Availability of Information for Loans

S.no Response Number Percentage1 Yes 63 63%2 No 37 37%

Total 100 100%

Interpretation:

74

Table 4.9 explains about the availability of information on loan products from various banks. 63 percent of respondents thought that Information is available for loans and 37 percent of respondents thought that Information is not available for Loans.

This data shows the need for more focus on providing the information to the account holders and motivate them for applying loans.

Table-4.10-Classification of customer by type of loansfor this Loan Product

( SBI Customers)

S.no Name of the Loan Number Percentage1 Home Loan 28 37.9%2 Education Loan 6 8.2%3 Car Loan 5 6.8%4 Pension Loan 7 9.5%5 Other Loan 28 37.9%

Total 74 100

Interpretation:

75

Table 4.10 shows customer for this loan products (for SBI customers) respondents. 37.9% respondents are Home Loan, 8.2% respondents are Education Loan, 6.8% respondents are Car Loan, 9.5% respondents are Pension Loan and 37.9% respondents are Other Loans.

So provide and made different types of loan awareness programs because many people are not aware loan products that type of programs are improve customers knowledge.

Table 4.11-Customer for this loan Product

(For Other Banks)

S.no Name of the Loan Number Percentage1 Home Loan 4 15.4%2 Car Loan 4 15.4%3 Gold Loan 4 15.4%4 Pension Loan 5 19.3%5 Other Loans 9 34.64%

Total 26 100%

Interpretation:

76

Table 4.11 shows customer for this loan products (for Other Bank customers) respondents. 37.9 percent respondents are Home Loan, 15.4 percent respondents are Gold Loan, 15.4 percent respondents are Car Loan, 15.4 percent respondents are Pension Loan and 34.64percent respondents are Other Loans.

Table-4.12-level of Satisfaction about Bank Services (SBI)

S.no Response Number Percentage1 Excellent 23 23%2 Good 56 56%3 Satisfy 21 21%4 Bad 0 0%

Total 100 100%

Interpretation:

77

Table 4.12 among shows Satisfaction about bank Services (SBI). 23 percent respondents are Excellent, 56 percent respondents are Good and 21 percent respondents are Satisfy about Banking Services.

This above data shows that implemented to bank Services

Table 4.13-Level of Satisfaction about Bank Services (Other Banks)

S.no Reponses Number Percentage

1 Excellent 3 25%2 Good 8 67%3 Satisfy 1 8%4 Bad 0 0%

Total 12 100%

Interpretation:

78

Table 4.13 among shows Satisfaction about bank Services (Other Banks). 25 percent respondents are Excellent, 37 percent respondents are Good and 8 percent respondents are Satisfy about Banking Services

Table-4.14-Reasons for preference of SBI P-Segment loan products(for SBI)

S.no Feature Number Percentage 1 Less paper work 11 13%2 Attractive Interest Rates 27 31.77%3 Transparency 8 9.42%4 Single Processing 3 3.53%4 Fast Processing 12 14.12%5 Flexible to choose to EMI 9 10.59%6 Longer Tenure 9 10.9%7 Specially designed loan products 6 7.16%

Total 85 100%

Interpretation:

79

Table 4.14 classification of total respondents reasons for SBI Personal Loans. 13 percent less paper work, 31.77 percent Attractive interest rates, 9.42 percent Transparency, 3.53 percent Single Processing, 14.12 percent Fast Processing, 10.59 percent Flexible choose to EMI and Longer Tenure and 7.16 percent Specially designed Loan Products.

Table-4.15-Customer like features in P-Segment(for Other Banks)

S.no Feature Number Percentage 1 Less paper work 2 13.34%2 Attractive Interest Rates 2 13.34%3 Transparency 3 20%4 Single Processing 1 6.66%5 Flexible to choose to EMI 1 6.66%6 Longer Tenure 2 13.34%7 Specially designed loan products 4 26.68%

Total 15 100%

Interpretation:80

Table 4.15 classification of total respondents reasons for SBI Personal Loans. 13.4 percent less paper work, Attractive interest rates, Longer Tenure, 20 percent Transparency, 6.66 percent Single Processing, Flexible choose to EMI and 26.68 percent Specially designed Loan Products.

Table-4.16-Bankers provide Full Information on Loans

S.no Satisfy Number Percentage

1 Yes 74 74%2 No 26 26%

Total 100 100%

Interpretation:

Table 4.16 among the total respondents of Bankers Provide full Information on Loans 74 percent respondents are satisfy, 26 percent respondents are not satisfied on bank information.

Above the data shows the need for much more focus and motivate and provide information of full information of loans.

81

Table-4.17- Impact of completion on important services

S.no Improved Number Percentage

1 Yes 64 64%2 No 36 36%

Total 100 100%

Interpretation:

Table 4.17 among the total respondents of banks has improved because of competitors. 64 percent respondents are improved because of competitors, 36 percent respondents are satisfy.

82

Table-4.18-Satisfied with Online Services

S.no Satisfy Online Services

Number Percentage

1 Yes 88 88%2 No 12 12%

Total 100 100%

Interpretation:

Table 4.18 describes the total respondents are satisfaction with Online Services 88 percent respondents are Satisfied, only 12 percent respondents are not to satisfy with Online services because of Educational problem.

83

Table-4.19-Preferred Bank

S.no Bank Number Percentage

1 Private Sector 12 12%

2 Public Sector 88 88%Total 100 100%

Interpretation:

Table 4.19 classified total respondents of preferred bank. 88 percent of respondents are choose Public Sector Banks, 12 percent of respondents are choose Private Sector Banks.

84

Table 4.20-Reasons for Preferring Public Sector Banks

S.no Reason Number Percentage1 Security 34 38.64%2 Low interest rates 22 25%3 Fast Processing 10 11.37%4 Longer Tenure 9 10.3%5 Transparency 7 7.96%6 Attractive Loan Products 3 3.41%7 Good Response 3 3.41

Total 88 88%

Interpretation:

Table 4.20 described the reasons for preferring Public Sector banks. 38.64 percent security, 25 percent Low interest rates, 11.37 percent Fast Processing, 10.3 percent Longer

85

Tenure, 7.96 percent Transparency, 3.41 percent Attractive interest rates and Good response from employees.

This above data shows need more focus improve Public Sector features and introduced many products for customers.

Table 4.2-Reasons for Preferring Private Sector Banks

S.no Reasons Number Percentage1 Attractive Loan Products 3 25%

2 Good Response of Employees

6 50%

3 Fast Processing 3 25%Total 12 100%

Interpretation:

86

Table 4.21 shows that reasons for preferring Private sector banks. 50 percent Good response from employees, 25 percent Attractive Loan Products and Fast Processing.

OBSERVATIONS

Customers are very interested to take account from SBI because State Bank is

guarantee and under the RBI.

This is a boon to customers and even it is environment friendly. Many customers do not know about this kind of services. This kind of services should be extended to many more branches, specially where there is huge rush. It reduces the process time.

Most of the customer leaves the bank satisfied. the satisfaction level of the

customers is good.

Customers trust the brand name of SBI and want to continue banking with it.

Some customers are not satisfy of Personal loan interest rates.

Some customers are interested to taking service for other banks why because of they are giving high interest rates on deposits.

A complaint made by the customer is not attended immediately.

It is also observed that while transparency facility is being through mobiles some of the people are not satisfy. Take lot of time to respond which causes inconvenience to customers.

There is no help desk at some branches where there is much floating. So the customers are left unattended.

87

CHAPTER-5

88

Conclusion

There has been a phenomenon growth in the financial position and marketing position in

State Bank of India. This increase also let to serve competition among the other Banks. Some of the

customers are not awareness of Online Services because of education problems so bank employees

are giving suggestion about Online Services. Customers are dissatisfied on the Personal loans why

because interest rates are changing more times. An employee responding is very irrespective with

customers. But very high numbers of customers are taking only State Bank of India Products

Otherwise they have to face sever marketing troubles. In the more of competitors the State Bank of

India have to plan and implement suitable, appropriate policies in order to strengthen their marketing

and implemented of taking loans which is seen through the Market P-Segment Loan Products.

The study has tabulated the performance of State Bank of India. It enables the State Bank of

India’s Loan products rating is increasing.

The overall performance of State Bank of India has been satisfactory.

89

Recommendations

a. This Survey shows need for much more motivated on the Students and Professionals and

repaired employees then to other account with SBI banks.

b. Organization is need to focus and motivate to taking Loans from SBI.

c. This among the need for much more focus on the retired employees and motivate then to

other account with the SBI Bank.

d. Public Sector features and introduced many products for customers.

e. Above the data shows the need for much more focus and motivate and provide

information of full information of loans.

f. This data shows the need for more focus on the account holders and motivate availability

of Information for Loans.

g. Employees should report the customers in a friendly and courteous manner,so that proper

and healthy relationships are built between the employees and the customers

h. Any customer,let it be literate or illiterate should have a rough idea of all the products and services that are being provided by the bank. Employees should educate the customers regarding the services.

i. Branch manager should always be pleasant and should always motivate the staff

members. He should be concerned about the staff and should be in a friendly manner.

j. Need to Train the staff to be courteous and helpful to customers.

90

Bibliography

www.Google.com

WWW.SBI.com

SBI Promotion Books

91

ANNEXURE

Market P-Segment Loan Products

QUESTIONNAIRE

Name :

Occupation :

Age :

1. On which bank you depend for your regular transactions?

A) SBI

B) ICICI

C) HDFC

D) Any other bank specify

2. How Long you have been Customer in SBI--------------- years

3. Are you aware of the products & services offered by SBI

A) YES

B) NO

4. If yes are you aware of the advance products from P-Segment of SBI

A) YES

B) B) NO

5. Which bank you prefer for taking services?

A) SBI

B) ICICI

C) HDFC

D) Other bank specify

92

6. If you prefer SBI for taking loans then what you prefer information to take loan from SBI

A) YES

B) NO

7. Which loan product of SBI you have used?

A) Home Loan

B) Education Loan

C) Car Loan

D) Pension Loan

E) Other Loans

8. What do you feel about the services providing by SBI in advance products

A) Bad

B) Satisfy

C) Good

D) Excellent

9. Which features you like most in loan segment of SWBI

A) Less paper work

B) Attractive interest rate

C) Transparency

D) Single processing

E) Fast processing

F) Flexibility to choose an EMI

G) Longer tenure

H) Specially designed loan products

I) Any other

J) Any suggestion

10. Are you satisfy with the information by the bank authorities receiving loan products

A) Yes

B) No If no state the reason

a) -------------------------------

93

b) -------------------------------

c) -------------------------------

11. Do you think that the services offered by the bank have improved because of

competitors.

A. Yes

B. No

12. Are you satisfied with the Online services provided by the banks.

A. YesB. No

If No state the reasona)--------------------------------b)--------------------------------c)---------------------------------

13. In your opinion which banks are preferable for applying loans

A. Private sector

B. Public sector

14. If Private Sector why?

A) -----------------------

B) -----------------------

15. If Public Sector why?

A) --------------------------

B) --------------------------

94