INDUSTRY PROFILE Banking Industry in India:The world economy today is driven by the way the banks in the world

perform. The economical position of the country is also driven by the performance of banks. Banks, by extending their services to areas hitherto untouched and making themselves accessible to the common man, have become a part of our lives. The banking institutions in the past performed very limited functions such as receiving deposits against bank notes and then issuing notes in the country, as the time advanced and with the progress of commerce and industry, the scope of banking also expanded. Modern banking institution is a large corporate giant with large resources and a vast field of activity. Since the nationalization of some big commercial banks in India in the year 1969, there has been a great surge of banking industry throughout the world with the growing number of banking offices. The banking business today has become highly critical and competitive between various classes of banks in offering a greater variety of services nationally and internationally. With globalization setting in, banks are also modernizing operations with a view to satisfying modern customers with an aim to improve bank operations with a view to maintain high standard banking system that involves applications of better management techniques. In India, class banking has given way to mass banking, bringing in its fold very large number of customers. Banks are now looked upon as development agents instead of purveyors of credit to the large industries and big business companies. Apart from providing credit to trade, industry and agriculture it is also involved in offering pension for retired employees, government servants and collection of utility bills.

The Indian banking system can be classified into nationalized, private and specialized banking institutions. The industry is highly fragmented with 30 banking units contributing to almost 50%of deposits and 60% of advances. The Reserve Bank of India is the foremost monitoring body in the Indian Financial sector. It is a centralized body that monitors discrepancies and short comings in the system. Industry estimates indicate that out of 274 commercial banks operating in the country, 223 banks are in the public sector and 51 are in the private sector. These private sector banks include 24 foreign banks that have begun their operations here. The specialized banking institutions that include cooperatives, rural banks, etc. form a part of the nationalized banks category The Indian banking system is financially stable and resilient to the shocks that may arise due to higher non-performing assets (NPAs) and the global economic crisis, according to a stress test done by the Reserve Bank of India (RBi). Significantly, the RBI has the tenth largest gold reserves in the world after spending US$ 6.7 billion for the purchase of 200 metric tones of gold from the International Monetary Fund (IMF). The purchase has increased RBIs share of gold holdings from approximately 4% to 6%.In the annual international ranking conducted by UKbased Brand Finance Plc,20 Indian banks have been included in the Brand Finance Global Banking 500. The State Bank of India has become the first Indian bank to be ranked among the Top 50 banks in the world, capturing the 36th rank, as per the Brand Finance study. The brand value of SBI increased from US$ 1.5 billion in 2009 to US$ 4.6 billion in 2010.ICICIBank also

made it to the Top 100 list with a brand value of US$ 2.2 billion. The total brand value of the 20Indian banks featured in the list stood at US$ 13 billion. Following the recent financial crisis, new deposits have gravitated towards the public sector banks. According to RBI's 'Quarterly Statistics on Deposits and Credits of Scheduled Commercial Banks :December 2009, nationalized banks, as a group, accounted for 50.9% of the aggregate deposits, while State Bank of India and its associates accounted for 23.4%. The share of other scheduled commercial banks, foreign banks and regional rural banks in aggregated deposits were 17.1%, 5.5% and 3% respectively. With respect to gross bank credit, nationalized banks hold the highest share of 50.6% in the total bank credit, with SBI and its associates at23.8% and other scheduled commercial banks at 17.8%. Foreign banks and regional ,rural bank shad a share of 5.3% and 2.5% respectively in the total bank credit. The confidence of non-resident Indians (NRIs) in the Indian economy is reviving again. NRI deposits have increased by nearly US$ 47.8 billion on March 2010, as per the RBIs June 2010 bulletin. Most of this has come through Foreign Currency Non-resident (FCNR) accounts and Non-resident External Rupee Accounts. Foreign exchange reserves were up by US$ 1.69 billion to US$ 272.8 trillion, for the week ending June 11, on account of revaluation gains. June 21,2010

COMPANY PROFILE CanaraBank :

A good bank is not only the financial heart of the community, but also one with an obligation of helping in every possible manner to improve the economic conditions of the common people

a. BACKGROUND AND INCEPTION OF THE COMPANY

Canara Bank was founded by ShriAmmembalSubbaRaoPai, a great visionary and philanthropist, in July 1906, at Mangalore, then a small port in Karnataka. It was started as 'Canara Bank Hindu Permanent Funds in 1906. This small seed blossomed into a limited company as' CanaraBank Ltd .' in 1910 with its head office in Bangalore. The Bank has gone through the various phases of its growth trajectory over the hundred years of its existence. In1958, the Reserve Bank of India (RBI) ordered Canara Bank to acquire G. RaghumathmulBank,in Hyderabad. This bank had been established in 1870, and had converted to a limited company in 1925. At the time of the acquisition the bank had five branches. The growth of Canara Bank was phenomenal, especially after nationalization by the Government of India along with 13 other major banks in the country in the year 1969.It has attained the status of a national level player in terms of geographical reach and clientele segment . In 1976, Canara Bank inaugurated its 1000th branch.

Eighties was characterized by business diversification for the Bank. In the year 1985 Canara Bank opened its first overseas office in London and also established a subsidiary in Hong Kong, Indo Hong Kong International Finance Ltd and opened its third foreign branch, this one in Shanghai. It has established in the areas of mutual funds, venture capital and factoring .It is the First Bank to be conferred with ISO 9002 certification for one of its branches in Bangalore and is the maiden bank to start Initial Public Offering (IPO). It has launched internet and mobile banking services. In June 2006, the Bank completed a century of operation in the Indian banking industry. This event full journey of the Bank has been characterized by several memorable milestones. Today ,Canara Bank occupies a premier position in the comity of Indian banks. With an unbroken record of profits since its inception, Canara Bank has several firsts to its credit. These include Launching of Inter-City ATM Network Obtaining ISO Certification for a Branch Articulation of Good Banking Banks Citizen Charter Commissioning of Exclusive Mahila Banking Branch Launching of Exclusive Subsidiary for IT Consultancy Issuing credit card for farmers Providing Agricultural Consultancy Services

Over the years, the Bank has been scaling up its market position to emerge as a major 'Financial Conglomerate' with as many as nine subsidiaries/sponsored institutions/joint ventures in India and abroad.

Can fin Homes Limited Can bank Factors Limited Can bank Venture Capital Fund Limited Can bank Computer Services Limited Gilt Securities Trading Limited CanaraRobeco Asset Management Company Limited Can bank Financial Services Limited Canara HSBC Oriental Life Insurance Company Limited

As at March 2010, the Bank has further expanded its domestic presence, with 3043 branches spread across all geographical segments. Keeping customer convenience at the forefront, the Bank provides a wide array of alternative delivery channels that include over 2000 ATMs- one of the highest among nationalized banks- covering 728 centers, 1959 branches providing Internet and Mobile Banking (IMB) services and 2091 branches offering' Anywhere Banking' services. Canara bank made a partnership with UNEP to initiate a successful solar loan program. It was a four-year $7.6 million effort, launched in April 2003 to help accelerate the market for financing solar home systems in southern India. Canara Bank had a major IT initiative to network all branches and move them to a single software platform. Canara Bank chose Flex cube from I-flex solutions as the application. The Bank entered into an agreement with IBM for rolling out flex cube to over 1000 branches as part of Phase I. The all India network of Canara Bank boasts of multiple branches in all the major cities like Chennai, Pune , Bangalore, Mumbai, New Delhi, Gurgaon , Kolkata, Lucknow and Hyderabad. The Canara Bank official site gives us an ATM and branch locator that can give you the exact location and address of your nearest Canara Bank branches and ATM's

b.NATURE OF THE BUSINESS CARRIED

Canara Bank is a Public Sector Company undertaking which is running under the Administrative Control of Govt of India. The total share capital is Rs 410 crores of which government capital is 300 crores, others Rs 110 crores and, the total business of the Bank reached 403,986 crore. Canara Bank was ranked at 1299 in the Forbes Global 2000 list. Canara bank offers its services to the industry, NRIs and all the classes of people such as Personal Banking, Corporate Banking, NRI banking, Priority credit and other services etc. It has come to the forefront of the commercial and financial services and established a leadership in the financial services. The Bank has also carved a distinctive mark, in various corporate social responsibilities, namely, serving national priorities, promoting rural development, enhancing rural self-employment through several training institutes and spearheading financial inclusion objective.

c. VISION , MISSION AND QUALITY POLICY

VISION
To emerge as a Best Practices Bank by pursuing global benchmarks in profitability, operational efficiency, asset quality, risk management and expanding the global reach.

MISSION
To provide quality banking services with enhanced customer orientation, higher value creation for stakeholders and to continue as a responsive corporate social citizen by effectively blending commercial pursuits with social banking.

QUALITY POLICY
To remove Superstition and ignorance. To spread education among all to sub-serve the first principle. To inculcate the habit of thrift and savings. To transform the financial institution not only as the financial heart of the community but the social heart as well. To assist the needy. To work with sense of service and dedication. To develop a concern for fellow human being and sensitivity to the surroundings with a view to make changes/remove hardships and sufferings

d. PRODUCTS AND SERVICES OF CANARA BANK

(Table 1) Priority and Credit Schemes SME Business

Personal Banking Savings and Deposits Loan Products Technology Product Mutual Funds Insurance Business International Service Card Service Consultancy Service Depository Service

Corporate Banking Account and deposits Cash Management Service Loan and Advance Syndication Service IPO Monitoring Activity Merchant Banking Service TUF schemes Canara e-tax

NRI Banking Deposits Products Loan and Advances Remittance Facilities Consultancy Service Other Service

SME

RRB Division Agri- Marketing Agri Consultancy Rural Development Social Banking CED for Women One time settlement for M and S E

Ancillary Service

Personal Banking
Deposits Current account Fixed deposits Recurring deposits Kamdhenu deposits Canara Flexi Deposit Savings bank gold Canara champ deposit scheme Canarasaral savings account Canara tax saver scheme Ashraya deposit scheme Canara bank Auto Renewal deposit Canara super savings salary account Savings Deposits 5 card service Canaravis a classic Canara global gold card Canara corporate

(Table 2) 2 Loan products Housing loan 3Credit service 4Consultancy Cash credit for Tax assistance working capital service Home Bill discounting Trustee service improvement loan private and charitable Canara cash Bank guarantee Debenture trusteeship (shares) Canara mobile Loan for SMEs Security trusteeship vehical Canara site loan Finance to SSIs Attorney ship Agricultural loan Estate service and will

Teachers loan Canara budget-Personal loan Canara pensions Canara rent Canara Trade Canara mortgage Doctors choice

Education loan Swarna loan 6 Mutual funds 7Ancillary service CanaraRobecoMFproduct Safe deposit lockers

8 Other service Insurance (life and general) Safe custody Technology services products(ATM) 7day banking Depository service DD shoppe Extended banking hrs

Corporate Banking (Table 3)

Account and deposits Current deposits Fixed deposits Kamdhenu deposits Recurring deposits Cash management service Super fast service Bulk collection service Fast track service Loans and advances Term loans Gold card scheme for exporters Infrastructural financing Working capital finance Export finance Other service Canara e-tax TUF scheme Merchant banking service IPO Monitoring activity Syndication service

NRI Services (Table 4)

Deposits products NRE (nonresdident external rupee) account NRO(nonresident ordinary) account FCNR (foreign currency non resident) account Loans and Remittance Consultancy advance facilities service Housing loan CAN bank remit NRI consultancy money scheme Other service Safe custody

Home improvement loan CAN jewel

Bank Western union remittance scheme Swift

Safe locker

deposit

Nomination facility Investment Attorney ship service NRI service centre Facilities for Returning Indians

CAN cash Rupee drawing (shares) arrangement CAN mortgage CAN mobile (vehicle) CAN site

Loan against deposits

Priority Credit Finance

(Table 5) Rural Development scheme Rural service Others

Agriculture and Education loan RRB Division rural credit and other scheme priority sector loan Kisan credit card Loan for Pragatigrameen students bank

Loan for clinics

agri-

Minor irrigation loan Farm development loan Gold loan agricultural purpose KisanTatkal for

clinic GOVT. Sponsered scheme (SJSRY and SGSY) LaghuUdyami South Malabar Rural service Lead bank credit card Gramin bank Volunteer scheme initiative 26 dist scheme Loan for retail ShreyasGramin Jalyoga scheme SME Business traders bank unit Loan for solar HarikalyanaYojna SEM marketing Water Heating unit system Direct financing Rural Resources Agri-Business to SHGs Development Marketing Unit Lending MCGs to Mobile Sale Van Agri(for helping Consultancy women service entrepreneur in marketing) CED for women

KrishiMitra cards Finance to scheme NGO/MFI for on lending to SHG General credit card

Social Banking

e.AREAS OF OPERATION
Over the years, Canara Bank has a reputation as a top quality service provider to its customers and it believes in the centricity of its customers. Canara Bank of India has a network of 3046 branches, spread over 25 States/4 Union Territories of the country .It has its Head office in Bangalore along with 34 circle offices and 1 international division. The bank also has international presence in several centers, including London, Hong Kong, Moscow, Shanghai ,Doha, and Dubai. In terms of business it is one of the largest nationalized commercial banks in India. Canara Bank has international division which supervises the functioning of its various foreign departments to give the required thrust to foreign exchange business especially exports and to meet the requirements of NRIs

f.OWNERSHIP PATTERNS
The board consists of a whole time Chairman and Managing Director and two executives director and one director representing Govt. of India and one representing Reserve bank of India and four part times Non-official Director. Canara bank is a public sector undertaking (PSU),73.17% of its share his held by Govt. of India and mutual fund/other institutions 5.75% private corporate bodies 3.33% and public ownership is 17.75%. The bank is listed NSE, BSE and Bangalore Stock Exchange

Ownership Pattern of Canara Bank (Table 6)

Category Promoters central govt./state govt Institutional Investors Mutual funds/UTI Financial institutions Insurance companies Foreign Institutional Investors Non Bodies corporate Number of shares 300000000 %of equity 73.17

8070610 420940 31064973 47581514

1.96 0.10 7.58 11.61 0.48

institutions 1983985

Individuals Individual 2006041 shareholders holding nominal share capital uptoRs. 1 lakh. Individual shareholders 489984 holding nominal Share capital in excess of Rs. 1 lakh Trusts Clearing Members Non-resident India Total 5560 74085

4.89

0.12

0.00 0.02

252308 410000000

0.06 100

Ownership pattern of Canara Bank

central/state Govt. mutual funds/UTIs financial instn./Insurance cos Foreign Instnl. Investors Bodies corporate Indian public NRI/OCB Trusts

(figure 1)
0% 0% 0% 5% 12% 8% 3% 72% mutual funds/uti financial instn/insurance cos foreign instnl,investors bodies corporate indian public central/state govt

g. COMPETTIORS INFORMATION 1 State Bank of India:

The State Bank Group, with over 16000 branches, has the largest branch network in India and the bank has 141 overseas offices spread over 32 countries. State Bank of India is one of the Big Four Banks of India with ICICI Bank, Axis Bank and HDFC Bank.The State bank of India is 29th most reputable company in the world according to Forbes. The products of the bank are Loans Credit Cards, Savings ,Investment, vehicles, SBI Life Insurance etc

2 ICICI Bank:
It is India's largest private sector bank by market capitalization and second largest overall in terms of assets. The Bank also has a network of 1,640 branches and about4,816 ATMs in India and presence in 18 countries, as well as some 24 million customers. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels. ICICI Bank is also the largest issuer of credit cards in India.

3 Bank of India:
It was established on 7 September 1906 is with its headquarters in Mumbai. Government-owned since nationalization in 1969, It is one of India's leading banks, with about 3101 branches including 27 branches outside India. Bank of India is a founder member of SWIFT (Society for Worldwide Inter Bank Financial Telecommunications) in India which facilitates provision of cost-effective financial processing and communication services.

h. INFRASTRUCTURAL FACILITY
Canara bank is located in the centre of the city where the bank has multi-floor building where it has separate partition for all the departments. The bank is fully computerized and well furnished with air condition facility to the employees The bank provides medical facilities to its employees It also provides educational facility to the employees and their children. The bank also provides vehicle faculty or traveling allowances to their employees The bank also has provided with quarters facilities to its employees (officers). The bank has established its own training centre to develop the employee knowledge, skill & attitude.

i.

Organization Structure of Canara Bank (figure 2)

Board of Directors Chairman Managing Director Executive Director General Manager Deputy General Manager Assistant General Manager Chief Manager Senior Manager Manager Officers Clerical Staff At tenders

Sl. No.

Directors

Photo

Shri. R.K. DUBEY 1 Canara Bank Head Office 112, J.C. Road BANGALORE -560002 Chairman & Managing Director

Shri. ASHOK KUMAR GUPTA 2 Canara Bank Head Office 112, J.C. Road BANGALORE -560002 Shri V. S. KRISHNAKUMAR 3 Canara Bank Head Office, 112, J. C. Road, BANGALORE - 560002 Shri. PRADYUMAN SINGH RAWAT 4 Canara Bank Head Office, 112, J. C. Road, BANGALORE - 560002 Dr.RAJAT BHARGAVA 5 Joint Secretary Department of Economic Affairs, Government of India, North Block, New Delhi - 110011 Smt. Meena Hemchandra 6 Chief General Manager & Principal, College of Agricultural Banking, Reserve Bank of India, Next to E Square, University Road, PUNE - 411030 Director representing Reserve Bank of India Director representing Government of India Executive Director Executive Director Executive Director

Shri. G.V. SAMBASIVA RAO 7 Canara Bank, Abid Road Branch, Hyderabad - 500001 Workmen Employee Director

Shri G. V. Manimaran Canara Bank, IIT Branch Shopping Complex,IIT Campus, Chennai 600 036 Officer Employee Director

Shri SUNIL HUKUMCHAND KOCHETA Vardhman, Ram Nagar Ausa Road, LATUR 413512 Part Time Non Official Director under Chartered Accountant category

10

SHRI SUTANU SINHA Chief Executive The Institute of Company Secretaries of India, ICSI House, 22 Institutional Area, Lodi Road, NEW DELHI - 110003 Part Time Non Official Director

11

Shri. MOCHERLA SAIRAM BHASKAR H. No. 8-2-472/6 Road No. 4, Banjara Hills HYDERABAD - 500034 Part Time Non Official Director

12

Shri.RAJINDER KUMAR GOEL E-6,Jhandewalan Extension 2nd Floor, NEW DELHI-110055 Shri.SANJAY JAIN #1202,Tower-5, Vipul Belmonte Sector-53 GURGAON Shareholder Director

13

Shareholder Director

Work Flow Model For Loan Section (figure 3)

Account holder

Request for loan to the Branch

Approval /Rejection by the Branch / C.O/ H.o

Figure 3 :- The loan sanction process
The bank has a two way approach in its work flow pattern. Lets consider a loan sanction model ,the person who requires the loan needs to fill an application and submit it to the respective branch authority. Each branch has certain limitations regarding the loan amount; bank needs to check the authentication of the details and information produced by the party. Loan can be sanctioned only if the securities pledged are valid and are free from legal considerations. The loan is sanctioned by the bank authorities if the requirements are fulfilled; else if the loan mount is exceeding the limits of the branch, the request is forwarded to the circle office or the23head office. The circle or the head office verifies and approves or rejects the proposal. The order (approved/rejected) is sent back to the respective branch, and hence sent to the person. The figure above provides a clear understanding of the same

j. AWARDS/ACHIEVEMENTS
First National Award, instituted by the Ministry of Micro, Small & Medium Enterprises, Govt. of India for 'Excellence in Micro & Small Enterprises (MSE) Lending 'for 2006-07. Golden Peacock Award for Corporate Social Responsibility for the year 2007. Canara Bank is the first PSB to receive the award since its institution in the year 1991. Golden Peacock National Training Award-2007 instituted by the Institute of Directors, New Delhi, a pioneer in Quality Revolution.

 Conferred the Business Super brands Status for 2008. The Organization of the Year Award- for PR Excellence instituted by Public Relations Council of India. Excellence in the field of Khadi& Village Industries in South Zone for the year 200607,instituted by Khadi& Village Industries Commission, Ministry of Micro, Small & Medium Enterprises, Government of India. Received during 2008-09Conferred First Rank in India s Best Banks awards under the category Strength and Soundness for 2006-07 by a survey conducted by Ernst & Young. Best Performing Bank under Rural Employment Generation Programme , (REGP) of Khadi and Village Industries Commission (KVIC), in South Zone for the year 200708,instituted by the Ministry of MSME, Government of India . Golden Peacock National Training Award 2008 for excellence in training. Global HR excellence in Training , an award conferred by the Asia Pacific HR Congress ,the largest rendezvous of HR Professionals, at its Employer Branding Talent Management Congress held on 22nd and 23rd August 2008, Delhi. Best Corporate Social Responsibility Practice Award, instituted by BSE, NASSCOM and Times Foundation The Bank won two Silver Corporate Collateral Awards for Best Corporate Ad in the Print Media and Best Corporate Film on Corporate Social Responsibility at the Public Relations Council of India Awards 2009. Best Bank in South Zone Award for the year 2008-09 in respect of lending under KVIC and PMEGP Schemes. The award was handed over by Dr.Manmohan Singh, HonblePrimeMinister of India The Bank received the Credit Guarantee Approval Certificate issued by CGTMSE from ShriPranab Mukherjee, Honorable Finance Minister of India

k. FUTURE GROWTH AND PROSPECT The Bank aims to reach an aggregate business figure of Rs.5 lakh crore, comprising total deposits of Rs.285000 crore and advances of Rs.215000 crore. The Bank will continue to focus on core business, with the objective of augmenting profits and profitability. Expanding global footprints, the Bank is likely to open a Representative Office at Sharjah shortly in addition to RBI approval already obtained in 9 international centres. Targets to achieve 100% CBS coverage by June 2010 The Bank has plans to open over 200 new branches during FY2011