Syndicate Bank ______________________________________________________________

CHAP 1 INTRODUCTION

1.1 Industry Profile 1.2 Company Profile 1.3 Product Profile

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1.1

INDUSTRY PROFILE

Commercial banks in India have traditionally focused on meeting the shortterm financial needs of industry, trade and agriculture. At present, there are 286 scheduled commercial banks in the country, with a network of 67,742 branches. Scheduled commercial banks are the ones that are listed in the second schedule to the RBI Act, and may further be classified as public sector banks, private sector banks and foreign banks Scheduled commercial banks have a presence throughout India, with nearly 69.72% of bank branches located in rural or semi-urban areas of the country. A large number of these branches belong to the public sector banks.

Public sector banks make up the largest category of banks in the Indian banking system. There are 27 public sector banks in India. They include the SBI and its associate banks and 19 nationalized banks. Nationalized banks are governed by the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 and 1980. The banks nationalized under the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 and 1980 are referred to as corresponding new banks. Syndicate Bank is a corresponding new bank, nationalized in 1969 under the Bank Acquisition Act.

Public sector banks operate in the remotest possible areas of the country and give employment opportunity to one and all. Contrary to their private sector counterparts, technological up gradation is still in infancy in public sector banks. The most astonishing feature of the public sector banks is that many employees are not computer literate and the personnels average age is 40+. These banks are also subject to limited government interference. But ______________________________________________________________ 2

Syndicate Bank ______________________________________________________________ the last decade has seen many positive developments in the Indian banking sector. These banks have established an outstanding track record of innovation, growth and value creation. While bank lending has been a significant driver of GDP growth and employment, periodic instances of the failure of some weak banks have often threatened the stability of the system. But nonetheless, the banking sector is the fastest growing and the most flourishing sector in the Indian economy. The major players in this sector are private and public sector banks.

Though the banking sector is going through a rough patch nowadays, still this sector contributes the most to the world GDP. These banks should strive to penetrate the untapped areas of the market to overshadow the downward trend in this sector.

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1.2

COMPANY PROFILE

The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather lack of will Syndicate Bank was established in 1925 in Udupi, and was originally known as Canara Industrial and Banking Syndicate Limited. It was renamed as Syndicate Bank Limited with effect from Jan 1, 1964 and was nationalized in 1969. It was started with a capital of Rs.8000/- by three visionaries - Sri Upendra Ananth Pai, a businessman, Sri Vaman Kudva, an engineer and Dr. T M A Pai, a physician. Their objective was primarily to extend financial assistance to the local weavers who were crippled by a crisis in the handloom industry through mobilizing small savings from the community. The bank collected as low as 2 annas daily at the doorsteps of the depositors through its Agents under its Pigmy Deposit Scheme started in 1928. This scheme is the Bank's brand equity today and the Bank collects around Rs. 2 crore per day under the scheme. The progress of Syndicate Bank has been synonymous with the phase of progressive banking in India. Spanning over 80 years of pioneering expertise, the Bank has created for itself a solid customer base comprising customers of two or three generations. Being firmly rooted in rural India and understanding the grass root realities, the Bank's perception had vision of future India. It has been propagating innovations in Banking and also has been receptive to new ideas, without however getting uprooted from its distinctive socio-economic and cultural ethos. Its philosophy of growth by mutual sustenance of both the Bank and the people has paid rich dividends. The Bank has been operating as a catalyst of development across the country with particular reference to the common man at the individual level and in rural/semi urban centers at the area level. ______________________________________________________________ 4

Syndicate Bank ______________________________________________________________

Syndicate Bank today is placed in the league of large and leading public sector banks in India. The bank is a pioneer in introducing several initiatives such as agricultural financing and door-to-door banking, which are now recognized as benchmark by the industry. The bank offers wide gamut of services including deposits, corporate and retail loans, cash management, foreign trade services, cards, insurance. Syndicate bank has won accolades for its service in rural communities and achieving exemplary customer service is an ongoing priority for the bank. The bank has a large network of 2,125 branches in India with overseas presence in London and boasts of a workforce of over 25000 employees. In addition, it has been managing exchange companies in the Middle East to channelize remittance from expatriates to India. The Bank has launched an ambitious technology plan called Core Banking Solution (CBS) whereby 500 of our strategic branches with their ATMs are being networked nationwide over a 4 year period. The bank has made steady progress over the years and has had a consistent performance throughout. The IT initiatives of the Bank have been amply recognized and rewarded both nationally and globally, which can be seen from the following awards won by the Bank during this year. 1. Best use of IT for customer service in Semi-urban and Rural areas by IDRBT, Hyderabad. 2. Best Core Banking Project among Large Banks in Asia Pacific Region The Asian Banker IT Implementation Awards 3. The Asian banker IT implementation AWARD 06 for best core banking project for large banks The bank is known for its customer friendly approach. The bank is committed to providing high quality customer service and timely redressal of customer grievance.

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1.2.1 Vision 1.2.2 Mission 1.2.3 Goals 1.2.4 Objectives

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1.2.1

VISION

Consolidating position as a premier public sector bank with increased global outreach. Emerging as a strong, vibrant, responsive, competitive bank. Embracing state-of-art technology harnessing human potential and effectively participating in the process of nation building. Serving its constituents and shareholders as a faithful friendly financial partner.

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1.2.2

MISSION

The bank continuously envisages to: Add core deposits continuously Offer better customer service Enhance tolerance level in dealing with customers and get better understanding of their requirements Design and deliver the products and services according to its customers needs so as to give them an exhilarating and enthusiastic experience. Acquire accounts aggressively Year of NPA resolution

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1.2.3

GOALS

The goals articulated for each of the functional areas of the bank is: 1. Business: To achieve global business of Rs. 250 thousand crores by March 2010. 2. Resources: To achieve global deposits of Rs. 170000 crore by March 2010 with emphasis on low cost resources by planned strategic initiatives including branch expansion, aggressive marketing and active involvement of each and every employee. 3. Advances: To build qualitative asset base of around Rs. 90000 crore by March 2010 to augment the income portfolio of the bank. 4. Priority sector credit: To have accelerated and qualitative growth in priority sector lending to reach a level of Rs. 23800 crore, Rs. 10200 crore under agriculture, Rs. 3514 crore under SME through various customer friendly credit products and to take maximum advantage of Financial Inclusion so as to expand the clientele base of the bank, and provide financial assistance to all eligible candidates. 5. Information Technology: To harness state-of-art technology and network all branches so as to make available reliable MIS for DSS and deploy best practices in Information Security to manage the business effectively and profitably. 6. Management of assets : To make 2008-09 truly a year of NPA resolution by striving for getting A rating under asset quality by upgrading NPAs, bringing down gross NPA and net NPA level both in absolute and percentage terms below march 2009 figure and accomplish NPA recovery target as per commitment.

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Syndicate Bank ______________________________________________________________ 7. Foreign exchange and treasury: To profitably manage the forex and investment assets of the bank to achieve an exportimport turnover of Rs. 15000 crore and Rs. 12750 crore respectively. To achieve treasury income of Rs. 2345 crore with an investment of Rs. 35000 crore. 8. Profitability: To make every branch a profits centre and ensure best possible returns to the shareholders. 9. Risk management: To continuously upgrade the risk management systems and processes, imbibe risk management in business activities and implement Basel II requirements for the benefit of all stakeholders. 10. Human resources and organizational structure: To mould and strengthen the organizational structure to meet the future business requirements and challenges. To redefine and to redevelop peoples management techniques so as to unleash human potential, drive growth and nurture leadership of high quality corporate governance, 11. Customer relationship management : To fine-tune its marketing strategies to meet the ever growing market odds, to ensure that our products and services adapt to the changing needs and expectations of the customers, to provide the customer the ideal banking ambience, to reorient its publicity so as to provide increased visibility to its brand. 12. Inspection: To migrate progressively from the present transaction oriented system to a risk based audit exercise enhancing the effectiveness of risk management, control and governance processes.

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1.2.4

OBJECTIVES

1. To have an overview of the organization. 2. To study the departments of the organization in detail. 3. To know about all the products and services being offered by the company 4. To gather study the organizational hierarchy of the company. 5. To gather sufficient information about the comoany so as to do its swot analysis. 6. To give our own suggestions for the betterment of the company.

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1.3

PRODUCT PROFILE

A. BANKING ACTIVITIES : This activity includes the following : 1. Syndicate Bank Global Debit Card 2. Syndicate Bank Global Credit Cards B. BANCASSURANCE: The bank provides insurance services in association with Bajaj Allianz. 1. Life Insurance Products 2. Non Life Insurance Some of its life-insurance products in association with Bajaj Allianz are: a. INVESTGAIN b. CASHGAIN c. CHILDGAIN d. RISKCARE e. TERMCARE f. LIFETIMECARE g. SWARNA-VISHRANTI h. UNITGAIN i. LOAN PROTECTOR j. SYNDDRIVER 3. Cash Management (SCMS) C. DEPOSIT SCHEMES : 1. Synd 400 Plus and Synd 500 Plus 2. Savings Deposit Account: 3. Special Premium Savings Accounts ______________________________________________________________ 12

Syndicate Bank ______________________________________________________________ 4. Fixed Deposit Scheme: 5. Vikas Cash Certificate: 6. Social Security Deposit: 7. Senior Citizens Security Deposit 8. Syndicate Suvidha Deposit 9. Cumulative SyndTaxShield Deposit Scheme 10. Pigmy Deposit 11. Super Premium Savings Bank Account 12. Synd Samanya Savings Bank Account (No Frills Account) : 13. SyndFlexi Current Account D. SYND BANK SERVICES (BPO): It is a wholly owned subsidiary of Syndicate Bank. This is a first BPO outfit of a Nationalized Bank. This BPO Company is proposed to undertake the following activities facilitating customers to file their income tax returns, undertaking Back Office functions relating to Bank's Debit / Credit Card / Bancassurance Business etc.

E. LOAN PRODUCTS : a. SyndRent b. SyndSaral: c. SyndSenior: d. SyndVidyarthi: e. SyndNivas: f. SyndNivasPlus: g. SyndPigmy: h. SyndKisan: i. SyndVahan: j. SyndLaghuUdyami: k. SyndMahila: l. SyndMortgage:

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Syndicate Bank ______________________________________________________________ SyndPravasi: m. SyndSmallCredit: SyndSuvidha: n. SyndUdyog: o. SyndVyapar: p. SyndJaiKisan q. SyndShakti F. AGRICULTURAL LOAN PRODUCTS : 1. Animal Husbandry Scheme 2. Development of Irrigation Infrastructure 3. Farm Mechanization Schemes 4. Hi-tech Agriculture 5. SyndJaiKisan 6. Jewel Loans for Agriculture 7. Land Development Schemes 8. Purchase of Land for Agricultural Purpose 9. Rural Employment Generation Program 10. Solar Water Heater Systems 11. Syndicate 2/3/4 Wheelers Scheme 12. Syndicate Farm House Scheme 13. Syndicate Kisan Credit Card(SKCC) 14. Tenant Farm Loan

G. OTHER SERVICES : 1. Tele Banking ______________________________________________________________ 14

Syndicate Bank ______________________________________________________________ 2. Internet Banking 3. Any Branch Banking 4. Synd Bill Pay 5. On-Line Collection of Direct Taxes 6. On-line Railway Ticket Booking 7. Western Union Money Transfer 8. SyndInstant - (RTGS System for instant transfer of funds) 9. Electronic Funds Transfer (EFT) System 10. Syndicate Gift Cheques 11. Insurance Cover for Deposits 12. Stop Payment Facility 13. Dormant Accounts 14. Safe Deposit Lockers

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CHAP 2

ORGANIZATION STRUCTURE

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ORGANISATION CHART

BOARD OF DIRECTORS

CHAIRMAN & MANAGING DIRECTOR

EXECUTIVE DIRECTOR

General Managers Portfolios 1. Corporate Credit Division I (CCD-I) 9. Priority Sector Credit Dept 2. Corporate Credit Division II (CCD-II) 10. Premises & Maintenance Dept 3. Retail Banking Department 11. General Administration Dept: Board Secretariat, Chief Compliance Officer 4. Planning & Development Dept 12. Central Accounts & Legal Dept 5. Recoveries Dept 13. Personnel Department 6. Dept. of Information Technology 14. Inspection Department 7. Risk Management & Monitoring Dept. 15. Vigilance Department 8. Treasury & International Banking Division

Regional Offices Branches

Chap 3
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Syndicate Bank ______________________________________________________________

FUNCTIONAL AREAS

3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9

Accounts Audit and inspection Credit Human resources Information technology Insurance Planning and development Recovery Risk management

3.10 Retail banking

3.1

ACCOUNTS

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Syndicate Bank ______________________________________________________________ The functions of this department are: 1. Maintaining Books Of Accounts : The accompanying financial statements are prepared following the going concern concept on Historical Cost basis and conform to the statutory provisions and prevailing practices, of the countries concerned, except wherever otherwise stated. 2. Inter Branch Reconciliation: This department does not only involve maintaining books of accounts, but it also has several other functions. One of the main functions of this department is, Inter branch reconciliation. Through this, Inter bank transactions between CBS branches are reconciled through the system on a real time basis so as to detect inconsistencies between them. 3. Handling Cash Management Services: Another important function of this department is to handle CMS (Cash Management Services) operations. . CMS is a volume based business that has varying peaks and lows, which means to maximize its advantages banks have to manage processes at peak loads not only on peak days and weeks but at all times.

4. Maintain government deposits: This department also helps the bank to maintain the government deposits like bonds, bills etc. 5. Handle tax related matters: Apart from this, all the tax related matters are also handled by this department. Thus, this department also handles issues related to income tax, corporate tax etc.

3.2

AUDIT AND INSPECTION

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The important functions of this department are: A. Audit and Inspection: Conducting audit and inspection is one of the most important functions of the bank. It is mandatory for the bank to periodically review its performance as well as the books of accounts. As per the RBI, it is allowed to publish its financial statements only after proper audit. Taking into account the regulatory expectation, business profile and risk perceptions, policies and procedures covering inspections and audits are periodically reviewed and improvements are carried out. The inspection policy, which is in existence since 2000, is revised incorporating subsequent changes in the system and also to suit the present day needs. B. Vigilance: Vigilance administration is an important aspect of management function and is aimed to improve the efficiency and effectiveness of the organization. Investigations are carried out expeditiously and disciplinary proceedings are conducted in time. Stress has been laid on preventive vigilance by initiating preventive studies at branches, conducting preventive vigilance training at SIBM and all the other major training centers and constituting Preventive Vigilance Committee at the branches with staff strength of 15 and above with a view to ensure strict adherence of procedures. C. Providing Information Under The Right To Information Act, 2000 (RIA): A person who desires to obtain any information under this Act shall make a request in writing or through electronic means along with such fees which will be prescribed by the respective Bank to the Assistant Public Information Officer. On receipt of a request for information, the Asst Public Information Officer , as expeditiously as possible and in any case within 30 days of receipt of the request, in consultation with Chief / Public Information Officer shall either provide ______________________________________________________________ 20 systems and

Syndicate Bank ______________________________________________________________ the information or reject the request for any other reasons specified in Section 8 & 9 of the Act. If the information sought for concerns the life or liberty of a person, the same shall be provided within forty-eight hours of the receipt of the request. In case of rejection, the same shall be communicated to the person who has made the request along with the reasons for such rejection, the particulars of the Appellate Authority and the period within which an Appeal against such rejection may be preferred.

3.3

CREDIT

The important functions of this department include: ______________________________________________________________ 21

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A. Credit n policy formulation: the basic function of this department is to formulate policies and to regulate the advances. The advances details of the bank are : 1. Global advances Rs. 52839 crore 2. Domestic advances Rs. 47233 crore 3. Priority sector credit Rs. 18441 crore 4. Agricultural credit Rs. 8050 crore 5. Retail credit Rs. 13824 crore 6. Advances to housing loans Rs. 4894 crore 7. Credit flow to export credit Rs. 1958 crore 8. Global credit-deposit ratio 67.2% The advances plan of the bank is: 1. Global advances to reach Rs. 62657 crore 2. Domestic advances to reach Rs. 56983 crore 3. Priority sector credit to reach Rs. 23971 crore 4. Agricultural credit to reach Rs. 8700 crore 5. Retail credit to reach Rs. 17552 crore 6. Credit flow to export credit to reach Rs. 2298 crore 7. Global credit-deposit ratio to reach 63.73% 8. SME advances to reach Rs. 5400 crore 9. Add one lakh SyndVidyarthi accounts. B. Small and Medium Enterprises (SME ): The SME forms one of the priority areas of the bank. For its development, the bank has launched several loan schemes like : 1. Synd Udyog 2. Synd Vyapar 3. Synd Laghu Udhyami Credit Card (SLUCC) 4. Synd Swarozgar Credit Card (SSCC) 5. Synd General Credit Card (SGCC) ______________________________________________________________ 22

Syndicate Bank ______________________________________________________________ 6. Synd Small Credit 7. Synd Shakthi

3.4

HUMAN RESOURCES

Be nice to people on your way up because you meet them on your way down ______________________________________________________________ 23

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Training: A great deal of emphasis is given on training of employees in each cadre including women and sc/st employees. SIBM (Syndicate Institute of Bank Management) was established in November 1987 and is the apex training institution of Syndicate Bank for honing skills in banking and management for the bank's executives and senior personnel. Training activities of the Bank are governed by the policies and procedures laid down in the Training Manual. Training programmes are classified into two categories, general programmes and special programmes. 40 General Programmes, in branches like Risk Management, Credit Management, Recovery Management, Internal Control Management, Human Resource Management, Marketing and Quality Improvement, Foreign Exchange, Information Technology, are identified and their course contents, target groups are listed in the Training Manual. Special programmes are designed based on the recommendations of the Departments at Head Office and Corporate Office, taking into account the Corporate Goals, Policies, requirements, business plans and strategies, target group etc Industrial Relations: The employer-employee relations are cordial.

Periodical discussions are held with the representatives of recognized registered trade union of workmen and officers, both at the corporate and regional offices contributing to healthy industrial relations in the bank. The HR Policies of the Bank are geared to meet the corporate objectives of sound and profitable growth. Recruitment: Taking into consideration the existing manpower, its age profile, likely attrition, the emerging scenario, need for additional manpower to support the growth and diversification of business, need for skilled staff to work in the networked banking environment and also the priorities attached to agricultural sector under the National policy, the Bank has undertaken direct recruitment of General Banking Officers, Specialist Officers in the area of Agricultural Finance, Information Technology, Accounts and Financial Management, Security, Law, etc. The bank does not have a one-sided ______________________________________________________________ 24

Syndicate Bank ______________________________________________________________ recruitment policy, i.e., it believes in recruiting people not only from the upperstrata but also from the lower strata of the society. The recruitment policy of the bank lays more emphasis on quality and believes in giving equal chance to every one. The bank recruits through many sources like campus placements, banks website, walk-ins, employment exchanges etc. The short listed employees have to go through a series of interviews to be selected.

3.5

INFORMATION TECHNOLOGY

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Syndicate Bank ______________________________________________________________ We cannot function with yesterdays tools and still remain in business tomorrow The bank has created this dept to promote computer literacy among employees, to upgrade communication to develop electronic banking capabilities. Presently all branches are computerized. All 156 ATMs are interconnected to the Financial Transaction Switch and all the customers of CBS branches can use them. The bank has joined the Real Time Gross Settlement System (RTGS) and 397 branches of the bank are RTGS enabled. Syndicate Bank has chose i-flexs FLEXCUBE and IBMs infrastructure technologies and implementation services to upgrade its system. The Bank is first among Public Sector Banks to implement Core Banking Solutions (CBS) which is known by the brand name "Syndicate-banking". The bank commenced implementing Core Banking Solutions (CBS) of Infosys during 2004. During the current fiscal CBS coverage was further consolidated. Overall CBS network of the Bank increased to 1852 branches / offices spread across 1,052 centers and accounted for about 96% of the Bank's business. Under the CBS project, the bank has set up its own Data Centre, while the Disaster Recovery Site has been co-hosted at the vendors place. In order to ensure near zero data loss, the Bank has set up a Near Site at Mumbai. This makes remittance of funds, collection facilities, cheque clearing instant. New products and services can be launched and MIS reports can be generated without losing time. The Bank has also implemented online Tax Accounting System at 324 designated branches to handle Direct Taxes. The Bank has installed a High Tech Video Conferencing facility at around 40 locations across the Country. This facility is used extensively for interaction of Top Management with the operation ______________________________________________________________ 26

Syndicate Bank ______________________________________________________________ Heads for propagating strategies, review of business development and also for distant learning. The CBS project has enabled the Bank to deliver banking products / services in middle delivery channels like networked ATMs, Telebanking, Internet Banking and SMS Banking, so as to provide Anywhere Anytime Anyhow (AAA) Banking services to customers Branches are computerized with 3 types of software deployed at the branches : Core banking solutions (CBS) 70 branches (all networked) Total banking mechanization 1% branches (branch network) ACPM branches 29% of branches (stand alone system)

3.6

INSURANCE

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The bank has also entered the insurance sector and has tie-ups with some of the major companies of the insurance world. The bank provides the insurance cover association with Bajaj Allianz Life Insurance. Allianz Bajaj Life Insurance Company has signed a memorandum of understanding with Syndicate Bank for distributing its insurance products through the bank's pan-India branch network. CP Swarankar, the banks CMD said Syndicate Bank was already reaping the fruits of this focus on financial inclusion. This focus is expected to boost the banks share of CASA (current account and saving accounts) base. 1. The following products are now marketed: 2. Investigain 3. Cashgain 4. Childgain 5. Riskcare 6. Termcare 7. Lifetimecare 8. Swarna-vishranti 9. Unitgain 10. Loan Protector 11. Synddriver 12. syndsuraksha

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3.7

PLANNING AND DEVELOPMENT

Planning unfolds the unexpectedness of the future well in advance to strategize actions for continuation of journey against odds Planning is a strategic tool of the management to chart out the future course of action. The plan for the year 2008-09 is: 1. Acquire accounts aggressively: It is a bad patch currently, still it aims to increase its customer base. This theme is a conscious effort to replicate its outstanding performance under 1 million accounts campaign launched in the previous year. 2. Add core deposits continuously: core deposits are cost effective deposits that help the bank to overcome the effect of reduced spread. More of core should be the mantra of this year. This would enable the bank to post higher profits. 3. Year of NPA resolution: The qualities of assets decide the quality of profits. It is the responsibility of every employee to commit himself/herself fully to the task of increasing the recovery and reduce the NPAs. 4. Targets : The targets set by the bank are : a. Global deposits to reach Rs. 102000 crore with a growth of 29.71% b. Domestic deposits are projected to grow at 30.43% to reach Rs. 97000 crore. c. Core deposits are projected to grow at 41.17% to reach Rs. 64000 crore. d. Current deposits are projected to grow at 26.75% to reach Rs. 9500 crore. e. Security deposits are projected to grow at 30.52% to reach Rs. 21500 crore.

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Syndicate Bank ______________________________________________________________ f. Low cost deposits are projected to grow at 29.34% to reach Rs. 31000 crore. g. Pigmy deposits are projected to increase from Rs. 1530 crore to Rs. 2400 crore. h. NRI deposits are projected to grow at 22% to reach Rs. 3100 crore. i. Bulk deposits at finer rates will be restricted below Rs. 30000 crore. j. Customer base to increase by 3 million to 22 million. The strategies to be followed to achieve the plan are: 1. Low cost deposits and core-term deposits campaign with total staff involvement. 2. Focus on increased pigmy deposit level through reinvented pigmy plus 07. Appointment of new pigmy agents 3. Leverage new accounts added during 2007-08 to increase low cost deposit. 4. Bringing younger generation to banks fold to turn available production and brand image. 5. Cross selling of our full range of technology driven products, optimum utilization of our delivery channels. 6. Focused marketing approach to broad base our clientele. 7. Opening of new branches to increases business. 8. Popularization of our products like SyndSamanya, SyndVidyarthi and SyndSenior to increase customer base. Another important function of this department is Budgeting, i.e., preparing financial budgets for the coming fiscal.

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3.8
The bank has a

RECOVERY
comprehensive recovery policy, which covers

restructuring/rescheduling of loans, settlement policy, corporate debt restructuring mechanism, seizure and disposal of assets under the Securitization Act, and the filing of suits and enforcement of decrees. The main functions of this department are: 1. Handling DRT cases: Debt Recovery Tribunals (DRTs) are set up by the Centre to reduce the non-performing assets (NPAs) of banks and to provide fast disposal of such cases. The recent Supreme Court judgment makes it mandatory for banks to withdraw all cases pending before the debt recovery tribunal (DRT) prior to taking action under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act 2000. The appeals can be made at DRTs only after the assets have been seized by the lenders. In other words, the Supreme Court judgment does not curb the lenders' power to seize. As a result of this, the lenders will have control over secured assets even before the case is heard at a DRT. This will ensure safe upkeep of the assets and prevent erosion in security value during the litigation as it happens in the case of those companies that are referred to the Board for Industrial and Financial Reconstruction (BIFR).

2.

Handling BIFR cases: : Banks and financial institutions (FIs) are opening up a new front in their offensive against defaulters. Lenders are now busy joining hands to drill a hole in Board for Industrial and Financial Reconstruction (BIFR) umbrella that for long was being used by defaulters as a shelter whenever creditors appeared to be on hot pursuit. Backed by the Securitisation and Reconstruction of Financial Assets law that allows lenders to seek abatement of cases pending before the BIFR, banks and FIs have begun queuing up before the

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Syndicate Bank ______________________________________________________________ board seeking withdrawal of the pending cases. This would enable lenders to resort to the new legislation, which allows takeover and selling of assets of defaulters. The new law provides that if 75 per cent of secured creditors (by value) agree, the matter pending before BIFR would abate.

3. Handling DST Cases: The RBI has suggested setting up of debt settlements tribunals following the failure of DRTs. This system involves appointment of a debt recovery officer by the bank who will issue the demand notice and pass the award

4. Rehabilitation Of Sick Units: As an incentive for proper restructuring package at the time of rehabilitation, necessary support for business restructuring, modernisation, expansion, diversification and technological upgradation as may be felt necessary by the lenders is also be encouraged by the bank. Support schemes like Credit Linked Capital Subsidy Scheme in case of units in other (than rural) areas, KVIC Margin Money Scheme (for units in rural areas) may be extended for rehabilitation packages also.

5. Out of court settlements: The bank tries to settle any litigation with its customers before finally approaching the court.

6. Synd Adalat: It is a process wherein the borrowers are given opportunity to settle their dues under compromise. Such Adalats would be organized at General Managers Office / Regional Office/cluster

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Syndicate Bank ______________________________________________________________ centers to enable the borrowers to participate in person and put forth his views. 7. Lok Adalat: For recovery of smaller loans, the RBI has suggested Lok Adalats. It is voluntary process and works on the principle that both parties to the dispute are willing to sort out their dispute amicably. Through this mechanism, disputes can be settled in a simpler, quicker and cost effective way. Lok Adalats are conducted by State Level, District Level and Taluk Level Legal Services Authority in the respective states.

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3.9

RISK MANAGEMENT

Risk is inherent in every business and in daily life. Identifying, monitoring, measuring and controlling are the major steps in Risk Management. The Bank has been continuously upgrading and fine-tuning the Risk Management Systems in tune with international best practices and directions issued by Reserve Bank of India. The bank has implemented Basel-II as on March 2008 and has complied with the requirements. The Bank has procured Capital Assessment Model (CAM) from CRISIL to compute capital for credit risk as per Basel II requirement. The bank has also appointed M/S Ernst & Young as consultants for operational risk management. The main functions of this department are: 1. Foreign Exchange: The bank is required to maintain foreign Exchange reserves as per the RBI guidelines. The total Foreign Exchange Turnover of the Bank stood at Rs.4,94,837 crore as on March 2008 as compared to Rs.5,94,983 crore for the previous financial year. Reduction in arbitrage swaps is the main reason for the decline in forex turnover. 2. Asset n liability management : The Bank has put in place a robust Asset Liability Management (ALM) system. ALM is implemented mainly to measure, monitor and manage market risks, which ultimately results in increased Net Interest Income of the bank. The Bank is having an effective high level Asset Liability Committee (ALCO) comprising top executive so as to measure, monitor and manage risks such as Liquidity, Interest rate, market, forex etc. bank has implemented the Asset Liability Management (ALM) system as envisaged by the RBI. Data collection and reporting of data is done on fortnightly basis to ALCO. The ALCO has been able to reconstruct the asset and liability mix to reduce the risks at desired level., as such it is used for proper ______________________________________________________________ 34

Syndicate Bank ______________________________________________________________ pricing. The bank is in the constant process of fine-tuning and improving the existing ALM structure system.

3. Gold selling: Syndicate Bank sells gold coins under the brand name Syndsona through its 104 select branches spread across eight States. The coins in denominations of 4 gm, 8 gm and 10 gm in tamper proof card with 999.9 purity certificate is sold through its designated branches. The bank imports the gold coins exclusively from Switzerland. The bank had tied up with the existing clients and corporates for the sale of gold coins. 4. Fund Investment and Management: The company also helps its customers to invest their money in mutual funds, NSC certificates etc.

5. Interest Rate Formulation: The bank has both fixed and floating interest rates and fixes these rates on the basis of market scenario, risk involved etc.

6. Managing Overall Credit Rating Of The Bank: Typically, a credit rating tells a lender or investor the probability of the subject being able to pay back a loan. The Bank recently reduced its lending rates on housing loans, consumer credit and loans to women entrepreneurs. The rate cuts are in 0.25-1.5% range. On March 26, the Bank has entered into an MoU with CARE, one of the leading credit rating agencies in the country. The MoU was signed to utilize the services of CARE for supporting SMEs by making available affordable, transparent, comprehensive and reliable rating services to enhance credit acceptance.

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3.10

RETAIL MARKETING

The Bank has been keeping a close watch on the market dynamics and introduction of new products and services are tailored and customized to suit the customers' requirements. During the year 2007-08, the Bank has launched innovative new products and services to its existing portfolio. The bank has launched various products since its inception to cater to its customers needs. These products are: B. PARA BANKING ACTIVITIES : 1. Syndicate Bank Global Debit Card 2. Syndicate Bank Global Credit Cards C. BANCASSURANCE: 1. Life Insurance Products 2. Non Life Insurance Products 3. Cash Management (SCMS) deposit schemes D. Deposit schemes 1. Synd 400 Plus and Synd 500 Plus 2. Savings Deposit Account 3. Special Premium Savings Accounts (CBS branches only) 4. Fixed Deposit 5. Vikas Cash 6. Social Security Deposit 7. Senior Citizens Security 8. Syndicate Suvidha ______________________________________________________________ 36

Syndicate Bank ______________________________________________________________ 9. Cumulative Deposit 10. Synd Corporate 11. Suvidha Deposit 12. SyndTaxShield Deposit Scheme 13. Pigmy Deposit 14. Super Premium Savings Bank Account 15. Synd Samanya Savings Bank Account (No Frills Account) 16. SyndFlexi Current Account

E. SYND BANK SERVICES (BPO)

F. LOAN PRODUCTS : 1. SyndRent 2. SyndSaral 3. SyndSenior 4. SyndNivas 5. SyndKisan 6. SyndVahan 7. Synd Laghu Udyami 8. Synd Mahila 9. Synd Mortgage Synd Pravasi 10. SyndSmallCredit Synd Suvidha 11. Synd Udyog 12. Synd Vyapar 13. SyndShakti

G. AGRICULTURAL LOAN PRODUCTS 1. Animal Husbandry Scheme ______________________________________________________________ 37

Syndicate Bank ______________________________________________________________ 2. Development of Irrigation Infrastructure 3. Farm Mechanization 4. Hi-tech Agriculture 5. SyndJaiKisan 6. Jewel Loans for Agriculture 7. Land Development Schemes 8. Purchase of Land For Agricultural Purpose 9. Rural Employment Generation Program 10. Solar Water Heater 11. Syndicate 2/3/4 Wheelers Scheme 12. Syndicate Farm House Scheme 13. Syndicate Kisan Credit Card(SKCC) 14. Tenant Farm Loan

H. OTHER SERVICES : 1. Tele Internet Banking 2. Any Branch Banking 3. Multi City Accounts 4. Synd Bill 5. On-Line Collection of Direct Taxes 6. On-line Railway Ticket Booking 7. Western Union Money Transfer 8. SyndInstant - (RTGS System for instant transfer of funds 9. Electronic Funds Transfer (EFT) System 10. Syndicate Gift 11. Insurance Cover for Deposits 12. Stop Payment Facility 13. Dormant Accounts 14. Safe Deposit Lockers ______________________________________________________________ 38

Syndicate Bank ______________________________________________________________ 15. Tele Banking 16. Internet Banking 17. Any Branch Banking 18. Multi City Accounts 19. Synd Bill Pay 20. On-Line Collection of Direct Taxes 21. On-line Railway Ticket Booking 22. Western Union Money Transfer 23. SyndInstant 24. Electronic Funds Transfer (EFT) System 25. Syndicate Gift Cheques

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Syndicate Bank ______________________________________________________________

CHAP 4

SWOT ANALYSIS

4.1 Swot Analysis

4.1

SWOT ANALYSIS

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Syndicate Bank ______________________________________________________________

STRENGTHS: 1. The bank is a pioneer in introducing several initiatives such as agricultural financing and door-to-door banking, which are now recognized as benchmarks by the industry. 2. So far, the bank has won 25 awards for its excellence in providing banking services. It also offers a wide range of products to serve various needs of its customers. 3. The bank is the first public sector bank to provide BPO services and is also ISO certified. 4. The bank is well aware of its social responsibility and has been actively involved in the development of the society since its inception.

WEAKNESSES: 1. Increasing NPA. 2. Poor qualification of many employees. 3. It has just started implementing its core banking solutions across many of its branches. Many public sector banks have made much progress in this area. OPPORTUNITIES: 1. It has created a good customer base and it is time that it leverages on this strength to cross sell and up sell its various products to them. 2. Expansion prospects in retail, SME and agricultural sector. 3. The Bank should enhance its technological capabilities to differentiate products and services from those of its competitors and continue to implement its Core Banking Solutions plan. 4. The Bank should also expand its presence in international markets. ______________________________________________________________ 41

Syndicate Bank ______________________________________________________________

THREATS: 1. Increasing competition posed by global and private sector banks. 2. The excessive time taken by the government to give compensation because of the recent loan waiver announced in the March 2008 Finance Budget. 3. Better performance by private sector banks as well as some of its public sector counterparts.

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Syndicate Bank ______________________________________________________________

CHAP 5

FINDINGS

Findings Recommendations & Suggestionss 5.1 FINDINGS

1. Syndicate Bank is Indias seventh largest public sector bank (in terms of total deposit). 2. It is the 9th most customer friendly bank in India according to Outlook Money (edition Sep 2007) and secures 11th position when it comes to spending on IT according to DQINDIA (edition Jan 2008). 3. As many as 58 per cent of the bank's branches are in rural areas. 4. The average age of the employees is 40+. 5. In BSE, the Bank is listed in Group (B). 6. At CBS branches the working hours are 5 on and 4 on weekdays and Saturday respectively. While non CBS branches work for 4 hours on weekdays and 2 hours on Saturday. At select branches, 7 day banking is also practiced. 7. Syndicate Bank has become the first public sector bank to enter the BPO segment. It is one of the first public sector banks to go in for CBS as well. 8. Syndicate Bank has also been awarded an ISO 9001:2000 certificate. 9. The Bank is a founder member of the Cash Tree consortium of 12 Banks with total number of ATMs under the network to over 4500. 10. The bank has tie-ups with companies like Reliance, Bajaj Allianz, TCS, Emami Bio-Tech Ltd, Western Union, Sree Kshetra Dharmasthala Rural Development Project, and RUDSETI etc. ______________________________________________________________ 43

Syndicate Bank ______________________________________________________________ 11. The Bank is listed on the National Stock Exchange, Bombay Stock Exchange and Bangalore Stock Exchange. 12. The layout of the Bank is spacious and has proper seating arrangement (like chairs, sofa etc.) and water coolers too to make the customers feel comfortable upon their arrival in the bank.

5.2

RECOMMENDATIONS

1. The bank has a lot of scope to enhance its retail banking. The keys to its retail strategy can be developing new products and services, networking its branch locations, developing its distribution channels including ATMs and internet banking. 2. The bank should expand its presence in international markets. 3. The bank should also enhance its technological capabilities and continue to implement its Core Banking Solutions plan. This connectivity will help it understand its customers better, manage its customer relationships and allow it to offer a large number of value added products and to sell its products more effectively. 4. Having such a strong technological base, the bank must use these capabilities to differentiate its products and services from those of its competitors. 5. Though the bank has a nationwide presence in the agriculture and small-scale industry sectors but it still has a lot of scope for strengthening its priority sector banking business. One aspect of its strategy could be to further strengthen its ties with the agricultural community by providing training and social support programs for the rural populace. 6. Non-performing assets are affected by number of factors e.g., increased competition, a recession in the economy , decrease in agricultural production, decline in commodity and food grain prices, ______________________________________________________________ 44

Syndicate Bank ______________________________________________________________ adverse fluctuations in interest and exchange rates, changes in Government policies, laws or regulations, business expansion. Since the bank has huge NPA, it should take measures to mitigate the effect from these factors. 7. The bank needs to recruit more people to fill up the manpower requirements arising because of its expansion process. Moreover, the bank needs to recruit young blood too. 8. The Bank should market its products more aggressively to attract more customers and combat competition posed by the private sector players.

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Syndicate Bank ______________________________________________________________

6.1 BIBLIOGRAPHY

For the completion of this project following books and websites have been referred and help from other sources has been taken. Those are mentioned below: BOOKS: 1.STEPPHIN.P. ROBBINS ORGANIZATIONAL BEHAVIOUR 2. C.P MEMORIA HUMAN RESOURCE MANAGEMENT 3. PHILIP KOTLER MARKETING MANAGEMENT

WEBSITES: 1. WWW.GOOGLE.COM 2. WWW.SYNDICATEBANK.IN 3. WWW.ECONOMICTIMES.COM

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