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Introduction of Banking
Banking regulation Act, 1949, defines banking as accepting for the purpose of lending
or investment, of deposits of money from the public, repayable on demands or
otherwise and with draw able on demand by cheques, draft or order otherwise.
1. To change cash for bank deposits and bank deposits for cash.
2. To transfer bank deposits between individuals and or companies.
3. To exchange deposits for bills of exchange, govt. bonds, the secured and
unsecured promises of trade and industrial units.
4. To underwrite capital issues. They are also allowed to invest 5% of their
incremental deposit liabilities in shares and debentures in the primary and
secondary markets.
5. The lending or advancing of money either upon securities or without securities.
6. The borrowing, raising or taking of money.
7. The collecting and transmitting of money and securities.
8. The buying and selling of foreign exchange including foreign bank notes.
Banking scene in India
The market place began to change for banks in India as a result of reforms of the
financial sectors initiated in the current decade. On account of policy measures
introduce to infuse greater competitive vitality in the system, the banking has entered in
to a competitive phase. Competition has emerged not only from within the banking
system but also from non-banking institutions. Lowering of entry barriers, deregulation
of interest rates and growing sophistication of customers have made banking far less
oligopolistic today. Introduction of capital adequacy and other prudential norms,
freedom granted to enter into new turfs and greater overlap of functions between banks
and non-banks have forced banks to get out of their cozy little world and think of the
future of the banking.
Greater coordination between monetary, fiscal and exchanged rate policies for
achieving the goals of faster and sustainable economic growth, macro-economic
stability and export promotion.
Close integration of various financial markets such as money market, capital market and
forex market.
In the next millennium banks will have to be more and more cautions about
customer service, profitability, increased productivity, to keep face with changing
banking scenario. As banks in India prepare themselves for the millenium these are the
shifts in the paradigm they are likely to experience. The 21st century may see the dawn
of DARWINIAN BANKING. Only the banks could fulfill the demands of markets and
changing items would survive and prosper.
Preamble :
Purpose :
To meet the credit requirements of small business units, industrial unit, retail trader,
artisan, Small Scale Industry (SSI) and tiny units.
Eligibility :
A. Customers of the following segments with a satisfactory track record for the last two
years enjoying credit facilities.
Small industrial units (SSI and tiny units including artisans)
Small retail traders (Under SBF)
Professional and self employed persons
Small business enterprise
B. Units who do not enjoy credit limit with us/other banks at present with excellent
performance and credential may be considered.
Quantum of loan :
Assessment :
For small business, retail trader etc. 20% of the annual turnover declared for tax
purpose or last twelve months turnover in the operative accounts, whichever is
higher.
In respect of parties with good track record, where sales tax returns are not available,
the credit limits may be decided taking into consideration the actual turnover in the
accounts during the last two years.
For professionals and self employed persons, 50% of their gross annual income
as per IT return shall be considered as the limit for issuing the SBI credit card.
For small scale industrial units, tiny sector units the assessment norms in vogue
as per the Nayak Committee recommendations would continue.
Validity :
Credit card limit will be valid for a period of three years, subject to satisfactory
conduct of the accounts.
Annual review will be done based on conduct/operations of the A/cs. A major
portion of the sales turnover should have been routed through the accounts as
revealed by the credit summations.
Repayment :
The working capital advance may be continued subject to that review every year
provided the credit summations in the account is not less than 50% of the
projected sales turnover. If the credit summations is less than 50% of projected
sales turnover. The outstanding as on the due date of review should be made
repayable in suitable monthly installments.
The term loan is repayable in suitable installments with in a maximum period of
five years.
In case of composite loans, only the term loan is repayable in installments up to a
maximum period of five years.
Interest rate :
As per extent instructions issued from time to time relating the market segment.
Refinance :
Security :
Collateral :
User SBF :
Up to Rs. 25000/- No collateral security.
Over Rs. 25000/- charge over movable/immovable property or third party
granted.
However, in case of the excellent track record, sanctioning authority may waive
collateral requirement.
Margins :
Documentation :
The credit card is a hassle free convenient banking product aimed at simplifying
the credit delivery mechanism. Cumbersome procedural aspects relating to reviews
and renewals, submission of stock statement, balance sheet and other statements are
done away with. The credit limit will be worked as detail above.
Card No.
Name
Account No.
Tel. No.
Limit Rs.
Date of issue
Valid upto
.. (Branch Code)
The borrower would be issued a photo card indicating sanctioned limit and validity of the
limit (sample card)
Insurance :
All eligible loan accounts sanctioned for small scale industries (other than
services) would qualify for cover under CGTFSI scheme (presently the scheme has
been introduce in five circles on pilot basis viz. New Delhi, Chandigarh, Lucknow, Patna
& Hydrabad).
Operation :
Inspections :
Sanction :
Scoring Model :
Rationale :
An ATM (Automatic Teller Machine) card is useful to a card holder as it helps him
to withdraw cash from banks even when they are closed. This can be done by
inserting the card in the ATM installed at various banks locations.
State Bank Cash Plus CARD
Signature Panel.
Magnetic Stripe
We uses our State Bank Cash Plus Card for cash withdrawal from ATMs.
We uses it for making the payments for purchase made at the merchant
establishments.
This study entitled comparative study of various credit schemes of SBI V/s other
banks will be helpful for bankers to maintain customers service policy, for
customers while deciding their financing needs and also helpful for other researchers for
further research in the future.
SBI card provides customers with an option, in addition to the existing banking credit
facilities available. With an SBI card customers can enjoy hassle-free credit facilities.
This study would help us to know about the problems that are faced by the consumers
during transactions. It would also reveal the problems that are being faced by the bank
employees while dealing with customers and would also highlight the future prospect of
SBI card.
It is very essential to know whether the study has already been conducted before. If so,
how and to what extent ? And because of this scholar has to go through all the existing
literature related to the study. SBI Card, very limited studies have been conducted on
the subject. Due to the time restrictions scholar could seek advice from only the limited
literature, which is available with the bank.
As the concept is completely under the control of various banks and RBI. So the
information is directly taken from these sources.
Conceptualization
As the concept includes two terms i.e. cash credit or working capital loans and terms
loans. Therefore both the terms are taken into consideration in the proposed study. Due
to the privatization of banking sector many big private players entered in this sector
giving a tough competition to the existing players. So, to face this stiff competition all the
public sector banks have to review their functioning. These aspects will be given
importance in this project report.
The concept of SBI card, question crops in mind what is a SBI card, What is its
shape and size, what is its function. A SBI card is nothing but a identity card containing
card holders photographs with signature, card no. Name, A/c No. limit, validity period,
branch code with signature of Branch Manager.
Project Report Credit Schemes of SBI and other
Banks
The study has been conducted at SBI Bhiwani. The main focus of the study is to know
about customers perceptions about various credit schemes. As SBI card is an integral
part of SBF (small business financing). So the due weightage is given to SBI card. This
study has been conducted by classifying customers into two categories.
To find out main obstacles while getting finance under various credit schemes.
Limitations of the study
The time was very limited as for requirement of study.
Taking Sample has carried out the study. Therefore, all the limitations associated with
sampling.
Sometimes the respondent does not want to disclose some relevant information.
CHAPTERISATION
The Chapterisation of the project report is as following :
Chapter 1 :
I have discussed about the relevance and importance about the project. I have explained
the topic with ATM facilities. Why this study is required? What are the limitations? What
are the objectives and what are the steps I have adopted for doing this project.
Chapter 2 :
This study consists of the whole research methodology about the project. It means what
are the steps have been taken for doing this study. How much the sample size and what
are the variables? So this study consist the complete research methodology. In this
Chapter 3 :
It consists the detail descriptions about the raw data. Here the complete analysis of the
data, which is collected from the primary sources. For tabulation the data is converted into
the percentage and after that it is tabulated. On the basis of this data the graph are
Chapter 4 :
It consists the appendices part of the project report in this part I have mentioned the names
of all those books, magazines, journals and web-sites from where I have collected the
material comes under the head of bibliography. It also consists the questionnaire, which
Sampling techniques :
Research Design
A research design is simply a plan for study in collection and analyzing the data. It helps
the researcher to conduct the study and ensure that economical procedures are
employed and probing is relevant to the problem. Depending upon the objective of the
study there is three-research design available : .
Exploratory Research
Descriptive Research
Data Collection :
1. Primary Data :
Primary Data are those data which are collected to solve a problem or take advantage
of any opportunity on which a decision is depending. These data are basically observe
and recorded by the researcher for the first time used primary data for my project work.
2. Secondary Data :
Secondary data are those data which are primarily collected by other person for his own
purpose.
Observation Method
Questionnaire Method
Independent variables :
Environmental factors
War
Technology
Natural Calamities
Dependent variables :
Company policy
Infrastructure
Table No. 1
YES NO
46 04
Most of the respondent are well awared about the credit facilities of
different Banks
Table No. 2
YES NO
44 06
Most of the respondent are availing credit facilities from Banks.
Table No. 3
from banks.
18 14 04 06 02
Nearly 40% of the Respondents are availing credit facilities from
SBI followed by PNB.
Table No. 4
One
10 16 14 04
Most of the respondents are availing the credit facilities ranging from 1
to 3 years.
Table No. 5
Yes No
32 12
Table No. 6
banks
OBC
42 40 22 14 12 08
The credit facilities of SBI and PNB are well known to every
respondent.
OBC
30 27 08 13 08
14
SBI and PNB are the most preferred banks in regard of interest rates.
Table No. 7 (b)
requirement
OBC
26 30 16 10 06 12
Respondents are very much satisfied with SBI and PNB in respect of
collateral security requirement.
OBC
28 27 20 8 10
07
Respondents appreciate the attitude of employees of the SBI, PNB
and IOB.
OBC
26 32 26 06 06
04
Respondents appreciate the level of services provided by SBI, PNB and IOB.
OBC
28 24 18 12 08
10
Customers are happy with the document requirement of SBI and PNB.
OBC
38 22 16 08 08
08
Customers are very much satisfied with the renewal process of SBI and tanks to SBI card.
Table No. 8
24 08 04 08
06
Security requirements are the main obstacle while availing any credit facility.
Table No. 9
Table No. 10
OBC
56 24 10 04 04
02
Table No. 11
Yes No
38 12
Friends Bank
06 22 04
06
Most of the respondents gets information about SBI card from bank employees.
Objective No. 1 :To find out the Market Potential of SBI card.
the SBI card and feel that this facility is beneficial to them
as they can fix the limit for three years.
Suggestions
RBI Should reduce the SLR and CRR to increase the credit
creation capacity of the banks.
Questionnaire
Name Age
.
Income... Occupation
...
Yes No
Q3. If yes, from which bank you are availing credit facility ?
Yes No
..
Q.7 Tick the name of banks whose credit facilities are known to you ?
officer
Banks
SBI
PNB
UCO
OBC
CANARA
IOB
Q9. According to you what is the main obstacle while getting finance under various credit
facilities?
Q10. According to you arrange the parameters in the descending order of their preference?
Q11. Which banks name comes to your mind first while availing credit facility and why?
..
..
Yes No
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