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MEANING OF RETAIL Retail means sale of goods in small quantities, it is concerned with buying of goods in small quantities from

the wholesaler and selling them in small quantities to the ultimate consumers as per their requirements. The person engaged in this trade is called the retailer. He acts as a link between the wholesaler and the customers. In retail trade goods are sold to the ultimate consumers for personal use and for the use of the business in small quantities only. The retailer does not specialize in a particular line or a particular product. Rather he maintains a large variety of goods. Generally, sales are limited to a local and on a small scale. MEANING OF BANKING Banking has come to occupy a pivotal position in a nations economy. According to the modern concept, banking is a business which not only deals with borrowings, lending and remittance of funds, but also an important instrument for fostering economic growth. The Banking Regulation Act 1949, defines the term banking as the accepting for the purpose of lending or investment of deposits of money from the public or otherwise and withdraw able by cheque, draft, order or otherwise. Thus, the essentials of banking are:
(1) There should be acceptance of deposited. (2) Deposits should be from the public. (3) Deposits should be repayable on demand or expiry of a term or after a specified periods. (4) The purpose of deposits should be lending or investment.

Bank is an institution which deals in money and credit. It buys money from depositors and sell to the borrowers. It is body of persons whether incorporated or not who carry on the business of banking. A bank may defined as a corporation or person which collects deposits from the public, repayable on demand and which supplies and facilitates all kinds of exchanges.

RETAIL BANKING Retail banking means mobilizing deposit form individuals and providing loan facilities to them in the form of home loans, auto loans, credit cards, etc, is becoming popular. This used to be considered by the banks as a tough proposition because of the volume of operations involved. But during the last couple of years or so, banks seem to have realized that the only sustainable way to increase deposits is to look at small and middle class consumer retail deposit and not the price sensitive corporate depositors. With financial sector reforms gathering momentum, the banking system is facing increasing companies from non-banks and the capital market. More and more

companies are tapping the capital market directly for finance. This is one of the main reasons for the banks to focus vigourously on the much ignored retail deposits. Another reason is the current liquidity the margins are 1 to 2 percent above the prime rate; in retail market they are 3to4 percent.
It is reported that Indian retail market has the potential to be second only to the USA. National Readership Survey 5puts Indian households with monthly of over Rs. 5000 at 4.5 million. According to the survey, the category of households with annual income of Rs. 2 lakhs and above is growing at the rate of 30 per cent per annum. No winder, banks with vision and insight are trying to woo this market through a series of innovative additions to their products, services, technology and marketing methods. Fixed and unfixed Deposits, (cluster deposits which can be broken into smaller units to help meet depositors overdraft without breaking up entirely), centralised database for any branch banking (whereby the customer can access his account in any of the branches irrespective of where the account is maintained), room services (whereby the customers are visited at their residences offices to enable them to open their accounts), automatic teller machines, tele banking network, extended banking time, courier pickup for cheques and documents, etc are some of the privileges extended to the customers by the banks in are eagerness to cultivate the retail market. In short, in the bold new world of retail banking the customer is crowned as king. RETAIL BANKING-A COOL OASIS

To bankers struggling through the shifting sands of corporate credit, retail banking looks like a cool oasis. Corporate Credit, retail banking looks like a cool oasis. Corporate customers rely less on commercial banks every day as other fund raising avenues present themselves. As this disintermediation takes place and competition shrinks margins, retail banking has gained an irresistible allure for banks because of its apparently higher margins and potential fir growth. With their large branch networks, banks have secured sizeable deposits-23 percent of GDP. On the assets side, however, retail advances account for a mere seven per cent of total lending. The penetration of products like car loans or credit cards is very low. With very few focused multi-line banks, non banks are often significant players in retail lending, as HDFC is in house loans. Yet, many non-banks lack the minimum size to make the necessary investments and address the challenges of retail banking.
A large number of banks and non-banks have launched or relaunched retail products and are attempting to grow their share of the personal financial services market. Even the term lending institutions have decided that they need to go retail to raise funds. Many organization like ICICI are betting that a large part of their future growth will come from retail customers. Retail banking is much more than as opportunity to addressing dwindling margins. It is an imperative to preserve profits and market positions. Customers now have many more personal financial options, a

growing credit culture, a willingness to switch between financial services providers, and a demand for lower interest rates. As they witness these trends, banks realize that they cannot remain passive. The new private sector banks are making inroads in the markets they serve, while competition from non-banks is growing. In respect, older institutions need to revamp their distribution capabilities, customer management capabilities, operating culture, compensation system and operations processing.

WEB IMPACT ON BANKS RETAIL REVENUES: For all those gurus whove been predicting that the net will end the business of said banks, heres a shocker. Even in the SILICON valley-driven USA, Internet is not expected to have a major impact in banks retail revenues. The reason: the absence of a convenient alternative at present to using cash. According to a report by moodys Investors service, at least in the intermediate term, the internet is not expected to impact large US banks core profitability or competitive position. This is despite the despite business being the simple-most important profit source for most American retail banks. The core retail banking business of deposit taking will be sheltered form web-based competitors and margin shrinkage on this business. Need for convenient access to physical locations coupled with the advantages of multiple delivery channels like branch, ATM, telephone and computers, consumers need to leave money in transactional accounts; customer inertia and the relatively limited cost savings available to consumers from net banking, are cited as the main factors supporting its view. The moodys report, however, cautions that other consumer business such as residential mortgages, auto loans and credit cards may be more vulnerable to web-based competitors.

However, most US banks have thin margins or low market shares in these businesses mitigating this impact, says the report made available to the Economic Times. The rating agency is skeptical of banks ability to generate substantial incremental revenues from crossselling financial products to existing customers via the net.

Banks have to maintain a comprehensive and effective web based capability to maintain their competitive position, cautions moodys. The need for customers to take frequent physical receipts, make convenient physical receipts, make convenient physical delivery of cheques using ATMs, inhibition towards paying ATM charges for using another banks ATM network by the consumer and time consuming, difficult and disruptive nature of switching accounts also contribute to the stickiness of retail deposits.

With low bank fees for individual transactions and relatively small bank deposits, the opportunity cost in terms of interest income for customers is not material where the deposits are not large.
Banks offer convenience and choice and the web-based channels of banks have reported rapid growth in the number of customers by retaining current customers. According to moodys a survey indicated that 35 per cent of Internet banking customer disconnect because they dont find it convenient. Customers prefer to use a variety of channels to conduct their banking which is why it remains to be seen whether a business model based solely on internet banking will generate adequate returns and sustain long term competition against conventional banking systems. The advent of the internet could, however have a powerful effect on banks acquisition strategies by creating uncertainty about the value of purchasing large branch networks, the study says. For some banks, however, the Internet could facilitate an increase in fee income by generating fees from Internet service arrangements like bill presentment and clearing. However, if smart cards or stored value cards or other electronic cash substitute gain popularity, alternatives could become more attractive to customers.

On the other hand, banks might be able to reduce costs of servicing the retail customers by moving them over into a paperless environment. Banks could introduce various incentives to the persuade customers to forego paper statements for the basic savings account and credit card, says moodys.


As the 1900s come to their close and we look eagerly towards the new millennium, a revolution that will change the rules and every thing we have understood of the retail market, financial products and other services. Economic boundaries are disappearing, and the global village is a reality where the retail customer will have a choice in a manner we may have never imagined. Providers of retail products and services will battle for market and market share. It is battle that will be fought at different levels and the real winner will be the customer, who will benefit from increased competition through better products, distribution, technology, pricing, and post transaction service. The quality and range of products will expand exponentially convenience of usage, customization to individual needs, and a host of other user-friendly add-ons will create a whole new frontier of applications. Companies will have to innovate and continuously upgrade their products. Anticipation, listening and responding to your customers needs, will be the buzz-words of this thrust. Distribution will be the next key benchmark of success. The customer will demand (and therefore the provider will have to respond) for greater convenience of access to the product or service and all this at the best cost of delivery. Re-defined methods, the use of technology specifically the Internet-and realigned strategies will drive this important criterion of success. Constraints of location, timing, accessibility etc will all be history. No matter how brilliant the product you have, your distribution flexibility will be the customers selection parameter. Again, quality of the product and responsive strategies for distribution will also have a link to price. Efficiencies on this front will be the next item on your report card. Through innovation in production and delivery and cost reduction strategies, the price to the customer will have to be at maximum benefit. The intelligent customer will be ruthless with any price distortions, which as a consequence of inefficiencies or market exploitation his cost benefit analysis will not allow for these variables.

Would you prefer a product, which (hopefully) is never expected to need post sale service or one which offers the best after sale service if required ? Clearly, the relationship with the customer starts with the transaction, does not and with it. Organisation we have to give equal importance to cost sale needs of customers as the pitch made prior to the sale. Technology will perhaps be the single largest driver of this detail thrust. The entire strategy will evolve around the absolute ability of the organisation to be at the cutting as edge of technology. We will have to invest in technology far ahead of immediate needs and be able to anticipate the future direction at a pace we are perhaps not used to. Being able to keep abreast, but more importantly, being able to recognize the immense potential that technology provides at all stages in the retail chain will be of paramount importance. To leverage, exploit and link technology to your business will be the greatest challenge of the new millennium and I am convinced that the retail war will be won and lost on this one aspect, purely because technology increasingly we influence on the entire chain in a retail business cycle. Above all these, I would list attitude towards customer as the single point basis on determining the winner of the race. Attitude to the customer will influence all the areas we have discussed and will ensure excellence in each one of them. It is an intangible, it is not prescribed in a manual nor is it a quantifiable item in the balance sheet, but an organizations attitude to the customer will be the basis determinant of success for any retail operation. There are interesting and challenging times ahead the future promises a lot but will also make extraordinary demands. The customer will be the most important aspect of your business and ultimately the winner of the retail war. RISK INVOLVED IN RETAIL BUSINESS There are of course, considerable risks in retail banking. They are : (a) (b) (c) (d) Databases on credit history are large. Collection mechanisms are poor. Investments in technology are large. Operating efficiency level needs to be very high.

(e) (f) (g) (h)

Unlike corporate banking, retail banking involves a large number of small accounts. Demands on processing capabilities are higher. Retail segment is not something you can get into overnight. The right systems and the right architecture needs to be put in place first.


New Private sector banks have great resource mobilizing and asset expansion capabilities which cannot be undermined by the fact these banks volume. Which have taken decades of option for the old private sector bank to build. These bank are dominating the market with new product, service3 and ideas. Information technology has enabled many private banks are emerging strong in banking and financial services with the marketing of new product and service based on technological capabilities.
In the present scenario HDFC bank Ltd. is a fast emerging bank. It has 227branches throughout the India in Rewari city HDFC has one branch also and one ATMs. Apart from the HDFC bank, the other bank like PNB, SBI which is included in study. These both are the public sector bank. SBI is the one bank in India. These two are also providing the retail banking service. Now the emergence of the retail concept of the banking customers are expecting more and better services. To day customer prefer private banks because they can have personal relationship with the bank personnel, with lesser hierachy and It is possible for these banks to forget closer ties with customers also.

HDFC Bank provide the following service :1. 3. 5. Current A/C Corporate Salary A/C Debit Card 2. 4. 6. Loan Online A/C Phone Banking

7. 9.

Intercity/ Inter Branch Banking Bill Pay


Net Banking

SBI & PNB Provides following services :-

-Demand Deposit -Time Deposit Fixed Deposit Akshaya Deposit Cumulative Deposit Pragati Deposit Current Deposit Saving Deposit

Loan :-

Housing finance for individuals Car finance Finance for consumer disables

Finance for Scooter/Motorcycles Finance against future lease Rentols Personal loan to pensioness Personal loan to serving Army officers, Govt. & other Employees Education loan scheme Advance against life policy Advance against bank deposits

- ATMs


Current A/C:Under this account a person can deposit and with draw money as many times in a day as he wants . The regulars an average quarterly balance of the Rs. 10000 only .Besides the free ATM card and easy accessibility. Your first 50 cheque leave are o

Offered free. This can be as: Premium current account From any branch HDFC bank Trade - Small business HDFC bank plus.

Loans :- To Suits every need.

A loan is a specified amount sanctioned for a period of times. Loans are granted generally against the security of assets or on the personal security of the borrower. The
borrowers may with draw the amount of the loan in lamp sum in instalment. Similarly it may be repayable in lump sum or in instalment.

HDFC bank provides following loan under the retail banking segment :-

Car Loan (For new and used cars). Personal loan.

Loans against securities and two wheelers . Consumer loan.

Car Loan :- Varity of finance schemes New Car loan :Loan amount : upto 90% Of car value Tenure : 12 to 48 month

Personal Loan :- For anything you have in mind

Holiday abroad Wedding in the family Higher education No security or granter required

Loan amount: Rs. 25000 to Rs 10 lack

Tenure :12 to 48 months. Eligibility : Salaried, individuals, self-employed doctors and CAS, CS, Engineers M.B.A.S

Two wheelers and Consumer loan :-

Whatever your dream, HDFC have a scheme Two wheelers Personal computer and AC Durable like TV, Washing Machine, Refrigerator etc. For HDFC bank A/C holders only. Loan amount : Rs. 7000 to 1 lakh (Max 85% of product value) Tenure : 6 to 36 months Eligibility : Salaried and self employed individuals

Loan against securities - An overdraft facility Loan amount Rs. 50000 to Rs. 20 lakh (upto 60%of market value of demand share) Mutual Fund Rs. 50000 to Rs. 10 lakh LIC policy Rs.100000 onwards.

Corporate salary A/c:With HDFC banks corporate salary A/C, employees receive an array of rewards with then monthly pay cheque. All at no extra coast to organisation. E-age banking service from any where, at any time: Phone banking Inter branch banking Net banking Bill payable Free phone banking Free mobile banking Free demand draft Free International debit card Direct salary credit Overdraft facility Demote A/C Joint A/C facility Free Demand Draft

PHONE BANKING: HDFC bank provides phonebanking facility to its customers. With the help of this service customers can get their account detail, ask for a cheque book or a statement, open a fixed deposit, transfer money within their own accounts, order a demand drafts, stop cheque payment etc. all by phone INTERCITY/ INTERBRANCH BANKING: At HDFC you can access your account from any of their 131 branches in 26 cities. So you can withdraw cash form another branch, through a self-cheque. You can deposit a local cheque in one branch and get it credited to your account in another city. NETBANKING : Internet banking is just like normal banking, with a one big exception that you dont have to go to the bank for transactions. Instead you can access your account any time form any part of the world, and do so when you have the time ,and not when the bank is open. Through the net banking you can transfer funds within the same bank, open a fixed deposit, get a demand draft, make a TDS enquiry request a stop payment of on a cheque, request for a new cheque book or even cheque your account balance. BILLPAY : HDFC bank provides its customers to pay their mobile bills in some selected cities over the phone as well as through their ATMs. In Mumbai you can pay BPL Mobile bills, in Delhi you can pay Airtel bills and in Chennai you can pay RPG and Sky cell cellular bills through this facility. You can also pay MTNL bills in Mumbai and Delhi and MSEB bills in Pune and Mumbai. It saves a lot of time , which you spend in long queues or writing cheques.

Debit Cards HDFC Banks International debit card provide seamless freedom and fiscal management to spending, both locally and globally.

The Debit and ATM Card, when issued as visa compliant cards, will give you the freedom to access your savings or current at merchant location and ATMs.
Whenever you make payments, the amount will be instantly debited from your account. The present ATM cards allow you to access your account 24 hours a day, all through the year.

How does it work? All you need to do is present your card to the merchant who will swipe it through the electronic terminal and enter the amount of your purchase. You only need to sign the transaction slip. Your account will be automatically debited for the amount of your purchase. Your debit card can be used at any merchant location displaying the visa electronic logo or at any ATM displaying the circus logo of course, you can always use it any HDFC Bank ATM as a normal ATM card.

What if your Debit Card is lost or stolen? If your card is lost or stolen, you are protected from fraudulent charges from the moment you report the loss to the bank.

Any transaction limit for the Debit Card? For the safety of the card holders, the bank have a daily limit of Rs. 15000 at ATM, (at merchant location there is no transaction limit,) and this is subject to the available balance in your account.

SBI & PNB PRODUCT RANGE Deposit Deposits accepted by bank may be categorised as demand deposit and time deposit. Demand Deposit Demand deposits are those deposits that can be withdrawn without notice. Bank undertake to repay such deposits as demand. The following types of deposit accounts are classified under Demand Deposits.

(a) (b)

Current Account Saving Account

Current Account :
Under this accounts, a person can deposit and with draw money as many times in a day as he wants. Money can be withdrawn by issuing cheques. Current acount are remunerative type of deposit accounts as no interest its payable on the credit balances outstanding in these accounts.

Saving Accounts :
This account is opened for the purpose of savings. Any purpose of savings. Any person including a minor can open this account by depositing a small sum of money. Saving Bank Account is subject to the restriction as to the number of withdrawal as also the amount of withdraw as also the amount of withdrawal permitted by banks during any specified period. However there is no restriction on the number and amount of deposits that can be made on any day. Balances in the Saving Bank Account cans interest at rates as determined by RBI from time to time.

Time Deposit Any deposit, which is repayable after a period of notice rather than repayable after a fixed date or period, is a time deposit or popularly called as term deposits. The following type of account in both banks are classified under Retail Time Deposits. Fixed Deposit Apshaya Deposit Cumulative Deposit Pragati Deposit

Fixed Deposit :-

Fixed Deposit where the depositor makes a lumpsum deposit where the depositors makes a lumpsum deposit at one time for a fixed period and receive payment there of on Maturity with interest. Apshaya Deposit :Apshaya Deposit is a reinvestment deposit Scheme where the depositors makes a lumpsum deposit at one time for a fixed period and receive payment there of on Maturity with interes

Project Report "Banking System" in India 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.

Functions of Commercial Banks :

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 banking sector in India is passing through a period of structural change under the combined impact of financial sector reforms, internal competition, changes in regulations, new technology, global competitive pressure and fast evolving strategic objectives of banks and their existing and potential competitors. Until the last decade, banks were regarded largely as institutions rather akin to public utilities. The market for banking services were

oligopolies and Centralized while the market place was regulated and banks were expected to receive assured spreads over their cost of funds. This phenomenon, which was caricatured as 36-3 banking in the united states, meaning that banks accepted deposits at 3%, lent at 6%, and went home at 3 p.m. to play golf, was the result of the sheltered markets and administrated prices for banking products. Existence of entry barriers for new banks meant that competition was restricted to existing players, who often operated as a cartel, even in areas where the freedom to price their products existed. 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.

Emerging Environment of Banking in India

Full convertibility of rupee leading to free mobility of capital, which will mean virtual collapse of the national borders for trade and capital flows. 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. Removal of lowering of existing barriers of competitiveness, which are present today in the form of quantitative instructions on certain imports protective custom duties, reservation of certain utilities for the public sector. Growing privatization and commercialization infrastructure sector. Today, Banks customers are better informed, more sophisticated and discerning. They also have a wide choice to choose from various banks and non-bank intermediaries. Their expectations are soaring. This is particularly true for banks corporate clientele but also applies to customers from personal segment. This is changing profile of customers call for a shift from product-based approach to customers-based approach. A bank aiming at maximizing customer value must, of necessity, plan for customized products. A combination of marketing skills and state-of-the-art technology should enable to bank in maximizing its profits through customer satisfaction.

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. A word about SBI card SBI Segment : Small business credit card (SBI credit card) Preamble : Small business units, retail traders, artisans, village industries, small-scale industrial units and tiny units, professionals and self employed persons etc., contribute significantly to the growth of our economy. The entrepreneur himself manages many of the units. Very often, these entrepreneurs complain of procedural delay in sanctions and renewal of limits. They also find it difficult to cope with the demands for audited balance sheet and other statements sought by the bank from time to time for availing credit facilities. With a view to providing hassle free financial supports to the above categories of entrepreneurs who have shown commitment to run the unit successfully and who are dealing with the banks for last two years satisfactorily, new and friendly credit product namely small business credit card scheme is designed. Under the scheme, cumbersome procedural aspects relating to reviews and renewals, submission of balance sheet, stock statements and other statements are done with credit delivery made simple and easy. 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 : Loan up to Rs. 5 Lakh can be sanctioned to eligible persons.

Assessment : The small business credit card limit can be fixed as follows :

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 : No refinance is to be claim from SIDBI Security :

Primary : Hypothecation of the stock in trade receivables, machinery, office equipment. Collateral : Under SSI-No collateral security as per existing guidelines of RBI. 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 : Up to Rs. 25000/- - NIL Rs. 25001/- to Rs. 5,00,000/- - 20% Documentation : Documents as per extant instructions. Credit Card - A Convenient Banking Product : 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. Small business credit card

Card No. Name Account No. Tel. No. Limit Rs. Date of issue Valid upto .. (Branch Code) Card holders Photograph with signature

Signature of the Brach Manager

The borrower would be issued a photo card indicating sanctioned limit and validity of the limit (sample card)

Insurance :

Fixed assets/stock pledged/hypothecated to the bank be fully insured at least to the extent of the bank interests. Bank may waive insurance of assets for equipment against the fire and other risk up to Rs.25000/-

Cover under credit guarantee scheme : 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 :

Small business credit card accounts should be maintained in a separate ledger. Cheque book should be issued and marked as small business credit card account. Pass book should be issued for mall business credit card holders. Stock statement waived. Submission of audited balance sheet waived. Borrower would be issued a small business credit card with photograph thereon. Cost of photograph to be borne by banks. IRAC norms would be applicable. Brief opinion report should be recorded. Marked inquiries should be made and recorded in the opinion report and singed by the field officer/cash officer or officers not below that rank. Units within a radius of 5 kilometers may be covered intensively for the issue of credit card. This condition may be waived for such of those units already in the book of the branch.

Inspections :

Half-yearly inspection/monitoring to ensure the end user funds.

Sanction :

Required loan may be sanctioned with in a week after receipt of detailed information. Control return after sanction may be sent to next higher authority for approval .

Scoring Model :

Loan would be sanctioned up to Rs. 5,00,000/- based on the simplified scoring model as given in annexure- II. Those who are scoring less than 60% would not qualify for the loan.

Rationale :

New schemes for hassle free credit facilities to small borrower.

Automatic Teller Machine (ATM) 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

Features of State Bank Cash Plus Card

State Bank Cash Plus Card having the 19 digit. Name of the card holders mention there on it. In case of State Bank Cash Plus Card, there is no expiry period but for the old card, the date after which your card needs to be renewed is the last day of the month indicated on your card. Signature panel on which you must sign as soon as youre your card. It identifies the card as your State Bank Card Plus Card. The magnetic stripe, which contains encoded information. ATM card possess pincode which having the 4 digit.

Use of State Bank Cash Plus Card

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.

Significance of the Study

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.

Review of Existing Literature :

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.

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 Manage

Focus of the problem

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.

SBI Card holders Non SBI Card holders

Objective of the Study

To find out the market potential of SBI card in Bhiwani.

To know customers perceptions about various credit schemes of different banks.

To compare the credit schemes of different banks. 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.

The information provided by the respondent may not be authentic.

The sample size was restricted to Bhiwani only.


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 the profile of organisation has been also covered.

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 inserted. At last the conclusion is drawn on the basis of this data. 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 is used for collecting the data.

Universe or survey population

All the customers availing credit schemes in Bhiwani is our universe while the sample size is 50. The sample unit is individuals. Criteria of selecting sample : We are taking the sample on our convenience. Sampling techniques : Sampling techniques may be divided into two categories : (1) Probability sampling : Probability samples are characterized by the fact hat each element of the population has known, non-zero chance of being included in the sample. (2) Non-probability sampling : Non-probability sampling involves personal judgement somewhere in the process. For the present study, convenient technique of sampling (non-probability) was used.

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 threeresearch design available : .

Exploratory Research

Descriptive Research Casual or Experimental Research

Data Collection : There are two sorts of data available : 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. Methods of Data Collection :

Observation Method Questionnaire Method

Identified Independent and Dependent variables : Independent variables : All the external factors are independent variables :

Govt. policy of RBI Environmental factors

War Technology Natural Calamities

Dependent variables : All the internal factors of organization are dependent variables :

Company policy Infrastructure Table No. 1 Awareness level about various credit facilities YES 46 NO 04

Most of the respondent are well awared about the credit facilities of different Banks

Table No. 2

No. of respondents availing the credit facilities YES 44 NO 06

Most of the respondent are availing credit facilities from Banks.

Table No. 3 Distribution of Respondents availing the credit facilities from banks. SBI 18 PNB 14 UCO 04 IOB 06 Others 02

Nearly 40% of the Respondents are availing credit facilities from SBI followed by PNB.

Table No. 4 Time since customers are availing credit facilities More than 3 10 2 to 3 16 1 to 2 14 Less than One 04

Most of the respondents are availing the credit facilities ranging from 1 to 3 years.

Table No. 5 No. of satisfied customers Yes 32 No 12

Customers are highly satisfied with their banks.

Table No. 6 Awareness level about various credit facilities of different banks SBI 42 PNB 40 IOB 22 UCO 14 CANARA 12 OBC 08

The credit facilities of SBI and PNB are well known to every respondent.

Table No. 7 (a) Ranking of banks on the basis of interest rate SBI 30 PNB 27 IOB 08 UCO 13 CANARA 08 OBC 14

SBI and PNB are the most preferred banks in regard of interest rates.

Table No. 7 (b) Ranking of banks on the basis of collateral security requirement SBI 26 PNB 30 IOB 16 UCO 10 CANARA 06 OBC 12

Respondents are very much satisfied with SBI and PNB in respect of collateral security requirement.

Table No. 7 (c) Ranking of banks on the basis of attitude of the employees SBI 28 PNB 27 IOB 20 UCO 8 CANARA 10 OBC 07

Respondents appreciate the attitude of employees of the SBI, PNB and IOB.
Table No. 7 (d) Ranking of banks on the basis of services SBI 26 PNB 32 IOB 26 UCO 06 CANARA 06 OBC 04

Respondents appreciate the level of services provided by SBI, PNB and IOB. Table No. 7 (e)
Ranking of banks on the basis of documents required SBI 28 PNB 24 IOB 18 UCO 12 CANARA 08 OBC 10

Customers are happy with the document requirement of SBI and PNB.

Table No. 7 (f) Ranking of banks on the basis of renewal process SBI 38 PNB 22 IOB 16 UCO 08 CANARA 08 OBC 08

Customers are very much satisfied with the renewal process of SBI and tanks to SBI card.
Table No. 8 Main obstacle while getting finance (a) Security (b) Document Requirements 24 08 (c) Red Tapisam 04 (d) Guarantee requirement 08 (e) Attidute of Bank Employees 06

Security requirements are the main obstacle while availing any credit facility.
Table No. 9 Preference order of different parameters (a) Interest Rate 42 (b) Collateral Security 12 (c) (d) (e) Services (f) Document requirement 14 Validity

Attitude of Bank Emp. 08



Customer prefer low interest rates followed by services. Table No. 10 Preference level of banks SBI 56 PNB 24 IOB 10 UCO 04 CANARA 04 OBC 02

More than half of the respondents prefer SBI followed by PNB.

Table No. 11 Awareness level of SBI Card Yes 38 No 12

A good awareness level is exist about SBI cards.

Table No. 12 Sources of information about SBI card Friends 22 Bank Employees 04 Advertisement 06 Publicity 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. Most of the respondents covered in the survey know about the SBI card and feel that this facility is beneficial to them as they can fix the limit for three years. Respondents even require further guidance related to few things. Customers feel very enthusiastic about the launch of SBI card in Bhiwani and very sure about its success. Most of the respondents want an increase in existing limit i.e. 5.00 lacs.

Objective No. 2 : To know customers perceptions about various credit schemes of different banks. Most of the respondents like the credit facilities provided by SBI and PNB. According to most of respondents, PNB is the fastest service provider. It takes only 15 days to disburse the sanctioned loans whereas other banks including SBI takes 40 to 45 days.

PNB is offering the lowest PLR i.e. 11.25% whereas other banks are offering 11.5%.

Objective No. 3 : To find out main obstacle while getting finance under various credit schemes. According to most of respondents, security and document requirement are the main obstacles while getting finance under various credit schemes.

On the basis of data analysis and interpretations, the following suggestions can be made. RBI Should reduce the SLR and CRR to increase the credit creation capacity of the banks.

All the nationalized banks should try to improve their service level to face the stiff competition given by private banks..

Banks should reduce the time length between sanction and disbursement of loan. SBI should increase the limit under SBI card to fulfill the growing requirement of the customers.

Bank employees should bring more professionalism in their attitude while dealing with customers to retain and attract more customers.

Banks should narrow down the spread between PLR and deposit rates. Banks should advertise and conduct special awareness programs to make SBI cards more popular among customers.

Name Income... Age . Occupation...

Q1. Are you aware of various credit facilities of banks ? Yes No

Q2. Are you availing credit facility from any bank ? Yes Q3. No

If yes, from which bank you are availing credit facility ?

Q4. Since when you are availing this facility. a) More than 3 year b) 2-3 years


1-2 years


Less than 1 year

Q5. Are you satisfied with your existing bank ? Yes Q6. No

If no, then why . ..

Q.7 Tick the name of banks whose credit facilities are known to you ? a) d) SBI CANARA b) e) PNB UCO c) f) IOB OBC

Q8. Rate the banks on the basis of following parameters :

Factors Interest Rate Banks


Collatarel Security

Attitude of Field officer


Document Renewal required process

According to you what is the main obstacle while getting finance under various credit facilities? a) c) e) Security Red Tapism b) d) Document Requirement Guarantee requirement

Attitude of bank employees

Q10. According to you arrange the parameters in the descending order of their preference? a) c) Interest Rate Services b) d) Collateral Security Attitude of field Officer


Document required


Validity period

Q11. Which banks name comes to your mind first while availing credit facility and why? .. .. Q12. Have you heard about SBI card? Yes No

Q13. If yes, from where? a) c) Friends Advertisement b) d) Bank Employees Publicity

Q14. Do you want to give any suggestions to banks? . .