Topic Name

Bachelor of Commerce
Banking & Insurance
Semester-V

(Academic Year)

Submitted by

Name of the Student

Roll No.

KISHINCHAND CHELLARAM COLLEGE

124, Dinshaw Wachha Road,
Churchgate, Mumbai-400 020

Topic Name

Bachelor of Commerce
Banking & Insurance
Semester-V

Submitted

In Partial Fulfillment of the requirements

For the Award of Degree of Bachelor of
Commerce- Banking & Insurance

By

Name of the Student

Roll No.

KISHINCHAND CHELLARAM COLLEGE

124, Dinshaw Wachha Road,
Churchgate, Mumbai-400 020
,

KISHINCHAND CHELLARAM COLLEGE

D.W ROAD, CHURCHGATE, MUMBAI-20.

CERTIFICATE

This is to certify that Mr._________ Roll No. ___ of B.Com.Banking & Insurance Semester- V (2015-16) has successfully
completed the project on _________________ under the
guidance of ______________.

Course Co-ordinator

Project Guide/ Internal Examiner

External Examiner

DECLARATION

Principal

I _________________________________________________ the
student of B.Com (Banking & Insurance) Semester V (2015-16) hereby declare that I
have completed the project on ______________________________________________.

The information submitted is true and original to the best of my knowledge.

Signature of Student

(Name of the student)

CORPORATE BANKING

The last decade has seen many positive developments in the Indian banking
sector. The policy makers, which comprise the Reserve Bank Of India (RBI).
Ministry of finance and related government and financial sector regulatory
entities, have made several notable efforts to improve regulations in the sector.
The sector now compares favourably with banking sectors in the region of
metries like growth, profitability and non performing assets (NPAs). A few banks
have established an outstanding track record of innovations, growth and value
creation. This is reflected in their market valuation. However

improved

regulations, innovations growth and value creation in the sector remain limited to
a small part of it. The cost of banking intermedation in India is higher and bank
penetration is far lower than in other markets. Indians banking industry must
strengthen itself significantly if it has to support the modern and vibrant economy
which Indian aspires to be. While the onces for this change lies mainly with bank
management can enabling policy and regulatory framework will also be critical to
their success.
The study involves the different types of services offered b banks for corporate.
The essence of banking business is the function of accepting deposits from
public with the facility of withdrawal of money by cheque. Besides from the usual
services, banks now have started giving additional services right from working
capital needs to investment banking.Working capital is the core area of banking
industry today.
This project contains both primary and secondary data

1.INTRODUCTON

Corporate banking represents the wide range of banking and financial services
provided to domestic and international operations of large local corporate and
local operations of multinational corporations. Services include access to
commercial banking products, including working capital facilities such as
domestic and international trade operations and funding channel financing in
foreign and overdrafts as well as domestic and international payments, INR term
loans (including external commercial borrowings in foreign currency), letters of
guarantee etc
Corporate banking services are an integral part of the corporate investment,
Banking and markets (CIBM) structure, which focuses on offering a full range of
services to multinational, large domestic corporate and institutional clients. The
investments banking and markets division brings together the advisory and
financing, equity securities, asset management, treasury and capital markets,
and private equity activities of the group to the complete the CIBM structure and
provide a complete range of financial products to the clients.
Clients are serviced by sector based clients services teams that combine the
relationship managers, product specialists and industry specialists to develop
customized financial solutions. These form the relationship team along with the
Investments banking and advisory division. Each team supports the clients
worldwide operations, ensuring a full understanding of the companys business
and financial needs.

2. OBJECTIVES

 To understand the conceptual framework of corporate banking

To understand the several areas under corporate banking.

To learn about the lending procedure of the banks to the corporate.

To find out the various products and services offered by banks.

To understand the future growth prospectus in corporate banking

3. Research Methodology:

1. Primary data collected through Questionnaire filled by both bank and

corporate.

2. Secondary data collected from books and websites.

2. PROFILE OF FEDERAL BANK

Though initially it was known as the Travancore Federal Bank, it gradually

transformed into a full-fledged bank under the able leadership of its Founder, Mr.
K P Hormis. The name Federal Bank Limited was officially announced in the year
1947 with its headquarters nestled on the banks on the river Periyar..

2.1Vision:
Become the dominant numero uno bank in Kerala and a leading player
in target markets.
Be the trusted partner of choice for target (SME, Retail, NRI) customers.
Be a customer-centric organization setting the benchmarks for service.
Offer innovative yet simple products supported by the state-of-the art
technology.
Have a dynamic and energized workforce with a strong sense of
belonging.
Deliver top tier financial performance and superior value to stakeholders.
Be a role model for corporate governance and social responsibility

2.2Mission

Devote balanced attention to the interests and expectations of stakeholders, and

in particular:
Shareholders: Achieve a consistent annual post-tax return of at least 20% on
net worth.
Employees: Develop in every employee a high degree of pride and loyalty in
serving the Bank.
Customers: Meet and even exceed expectations of target customers by
delivering appropriate products and services, employing, as far as feasible, the
single-window and 24-hour-seven-day-week concepts, leveraging strengthened
branch infrastructure, ATMs, and other alternative distribution channels, crossselling a range of products and services to meet customer needs varying over
time, and ensuring the highest standards of service at all times.
Develop, adopt, and review a well-conceived business plan for achieving realistic
targets of growth, profitability, and market share over the medium term.
Operate within a well-defined, diversified, risk profile and adopt prudent riskmanagement norms and processes and effective control practices.
Employ and leverage appropriate modern information technology to: enhance the
quality, speed, and accuracy of product/service delivery; provide anytimeanywhere banking facility; strengthen management information and control
systems and processes; improve productivity; and reduce costs.
Increase awareness of the "Federal Bank" brand among targeted customer
groups through cost-effective marketing.
Adopt a robust corporate governance code emphasizing a high degree of
professionalism of the Board and the management, and accountability and
disclosure to shareholders. Decentralize decision making with accountability for
decisions made, and assign cascading profit responsibilities to middle and junior
management.Develop a conducive and transparent work environment that

fosters staff commitment, competence, initiative, innovation, teamwork and

service-orientation.
Future:
We are the fourth largest bank in India in terms of capital base and can easily
boast of a Capital Adequacy Ratio of 17.23 %, one of the highest in the industry.
This along with the existence in a highly regulated environment has helped the
bank to tide over the recession with minimum impact to its financial stability.
In fact we have been expanding organically over the past few months. We
believe in extending our reach to our customers by making our services available
to all, 24x7. We have Branches and ATMs across India in addition to the
Representative Office at Abu Dhabi that serves as a nerve centre for the NRI
customers in UAE.
We are transforming ourselves, keeping our principles in tact, into an
organisation that offers service beyond par.Being in the service industry we are
conscious of our surroundings and what happens in the society.
Our Large Corporate team offers customized structured products to meet the
specialized requirements of corporates, institutions and business clients. Each
member of our Corporate Finance team brings with him a wealth of transaction
experience across transaction varieties and sectors to cater to you better.

We

have emerged as one of the leading private sector banks in the country, in
providing a gamut of products for industry, trade and infrastructure sectors. We
serve a wide range of customers across varying industries, segments and
regions.

2.3Products and Services

Term Loans
We can structure credit solutions to meet your specific short-term or long term
funding requirements. We provide structured term financing solutions for
infrastructure, project funding, real estate and other corporate purposes. The
loans are provided at competitive rates and are structured to enhance your
profitability by scheduling the repayment to match the cash flow available to
repay the debt.
Corporate Loans
For a variety of business related purposes to corporates
Working capital finance
We offer working capital finance by way of cash credit, overdraft or working
capital loans suitably structured to your needs and your risk profile as a part of
consortium or as a sole banker. These products are designed to ease the liquidity
position of the client.
Bill Finance
Trade finance by discounting bills
Export\ import finance
Pre and post shipment finance, forward covers, buyers credit and finance in
foreign currency.
Letter of Credit
We provide for opening inland and import letter of credit facility to facilitate
procurement of inventory and capital goods.
Bank Guarantees

We offer to issue various types of guarantees - performance, financial, bid bond

etc. Our guarantees are well accepted by government agencies, Capital Market
Agencies and all major corporate

2.4 Various facets of banking.

Adopt best industry practices.

Develop, adopt, and review a well-conceived business plan for achieving

realistic targets of growth, profitability, and market share over the medium
term.

Operate within a well-defined, diversified, risk profile and adopt prudent

risk-management norms and processes and effective control practices.

Employ and leverage appropriate modern information technology to:

enhance the quality, speed, and accuracy of product/service delivery;
provide anytime-anywhere banking facility; strengthen management
information and control systems and processes; improve productivity; and
reduce costs.

Increase awareness of the "Federal Bank" brand among targeted

customer groups through cost-effective marketing.

Adopt a robust corporate governance code emphasizing a high degree of

professionalism of the Board and the management, and accountability and
disclosure to shareholders.

Decentralise decision making with accountability for decisions made, and

assign cascading profit responsibilities to middle and junior management.

Develop a conducive and transparent work environment that fosters staff

commitment, competence, initiative, innovation, teamwork and serviceorientation.

3.1 Corporate Banking operations:

The bank mostly lend against appropriate tangible securities such as deposits,
shares, debentures, proprety,guarantees, supported by tangible securities, life
policies, goods, gold or other precious metal. The bank may also lend against
intangible securities such as unsupported guarantees or assignment of sums due
to the borrower by the third parties. It is essential that the bank follows the proper
procedures in order to obtain good title when taking a security. There is a
difference between possession and ownership. The various forms of documents
used for obtaining different types of securities are also important. Inadequate
documentation may well cause the losses to the bank and is particularly time for
the Trade Financing documentation and the securities agreement relating to
goods. Documents are primary evidence. If any laccina is found in
documentation, this will jeopondize the interest of the bank and may even
adversely affect the right of recovery of the documents executed properly and
correctly. Further, the documents should be stamped, wherever required.
The bank must also follow proper procedures to realise securities otherwise
losses may be incurred. The corporate operations divisions are normally
responsible for maintaining securities otherwise losses may be incurred. The
corporate operations divisions are normally responsible for maintaining securities
documentation and updating the customers mandates with fresh account
documentation account statements, financial statements and relationship
reviews. Handling and treatment of delinquent accounts is also an important area
of operations.

3.2CHANGING FACTS OF CORPORATE BANKING STRATEGY:

As a result of the advent of the internet banks and other financial instutions are
rethinking their corporate banking strategy. The internet opens a new channel for
delivering services to corporate clients and helps these institutions remove
cumbersane and expensive paper process. It is significantly cheaper and much
more flexible.
With the internet, large multinational companies that always used EDI(Electronic
Data Interchange) can save more money by eliminating the old systems,
expensive private networks and expand reach to include more business on the
supply chain. Small to medium size companies, too, can conduct business to
business transactions. The internet simply provides a two way electronic linkage
that never existed before. So, banks can now offer trusted solutions to their
corporate customers via the low cost delievery channel.
i.e, The INTERNET. And corporations will enjoy the ability to manage cash held
by their strategic banking partners in real time. Via a secure, efficient, webenabled communication system. The expected shift in volume from paper- based
transactions to electronic ones would determine the path of future technology
investments in banks and orient it towards electronic payment delivery systems.
This shifts is also driven by BANKS perceptation that electronic transactions
contribute higher

3.3IMPORTANCE OF FEE-BASED SERVICES

Deregulation and( new technology have eroded banks comparative advantages

and made it easier for non-bank competitors to enter into hitherto exclusive
banks domains. In response, banks have shifted their sales mix toward noninterest income by selling non-bank fee-based financial services by charging
explicit

fees

for

services.

According to another study titled Fee-Based Financial( Services Markets: New

Opportunities and Threats In the Internet Age by Killen Associates again, the
market for retail and commercial fee-based financial services will exceed that for
interest-based services by 2005, reaching nearly a staggering $500 billion by
2004 globally. Banks want such services to( be their primary profit source for
certain reasons. This revenue is more stable over time, assures a steady income
and more importantly, leads to a strong relationship with the corporate client.

3.4THE ACCOUNT RELATIONSHIP MANAGEMENT:

MEANING:
The account relationship managers are those who negotiate with
the targeted corporate customers with the terms acceptable to the banks and
Account Relationship Management Acceptance Criteria" or the so called "Credit
Guidelines." It should be internally placed and distributed to every credit
manager/officer. These guidelines set the minimum acceptance standards, in
simple words, the guidelines are aimed to let the account relationship
managers/officers know exactly what they should be selling, to whom, at what
price and under which conditions (securities and other terms).

DECISION MAKING:
Making a sound decision to extend credit to a corporate customer is a complex
process. This is because corporate customers are normally engaged in a wide
range of activities and are affected by a host of external and internal factors that
have direct impact on their ability to meet financial obligations. The credit
decision making should, therefore, be directed by an internal lending policy that
takes into account such factors and aims to protect the bank's assets, preserve
its reputation and optimize the relationship profitability. Based on the credit
guidelines, the account relationship executive will have to submit a credit
proposal evaluating the whole relationship. The Credit Evaluation process must
be done systematically and within acceptable standards to maintain a high

quality credit portfolio. The preparation of the credit proposal must be guided by
common sense and sensible judgement.
The amount of details the proposal should contain naturally depends on several
elements, namely the size and strength of the customer, the size of the bank's
current and proposed exposure, the socio political environment, the economy,
the industry and the bank's position in relation to other.

CREDIT EVALUATION:
The bank must place a system of credit evaluation which is based on
assessment of historical, current and projected elements stated hereunder:
a. FINANCIAL ANALYSIS:
Sales, Profitability, Performance, Funds Flow, working Capital Management,
liquidity, balance sheet conditions...etc

b. OPERATING ANALYSIS (OPERATING RISKS)

Owners, Management, Company, Industry, Markets. In summary, the credit
proposal (review) must highlight the Financial Risks and Operating Risks. It
should state the magnitude and likelihood of such risks i.e. "What if" scenarios,
and how will they be managed? Most global banks maintain their credit
evaluating standards in an internal "Instruction Manual" containing the bank's
management instructions regarding each and every aspect of the credit
extension or review process. It sets the management standard of credit
evaluation to eliminate risks and prevent the decline in profit margins on credit
facilities.

3.5 CORPORATE SERVICES PROVIDED BY INDIAN BANKS

MEANING:
Corporations, the world over are jettisoning antiquated cash management
practices and opting to put in place sophisticated cash management structures to
garner the associated economic benefits and due to reasons of expediency.

Conversely, banks have taken note of the enormous revenue potential in the feebased services segment to prop up their sagging bottom lines. While
appreciating the initiatives taken by the Administrative Staff College of India in
organizing

the

Workshop.

The some of the relevant issues, which the banks need to address are as
follows.
OBJECTIVE OF CASH MANAGEMENT:
The fundamental objective of cash management is optimization of liquidity
through an improved flow of funds. In todays highly competitive environment,
where time is considered as money, deployment of staff to render basic routine
tasks does not make economic sense. As a sequel, cash management today is
not what it used to be.
Electronic banking, which began as a passive desktop access to bank balances,
is emerging into complex processes of liquidity management through numerous
techniques.

Almost all of the corporations in advanced countries are now

planning to use the services of banks to help them collect payments on monthly
bills they issue to consumers and other types of cash management services.

IMPORTANCE OF CASH MANAGEMENT FOR A CORPORATE ENTITY:

Good cash management is a conscious( process of knowing when, where, and
how a companys cash needs will occur; knowing what the best sources for
meeting additional cash needs; and being prepared to meet these needs when
they occur by keeping good relationships with bankers and other creditors.
Scientific cash management results in( significant savings in time, decrease in
interest costs, less paper work and greater accounting accuracy. Proper cash
management creates more control( over time and funds; provides timely access
to information; enables easy employee related payments; supports electronic
payments; produces faster electronic reconciliation; allows for detection of
bookkeeping errors; reduces the number of cheques issued and earns interest
income or reduces interest expense.
Corporations with subsidiaries worldwide, can pool everything( internationally so
that the company can offset the debts with the surplus monies from various
subsidiaries.

The end result will transform treasury function( as a profit-centre

by optimizing cash and put it to good use.

Creative and( pro-active cash management solutions can contribute dramatically
to a companys profitability and to its competitive edge. The ultimate purpose of
proper( management of liquidity, needless to emphasize, is to improve the overall
productivity of funds.

3.6TYPES OF CASH MANAGEMENT SERVICES:

The menu of cash management services offered by banks abroad is indeed

diverse and tempting. The services broadly fall under collection services,
Disbursement services, Information and control services, services related to
Electronic data interchange (EDI), Commercial web banking services, Sweep
services, Fraud detection solutions, Global trade solutions and Investment
solutions. Collection Services accelerate receipt of payments from sales and
quickly turn them into usable cash in accounts.
Disbursement Services make efficient payments by reducing or eliminating idle
balances in companys accounts. Information and Control Services receive the
data and provide the management capability needed to monitor company cash
picture, control costs, reconcile and audit bank accounts, and reduce exposure to
fraud.
Financial Electronic Data Interchange (EDI) is a computerized exchange of
payments between a companys business and its customers and vendors.
Commercial Web Banking Services give a wide range of services from any
Internet connection, which can help streamline banking process quickly and
efficiently.

Sweep Services maintain liquidity and increase earnings without

having to actively monitor accounts and move money in and out of them
Information reporting solutions assist companies, which need to receive account
data that is timely, precise, and easy to access and interested in initiating online
transactions.

Investment solutions help to minimize excess balances and

maximize return on

CASH MANAGEMENT SERVICES - INDIAN SCENARIO:

It is apposite to review the Indian scenario in this regard. As we are well aware,
banks desire for funds has lost under the onslaught of the current slowdown.
Despite the offer of very soft terms corporates are refusing to borrow, while bank
deposits have been ballooning. Compelled to service the burgeoning liabilities,
but unable to lend hastily and allow their non-performing assets (NPAs) to grow,
bankers are forced to compete for the handful of safe bets among their
borrowers. Banks chose to use the opportunity to refocus their activities, seeking
clearly defined identities in terms of services and customer segments. Most of
them concentrated on cleaning up their books by peeling down their NPAs. All of
them attempted freezing of costs, improving operational efficiencies, and
boosting productivity.The strategy of the banks, which performed well, is to use
fee-based services to maintain earnings growth.

With interest rates falling, non-interest income was, unsurprisingly, the fastestgrowing component of the banks total income. Fee-based activities will
complement though not substitute the core business of lending .It is gratifying to
note that a number of banks in India are offering wide-ranging cash management
services to their corporate clients.

All the three categories of banks viz., nationalized banks, private banks, and
foreign banks operating in India are active in the cash management segment.
SBI, PNB, ICICI Bank, GTB, HDFC Bank, Centurion Bank and Vysya Bank, are
some of the active Indian banks in this segment.

Citi Bank, Standard Chartered Bank, ABN Amro Bank, BNP, ANZ Grindlays and
HSBC are the foreign banks operating in India, which are prominent among the
cash management services providers.

Currently, the turnover of cash

management services in Indian market is estimated over Rs.25, 000 crore per
month.

State Bank of India alone is estimated to handle over Rs.12,000 crore per month
through its product called SBI-FAST. Indian banks are offering services like
Electronic funds transfer services, provision of cash related MIS reports, cash
pooling services, collection services, debit transfer services, guaranteed credit
arrangements, sweep products, tax payment services, receivables and payables
management. Foreign banks operating in India are offering regional and global
treasury management services, liquidity management services, card services,
electronic banking services, e-commerce solutions, account management
services, collection management services, cash delivery management services
and investment solutions.

The cash management services offered to Indian corporate are comparable to

what their counterparts are getting in advanced countries. Banks realized that if
they do not offer the services required by corporate customers it would result in a
net loss of clientele, returns and goodwill. Banks in India need to continuously
monitor international trends in innovations taking place in providing cash
management services and swiftly offer similar services to their corporate clients.

RESERVE BANKS INITIATIVE IN CASH MANAGEMENT

The Reserve Bank of India has been taking a number of initiatives, which will
facilitate the active involvement of commercial banks in the sophisticated cash
management segment. One of the pre-requisites to ensure faster and reliable
mobility of funds in a country is to have an efficient payment system.
Considering the importance of a robust payment system to the economy, the RBI
has taken numerous measures since mid Eighties to strengthen the payments
mechanism in the country.

Introduction of computerized settlement of clearing transactions, use of Magnetic

Ink Character Recognition (MICR) technology, provision of inter-city clearing
facilities and high value clearing facilities, Electronic Clearing Service Scheme
(ECSS), Electronic Funds Transfer (EFT) scheme, Delivery vs. Payment (DvP)
for Government securities transactions, setting up of Indian Financial Network
(INFINET) are some of the significant initiatives which highlight the seriousness
with which the Reserve Bank has taken up the reforms in Payment systems.
Introduction of a Centralized Funds Management System (CFMS), Securities
Services System (SSS), Real Time Gross Settlement System (RTGS) and
Structured Financial Messaging System (SFMS) are the top priority items on the
agenda to transform the existing systems into a state-of-the-art payment
infrastructure in India by the Reserve Bank. The current vision envisaged for the
payment systems reforms is one, which contemplates linking up of at least all
important bank branches with the domestic payment systems network thereby
facilitates cross boarder connectivity. With the help of the systems already put in
place in India and which are coming into being, both banks and corporates can
exercise effective control over the cash management.

SOURCING CASH MANAGEMENT SERVICES

It is normally the client-bank relationship, which is a main consideration in
choosing a bank for cash management. Pricing, obviously, is a very dominant
factor .Making a choice between the local banks and the more highly priced
foreign banks usually depends on how cost savings are presented by the banks.
Multinational corporates with complex
respective

banks

expertise

and

treasury operations admire their

ability

to

offer

creative

solutions

Flexibility, reliability, security and stability have been cited as vital parameters for
any electronic banking system.

The systems should be tailored to provide

pertinent reports and the ability to upgrade easily in future.

The technology should allow real-time cash management with strategic banking
partners. It should integrate easily

with legal framework in place. It should

lower operating costs and resolve disputes quickly by providing secure and
legally enforceable audit trails. It should be capable of reducing risk of fraud in
electronic funds transfers and other treasury activities. It should also be able to
use a low-cost public network infrastructure like Internet, which eliminates the
need for dedicated leased lines.
CHANGING

CASH

MANAGEMENT

PROCESSES

AND

E-BANKING:

INNOVATIONS:
The enlightened participants in this Workshop are aware that the cash
management techniques have been undergoing a metamorphosis as a result of
the extensive technological advancements. Positioning finance as a valuable part
of a business organization means re-engineering of business processes.

Electronic Bill Presentment and Payment (EBPP) is now widely accepted in

Western countries. It replaces the slow and costly process of preparing and
mailing paper bills and receiving cheques as payment.

Corporations look to

electronic bill presentment and payment as an opportunity to expand marketing

and sales efforts, enhance customer care and increase efficiency, while reducing
costs. As technologies evolve with amazing speed, the IT choices facing
treasurers are becoming more intricate simultaneously increasing their
expectations too.

Today, a multinational company has tall demands from its

banker. When the treasurer sits at his desk, he expects that his computer has to
automatically update his files with real-time information on the companys
account balances. Without moving, he wants to maneuver funds between
accounts to capture more interest from pooled accounts, he demands to lag his
payments to mak his cash work to the fullest and he desires to get an up-to-date
report on the progress of his collections.

As the Internet explodes into life, companies want to be among the first to use
the Internet to market their products, receive orders, deal with suppliers and
settle transactions Corporates visualize technology as a tool to cut their costs
and improve efficiency.

CORPORATE CASH MANAGEMENT TO BENEFIT FROM ELECTRONIC

PAYMENTS:

The new electronic payment products and services offer the corporate clients an
improved bottom line by helping manage cash requirements. It helps corporate to
make the best use of their funds and provides an effective means of managing
their financial requirements
Several of the trends in cash flow forecasting favor the use of electronic
payment products like RTGS, Electronic Funds Transfer (EFT) and card
payments.
Improved technology and systems integration makes it more attractive to use
electronic payment products because these methods of payment can be
incorporated into firm-wide computing systems.
The new forecasting techniques also suggest use of electronic payments,
because they offer disaggregated revenue and spending data that can easily be
categorized

and

studied.

Electronic payments and cards provide control over incoming funds, and allow
companies to limit access to these funds to authorized parties. In addition,
limiting corporate purchases to electronic payments makes it easier for firms to
monitor cash outflows and prevent unauthorized expenditures, because these
payments are easier to document and provide an audit trail.

From the perspective of a Corporate, the electronic payment systems ensure

speed and security of the transaction processing chain, from verification and
authorization to clearing and settlement. Also it gives a great deal of freedom
from more costly labor, materials, and accounting services that are required in
paper-based processing, better management of cash flow, inventory, and
financial planning due to swift bank payments.

CHALLENGES TO COMPANIES IN AVAILING TECHNOLOGY-ORIENTED

CASH MANAGEMENT SERVICES FROM BANKS:
a. Electronic Communication with a Bank:
The first challenge facing a treasury is how to communicate electronically with a
bank, although this is often dictated by cost limitations, security concerns and the
infrastructure peculiarities of different countries. It is likely that the company itself
may be lacking the necessary expertise to choose an appropriate form of
communication where the company needs bankers advice.

b. Economic Considerations:
Costs associated with the new services do pose a challenge to small and
medium companies. A host-to-host connection is a sophisticated, direct, two-way
link between the banks and the customers computers, which is expensive to
set-up and maintain. However, it is highly automated and allows the corporate to
use more of the banks services. Small companies, unfortunately, may not be
able to afford host-to-host connection. Concerns associated with high costs may
be effectively addressed once the Internets security apprehensions have been
resolved.

c. Decisions Regarding Sourcing of Software:

The three sources of software applications for on-line banking and on-line cash
management in particular are Large banks prefer to build applications in-house
owing to their belief that it provides them with competitive advantage Bought from
independent software vendors:

3.7LIMITATIONS OF THE SERVICES:

All said and done, the Internet as it operates today has its limitations as a
medium for banking and finance. For this reason, the conventional means of
delivering electronic banking services will be maintained in parallel with on-line
systems at least in the medium term. We all agree that the technology is only as
good as its underlying services. There is no such thing as one-size-fits-all when it
comes to electronic banking products. No one product can provide an absolute
solution to all the customers.
An electronic banking product is a means of delivering banking services to the
customer and is only as good as all the operations and processes that underpin
those services.

1. Provision of CMS by Banks - Challenges and Issues:

The conventional formal line between treasury and control and between cash
and accounting strategies is fading. Now, bankers and controllers are working
together closely in seeking solutions in the complex cash management function.
In todays world, the key differentiator between a successful bank and other
bank is the stress each lays on technology. As such, let me turn your attention to
the numerous challenges bankers need to address squarely, while gearing up to
provide cash management services in a technology dominated environment.

2. Provision of Customized Services:

One important ingredient of a treasury system is customization. Banks ability to
customize a treasury system is critical. The user interface is very personal and
users want to be comfortable with the look and feel of the system.
Deployment, configuration and database options need to be flexible.

New

system should be capable of easily getting synchronized with enterprise resource

planning (ERP) and other corporate systems.

3. Need to Comprehend the Clients Line of Activity:

Bankers need to really understand the accounting and control side of its client
business.

The bankers should see themselves as strategic partners in

companys growth and need to spend a lot of time learning about the concerned
industry. W They have to use that knowledge to propose solutions that never
would have occurred to the client
4. Provision of Other Advisory Services to Clients:
Companies would like to see banks solve certain other related problems.
For instance, a company may like someone to tell it exactly what is wrong with
their MIS department. Changing systems is a major initiative with far-reaching
implications to the companies so banker cannot afford to make a mistake. As the
technology changes almost monthly, companies do expect bankers to tell them
what to do and where to spend their money.

Bankers cannot build a standard

solution always, because the customers do not pose standard problems

5. Shift to Web-enabled Services:

Web-enablement may be fashionable, but what treasurers really want is the

functionality in products that help them perform optimally. After all, the web is
only a delivery channel. Most corporate electronic banking systems currently
used are based on old technology architecture.

6. Special Consideration to Small and Medium Companies:

When the corporate scene in India is dominated by a multitude of small and

medium companies, a legitimate question that arises is, are the high-tech
banking cash management services just for the large companies or do they have
any immediate practical value for smaller companies also?

Although technology and size may not go together banks have to cost-justify the
cash management services companies use. No doubt, banks did invest a lot in
the technology-based services. But with the advent of the Internet and other
tools, banks should strive to make accessible cash management services to
middle and small companies without totally phasing out their existing hardware.

7. Need to Work as a Team:

When banks develop cash management solutions, they have to necessarily

work directly with corporate financial controllers and their staff. When outsourcing
is involved, with something as complex as payables or receivables the corporate
teams get bigger and more varied. Besides financial controllers, banks have to
work with systems people and sometimes marketing people.

8. Need to Work with Technology Vendors:

A growing number of non-bank vendors also offer payment-related services to
corporate clients in Western countries. Banks bring the strong relationships with
customers that they have built over time. No single player can do it alone in the
future because there are so many dimensions to technology and different
industries need different solutions. Alliances will have to be forged, so that
vendors with different technological pieces will work together to provide
integrated solutions.

3.8WORKING CAPITAL FINANCE

MEANING:
Working Capital facility is provided to the industry to finance day-to-day
production & sales. For production; funds are generally required for purchase of
raw materials, stores, fuel, for payment of labor, power charges, for storing
finished goods till they are sold out & for financing the sales by way of sundry
debtors / receivables.

Cash Credit facility is granted to the customers to bridge working capital gap.
The Bank also provides short term loan facility for a period of up to 1 year for the
purpose of bridging temporary cash flow mismatches arising due to various
reasons like non-realization of receivables in time, routine capex etc. The finance
extended under this category would be for meeting the funds

requirements for

day to day operations of the units i.e., to meet recurring expenses such as
acquisition of raw material, the various expenses connected with products,
conversion of raw materials into finished products, marketing and administrative
expenses, etc.. The working capital limits would be considered only after the
project nearing completion and after ensuring full tie-up of the term loan
requirements of the borrower. These limits would be either in the form of fixed
loans or running accounts and / or bill financing facility.

SECURITY:

The credit facilities shall be secured by inventories and debtors as may be

required quantum and duration of the credit and risk perception.

KEY BENEFITS:

Funded facilities, i.e. the bank provides funding and assistance to actually
purchase business assets or to meet business expenses. Non-Funded facilities,
i.e. the bank can issue letters of credit or can give a guarantee on behalf of the
customer to the suppliers, Government Departments for the procurement of
goods and services on credit. It is Available in both Indian as well as Foreign
currency.
LIMITATIONS OF WORKING CAPITAL FINANCE:

The working capital limits would require such security and personal/ third party
guarantees as applicable to general lending norms of the bank and risk
perception in respect of individual borrowal account.

Eligible Working Capital Limits would be assessed by adopting various methods

such as Projected Turnover Method, Permissible Bank Finance Method, Cash
Budget Method and Net Owned Funds Method, depending upon the type of
borrower, the aggregate working capital facility enjoyed from the banking system,
the scale of operation, nature of activity/enterprise and the duration/ length of the
production cycle, etc.

RBI GUIDELINES ON LOAN FOR WORKING CAPITAL PURPOSE:

In tune with the Reserve Bank of India guidelines on Loan System for delivery of
bank Credit for working capital purposes to larger borrowers, the same would be
extended in the form of fixed loan (working capital Demand loan) and cash credit
(running account) in the ratio of 60:40 in respect of borrowers enjoying aggregate
working capital limits of Rs.10 crore and above from the Banking system.

The working capital demand loan facility shall be for a minimum fixed term of 7
days subject to roll over at the option of the borrower concerned

SHORT

TERM

CORPORATE

FINANCE

METHODS

OF

LENDING:

Like many other activities of the banks, method and quantum of short-term
finance that can be granted to a corporate was mandated by the Reserve Bank
of

India

till

1994.

This control was exercised on the lines suggested by the recommendations of a

study group headed by Shri Prakash Tandon. The study group headed by Shri
Prakash Tandon, the then Chairman of Punjab National Bank, was constituted by
the RBI in July 1974 with eminent personalities drawn from leading banks,
financial institutions and a wide cross-section of the Industry with a view to study
the entire gamut of Bank's finance for working capital and suggest ways for
optimum utilization of Bank credit. This was the first elaborate attempt by the
central bank to organize the Bank credit.

The report of this group is widely

known as Tandon Committee report. Most banks in India even today continue to
look at the needs of the corporates in the light of methodology recommended by
the Group. As per the recommendations of Tandon Committee, the corporates
should be discouraged from accumulating too much of stocks of current assets

and should move towards very lean inventories and receivable levels.

The

committee even suggested the maximum levels of Raw Material, Stock-inprocess and Finished Goods which a corporate operating in an industry should
be

allowed

to

accumulate.

These levels were termed as inventory and receivable norms. Depending on the
size of credit required, the funding of these current assets (working capital
needs) of the corporates could be met by one of the following methods:

FIRST METHOD OF LENDING:

Banks can work out the working capital gap, i.e. total current assets less current
liabilities other than bank borrowings (called Maximum Permissible Bank Finance
or MPBF) and finance a maximum of 75 per cent of the gap; the balance to come
out of long-term funds, i.e., owned funds and term borrowings. This approach
was considered suitable only for very small borrowers i.e. where the
requirements of credit were less than Rs.10 lacs

SECOND METHOD OF LENDING:

Under this method, it was thought that the borrower should provide for a
minimum of 25% of total current assets out of long-term funds i.e., owned funds
plus term borrowings. A certain level of credit for purchases and other current
liabilities will be available to fund the build up of current assets and the bank will
provide the balance (MPBF).

Consequently, total current liabilities inclusive of

bank borrowings could not exceed 75% of current assets. RBI stipulated that the
working capital needs of all borrowers enjoying fund based credit facilities of
more than Rs.10 lacs should be appraised (calculated) under this method.

THIRD METHOD OF LENDING:

Under this method, the borrower's contribution from long term funds will be to
the extent of the entire CORE CURRENT ASSETS, which has been defined by
the Study Group as representing the absolute minimum level of raw materials,
process stock, finished goods and stores which are in the pipeline to ensure
continuity of production and a minimum of 25% of the balance current assets
should be financed out of the long term funds plus term borrowings. (This method
was not accepted for implementation and hence is of only academic interest)

3.9EXIM BANK
Export-Import Bank of India is the premier export finance institution of the
country, set up in 1982 under the Export-Import Bank of India Act 1981.
Government of India launched the institution with a mandate, not just to enhance
exports from India, but to integrate the countrys foreign trade and investment
with the overall economic growth. Since its inception, Exim Bank of India has
been both a catalyst and a key player in the promotion of cross border trade and
investment. Commencing operations as a purveyor of export credit, like other
Export Credit Agencies in the world, Exim Bank of India has, over the period,
evolved into an institution that plays a major role in partnering Indian industries,
particularly the Small and Medium Enterprises, in their globalisation efforts,
through a wide range of products and services offered at all stages of the
business cycle, starting from import of technology and export product
development to export production, export marketing, pre-shipment and postshipment and overseas investment.

EXIM FINANCE KEY BENEFITS:

Efficient service to our importer/exporter clients.
Connectivity with the Customs Department to facilitate payment of custom duty
and receipt of duty draw back by the importer/exporter clients through the
electronic media. Under this system of Electronic Data Interchange (EDI),
Custom Authorities process the shipping bills and also effect on line payment of
duty drawback for exporters.
Further, they undertake processing of Bill of Entry and deposit of custom duty for
imports.

EXCHANGE EARNERS FOREIGN CURRENCY (EEFC) DEPOSITS SCHEME:

The Exchange Earners Foreign Currency (EEFC) Deposits Scheme was started
by RBI in the year 1992 with the introduction of Liberalized Exchange Rate
Management

System.

Under this scheme, the recipient of inward remittances, exporters and other
eligible bodies are allowed to keep a portion of their inward remittances / export
proceeds in foreign currency with the banks in India which can later be utilizedfor
permissible purposes.
SERVICES OFFERED TO EXPORTERS:
Pre-shipment finance in foreign currency and Indian rupees.Post-shipment
finance in foreign currency and Indian rupees. Handling export bills on collection
basis.Outward remittances for purposes as permitted under Exchange Control
guidelines. Inward remittances including advance payments. Quoting of
competitive rates for transactions. Maintenance of Exchange Earners Foreign
Currency

(EEFC)

accounts.

Assistance in obtaining credit reports on overseas parties Forfeiting for medium

term export receivables.

SERVICES OFFERED TO IMPORTERS:

Establishment of Import Letters of Credit covering import into India and handling
of bills under Letter of Credit. Handling of import bills on collection basis.
Remittance of advance payment against imports. Offering utilization of PCFC
( pre-shipment credit in foreign currency) for imports.

3.10 PROJECT FINANCE

MEANING:
Project finance is the financing of long-term infrastructure and industrial projects
based upon a complex financial structure where project debt and equity are used
to finance the project. Usually, a project financing scheme involves a number of
equity investors, known as sponsors, as well as a syndicate of banks which
provide loans to the operation. The loans are most commonly non-recourse
loans, which are secured by the project itself and paid entirely from its cash flow,
rather than from the general assets or creditworthiness of the project sponsors, a
decision in part supported by financial modeling. The financing is typically
secured by all of the project assets, including the revenue-producing contracts.
Project lenders are given a lien on all of these assets, and are able to assume
control of a project if the project company has difficulties complying with the loan
terms.

SELECTION OF A PROJECT BY BANK:

The proposals for project finance would be considered by the bank on a

selective basis in view of the larger outlay of funds an longer duration of credit
which may have an adverse impact on bank's Asset-Liability Management
system and strain on its liquidity. Usually such projects would be operationalised
through consortium arrangement along with the Term Lending Financial
Institutions and other public/ private sector Banks. The project would be
appraised by the Lead Bank of the consortium and all other banks would accept
the appraisal made by the lead bank. Before extending finance for Projects, the
economic feasibility and financial viability of the project in relation to the macro
economic conditions prevailing at the time of conceptualization of the project and

also the likely scenario that may prevail during the normal life span of the project
should be established.
The project should be able to withstand reasonable levels of variation in crucial
parameters which should be established by sensitivity analysis of the cash flows.

The means of finance for the project along with provisions to meet contingencies
such as cost/ time overrun should be established. The entire source of funds for
the project from sources other than that by the promoters shall be fully tied-up
before sanction/ disbursement of the limits.

Wherever the project is one of unusually longer duration such as infrastructure

development, the involvement of agencies such as Financial Institutions and
ways of reducing the blockage of bank's fund that are sourced mainly out of short
term

lending

institutions,

take-out

financing,

securitization,

Inter-Bank

participation Certificates, etc. would be resorted to.

The disbursements under project Finance would be made strictly in tune with the
sanction terms, only after ensuring the end use of funds already disbursed by the
consortium, meeting the required margin at each stage of project implementation
and certification by the competent consultants/ specialists as per the procedure
in vogue from time to time and as decided by the consortium.

RATE OF INTEREST:

The rate of interest on such credit facilities would be determined based on the
borrower gradation and the interest rate policy of the bank from time to time.

SECURITY:
The credit facilities shall be secured by tangible assets and collaterals as may
be required based on the nature of project, quantum and duration of the credit,
anticipated return on investment and risk perception.

STATE BANK OF INDIA

CORPORATE BANKING OF STATE BANK OF INDIA
INTRODUCTION:
State Bank of India (SBI) is the largest bank in India. It is also, measured by the
number of branch offices and employees, the largest bank in the world.
Established in 1806 as Bank of Bengal, it remains the oldest commercial bank in
the Indian Subcontinent. It provides a range of banking products through its vast
network in India and overseas, including products aimed at NRIs. With an asset
base of $126 billion and its reach, it is a regional banking behemoth. The
Government of India nationalized SBI in 1955 with the Reserve Bank of India
having a 60% stake. SBI has laid emphasis on reducing the huge manpower
through Golden handshake schemes and computerizing its operations.

BOARD OF DIRECTORS
List of Directors on the Central Board of State Bank of India (As
on 4th August 2011)

Sr.

Name

Designation

No.

Under Section of
SBI Act 1955

Shri Pratip Chaudhuri

Chairman

19 (a)

Shri Hemant G. Contractor Managing Director

19 (b)

Shri Diwakar Gupta

Managing Director

19 (b)

Shri A. Krishna Kumar

Managing Director

19 (b)

Shri Dileep C. Choksi

Director

19 (c)

Shri S. Venkatachalam

Director

19 (c)

Shri D. Sundaram

Director

19 (c)

Shri Parthasarathy Iyengar Director

19 (c)

Shri G. D. Nadaf

Officer Employee Director 19 (cb)

10

Dr. Rajiv Kumar

Director

19 (d)

TRANSFORMATION JOURNEY IN STATE BANK OF INDIA

The State Bank of India, the countrys oldest Bank and a premier in terms of
balance sheet size, number of branches, market capitalization and profits is
today going through a momentous phase of Change and Transformation the
two hundred year old Public sector behemoth is today stirring out of its Public
Sector legacy and moving with an ability to give the Private and Foreign Banks a
run for their money.

The bank is entering into many new businesses with strategic tie ups Pension
Funds, General Insurance, Custodial Services, Private Equity, Mobile Banking,
Point of Sale Merchant Acquisition, Advisory Services, structured products etc
each one of these initiatives having a huge potential for growth.

The Bank is forging ahead with cutting edge technology and innovative new
banking models, to expand its Rural Banking base, looking at the vast untapped
potential in the hinterland and proposes to cover 100,000 villages in the next two
years.

It is also focusing at the top end of the market, on whole sale banking capabilities
to provide Indias growing mid / large Corporate with a complete array of
products and services. It is consolidating its global treasury operations and
entering into structured products and derivative instruments. Today, the Bank is
the largest provider of infrastructure debt and the largest arranger of external
commercial borrowings in the country. It is the only Indian bank to feature in the
Fortune 500 list.
The Bank is changing outdated front and back end processes to modern
customer friendly processes to help improve the total customer experience. With
about 8500 of its own 10000 branches and another 5100 branches of its
Associate Banks already networked, today it offers the largest banking network
to the Indian customer. The Bank is also in the process of providing complete
payment solution to its clientele with its over 21000 ATMs, and other electronic
channels such as Internet banking, debit cards, mobile banking, etc.
With four national level Apex Training Colleges and 54 learning Centers spread
all over the country the Bank is continuously engaged in skill enhancement of its
employees. Some of the training programs are attended by bankers from banks
in other countries.
The bank is also looking at opportunities to grow in size in India as well as
internationally. It presently has 82 foreign offices in 32 countries across the globe.
It has also 7 Subsidiaries in India SBI Capital Markets, SBICAP Securities, SBI
DFHI, SBI Factors, SBI Life and SBI Cards - forming a formidable group in the

Indian Banking scenario. It is in the process of raising capital for its growth and
also consolidating its various holdings.
Throughout all this change, the Bank is also attempting to change old mindsets,
attitudes and take all employees together on this exciting road to Transformation.
In a recently concluded mass internal communication programme termed
Parivartan the Bank rolled out over 3300 two day workshops across the country
and covered over 130,000 employees in a period of 100 days using about 400
Trainers, to drive home the message of Change and inclusiveness. The
workshops fired the imagination of the employees with some other banks
in India as well as other Public Sector Organizations seeking to emulate the
programme.

EVOLUTION OF SBI

The origin of the State Bank of India goes back to the first decade of the
nineteenth century with the establishment of the Bank of Calcutta in Calcutta on
2 June 1806. Three years later the bank received its charter and was redesigned as the Bank of Bengal (2 January 1809). A unique institution, it was the
first joint-stock bank of British India sponsored by the Government of Bengal. The
Bank of Bombay (15 April 1840) and the Bank of Madras (1 July 1843) followed
the Bank of Bengal. These three banks remained at the apex of modern banking
in India till their amalgamation as the Imperial Bank of India on 27 January 1921.
Primarily Anglo-Indian creations, the three presidency banks came into existence
either as a result of the compulsions of imperial finance or by the felt needs of
local European commerce and were not imposed from outside in an arbitrary
manner to modernise India's economy. Their evolution was, however, shaped by
ideas culled from similar developments in Europe and England, and was
influenced by changes occurring in the structure of both the local trading

environment and those in the relations of the Indian economy to the economy of
Europe and the global economic framework.

CORPORATE BANKING
SBI is a one shop providing financial products / services of a wide range for
large, medium and small customers both domestic and international.

The SBIs powerful corporate banking formation deploys multiple channels to

deliver integrated solutions for all financial challenges faced by the corporate
universe. The Corporate Banking Group and the National Banking Group are the
primary delivery channels for corporate banking products.
The Corporate Banking Group consists of dedicated Strategic Business Units
that cater exclusively to specific client groups or specialize in particular product
clusters. Foremost among these specialized groups are the Corporate Accounts
Group (CAG), focusing on the prime corporate and institutional clients of the
countrys biggest business centers. The others are the Project Finance unit and
the Leasing unit.
The National Banking Group also delivers the entire spectrum of corporate
banking products to other corporate clients, on a nationwide platform.

CORPORATE ACCOUNTS GROUP (CAG)

CAG - A perfect strategic fit
Market leader image
Focussed attention
Flexible & Customer - friendly credit policies
Structured Products - Fund based & fee based
Timely, comprehensive and assured delivery
Competitive pricing
Highly skilled credit expertise

CAG - SBI's Proactive response to emerging market needs

CAG is Strategic Business Unit of SBI, set up exclusively to cater to the

specialised banking needs of top corporate clients of the country. It was the direct
outcome of SBI's structural reorganization in the light of Deregulation,
Globalization & Liberalization of the Banking Industry. Created in the year 1995,
CAG's'' mission is to:
Focus on top corporate clients
Establish itself as the most professional outfit of its kind in the country
Render world class and cost effective financial services

 Evolve new products on a sustained basis-customized to the changing needs

of the corporate
Stay ahead of competitors
CAG - A Symbol of excellence
Quality Relationship Banking Exclusive, highly skilled Relationship teams of
dynamic and motivated personnel, each attending to a select group of top
Corporate providing a one-stop-shop for financial services presently at Mumbai,
New Delhi, Calcutta, Chennai and Ahmedabad.
Delivered Credit process
Only two stage credit process consisting of appraisal and assessment by the
Relationship team and sanction by the Credit Committee/Central Board, leading
to quickest response time in the industry.
Offer of wider and sophisticated products Apart from a variety of core credit
products including structured finance and multi-purpose short term corporate
loan, CAG offers an array of customer specific products like Cash Management
Product, Treasury & Forex products and Merchant Banking products in
association with SBI Capital Markets Ltd., SBI Gilts Ltd. and other subsidiaries of
SBI.
CAG - One point contact Account Management Teams will aid you in securing
any product from any of our various associates and subsidiaries as listed below
For leasing requirements through our Leasing SBU
Large Scale Project Finance through PF SBU
Capital Market Requirements through SBICAPS
CORE CREDIT PRODUCTS

PurposeType
Rupee

of Loan

Pricing

Working CapitalCash Credit facility

Based on credit risk rating of

Loans

the Company designed on the

lines

of

internationally

accepted models, ranging from

our Prime Lending Rate(PLR)
upwards.
Project
Capex loans

&Medium Term Loans 5-7Same as above - Medium Term

years

or

longer

inLending Rate (MTLR)upwards.

exceptional cases
Export Credits Packing

Credit, RBI Defined LIBOR linked and

Postshipment

,Market Determined

Forfaiting
Foreign

Projects

&External

CommercialLIBOR linked

Currency Work. Cap

Borrowings(ECBs)

Loans

which

include

Syndicated

loans,

Stand-alone
loans,Buyers'Credit and
Seller's Credit, Bilateral
loans

in

currencies.

all

major

Purpose
Short

Term

CorporateFor

Loans

Pricing

Shoring

Capital,

up

Net

Ongoing

WorkingBased on the Credit

capitalrisk

rating

expenditure, Repayment of high Linked to our PLR

cost

debt,

R&D

expenditure,

implementation of VRS

Securitised

loans-

inUpfronting of assured cash flowBased on risk rating

association with SBICAP

emanating from future receivables

viz.

rentals,

Royalties,

debtors,

Lease rentals etc.

Channel

Financing-

inFinancing of downstream marketingBased on the Credit

association with other SBIchannels

risk rating - Linked to

branches

our PLR

Fee Based Products - likeFor

Letter

of

import

Credits(LCs),capital

Guarantees,

Guarantees(DPGs)

and

PRODUCTS AND SERVICES

goods

includingLarge value business

participation

bids,

guarantees etc.

Letter of Comfort

SBI OFFERS:-

goods

Defferredinternational

Payment

of

in- negotiable.

performance

Working capital financing

Assistance extended both as Fund based and Non-Fund based facilities to
Corporates , Partnership firms , Proprietary concerns
Working Capital finance extended to all segments of industries and services
sector such as IT

Term Loans
To support capital expenditures for setting up new ventures as also for
expansion, renovation etc.
Lease Finance
An exclusive unit providing one s shopping to Corporates
A dedicated set up specialised in financing of infrastructure and other large
projects
Exclusive set up for handling large ticket leases.
SBI's Prime Lending Rates (PLR) are among the lowest
Presently Bank has two PLR's
SBAR for loans payable on demand and upto one year
SBMTLR for loans payable beyond one year
Robo Silicon Private Limited
Corporate Overview
Robo Silicon Private Limited commenced operations in the year 2001 and is
headquartered in Hyderabad, Andhra Pradesh, India.

Robo Silicon, for the first time in India, introduced manufactured sand. It not
only is the perfect substitute to the precious and fast depleting natural resource river sand, but is also a viable, cost-effective and eco-friendly product. In a very
short span, RoboSand has earned the respect and patronage of leading Industry,
real estate and construction giants in the country. Having weathered initial
resistance a fate common to every innovative idea in a change-resisting
environment, RoboSand has quickly found acceptance and is today preferred
by all quality-conscious construction industry leaders. The pillars of faith stand
firmly on RoboSand because it protects the environment, promotes ethical and
legal construction activities and also eliminates the many disadvantages of using
river sand for purposes of construction. Additionally, using RoboSand in
concrete and masonry results in the substantial saving of cement, thus slashing
construction costs considerably.
Robo Silicon began operations in 2001 by setting up a crushing plant and quarry
in Hyderabad to supply manufactured sand to the construction industry. Robo
was the first in the country to introduce the concept of manufactured sand.
Extensive marketing efforts coupled with the consistent supply made Robosand
a generic name for manufactured sand in the construction industry. At the time of
acquisition,

Robo

Silicon

had

quarries.

With IVFA, Robo has been rapidly expanding across India to locations such as
Vizag, Delhi, Bengaluru, Jamnagar, Pune, Mangalore and Davanagere and is
currently the largest organized player in the stone aggregates industry in India.
Robo Silicon has successfully attracted high quality talent and built a deep
management team. It is in the process of injecting state-of-the-art mining
technologies & processes, which will meet global standards for safety and
environment protection.
Robo Silicon now has a range of construction materials that are collectively
referred to asRoboAggregates - fine and coarse aggregates that confirm to IS
383 specifications. Aggregates are a component of composite materials such as

concrete and asphalt concrete. It is a proven fact that fine and coarse aggregates
play a key role when combined with cement in concrete and asphalt (bitumen) for
road works. Aggregates are also used as base material under foundations,
roads, and railroads. To put it differently, aggregates are used as a stable
foundation or road/rail base with predictable, uniform properties (e.g. to help
prevent differential settling under the road or building), or as a vital extender that
binds with more expensive cement.
Identifying a need for Brick and Plaster work, Robo Silicon is proud to
introduce RoboPlast-

blend

of

specific

fine

aggregates

in

0-

2mm. RoboPlast provides complete masonry solutions at site and improves

workability. It is a ready-to-use product that eliminates the sieving process at site
thereby saving you precious time.

Investor Profile
India Value Fund
India Value Fund ('IVF') is a premier private equity investment fund. It has in
excess of US $ 1 Billion (Rupees 40 billion) under management committed by
high quality Indian and international institutional investors and family offices. IVF
makes available financial and intellectual capital to growing middle-market
companies in India.
IVF has invested in promising companies, partnered progress, and has seen
successful exits. In each prudently selected investment, IVF developed resilient
partnerships with management teams based on mutual respect, integrity, and
transparency. This, along with an ability to deliver appropriate support in building
businesses has created great value for all stakeholders.
IVF investments include a diverse range of industries such as healthcare,
retailing, outsourced services, media & entertainment and precision engineering.

Manufactured Sand - A Perspective

Evolution of Fine Aggregate Industry in India
The attempts to produce crushed or manufactured sand in India could be traced
to early 50's primarily in major dam works. The focus was on using different size
reduction techniques with available resources like rod mills, roller -crushers, and
cone crushers.
The absence of research in the reputed Civil Engineering Institutions about
manufactured sand aided a lot of unscrupulous quarry operators to perpetuate
the myth that quarry dust can be used in production of concrete either by
complete or partial replacement of river sand.
Early sources of fine & coarse aggregates (20mm and 10mm):
The river sand, pebbles and gravel sourced from river beds were used as fine
and coarse aggregates.
The insufficient quantities and inconsistent quality forced the construction
industry to explore the possibility of sizing down the locally available rock
formations using the crushers to produce coarse aggregates of 20mm and
10mm.
The type of machinery used was single stage crushers and later upgraded to
two stage crushers.
The waste product generated in the process is quarry dust which was being
given free in the early days is being offered today as a replacement for river
sand.
Emergence of Manufactured Sand
The progress in the building material research and identification of role of particle
shape and gradation of fine aggregates triggered the use of manufactured sand

in the production of concrete. The complexity of construction and use of high

strength concrete in large number of buildings is the prime mover along with the
scarcity of river sand in many cities.
Technical Perspective
The use of manufactured sand as a replacement for river sand is increasing with
the ban on sand mining implemented by different states. The other factors are
the general decline in the availability of river sand and pressure from active
environmental groups to protect the nature.
Urban growth:
The phenomenal rise in the construction activity in the last decade has
contributed to the wide gap between the supply and demand of river sand. A lot
of damage has been caused to the eco-systems by carrying out dredging
operations on the sand beds leading to the depletion of ground water levels in
the country.
Role of fine aggregates in concrete:
It is accepted fact that sand plays a very important role in the production of
concrete. The features of workability, strength and durability are directly
dependent on the properties of the sand used in the making of concrete.
According to industry reports
there is a major shift in the mindset of the Construction Industry towards
exploring substitutes for river sand. Across the World there is growing support for
the increased use of manufactured sand used in the production of concrete. The
properties of particle shape, consistent gradation and zero impurities are the
reason for the preference by structural consultants and concrete technologists.
The imperative need for clean sand, eliminating the constraints of river sand like

availability, price fluctuation etc, have made manufactured sand the perfect
substitute for river sand.
Manufacturing process and its standards:
The sand is manufactured in a three stage crushing process. The raw material is
either granite or basalt rock. The VSI which is also referred as sand making
machine is in the Tertiary Stage. The process adopted is similar to the river sand
generation by nature. The VSI applies the principle of rock on rock collision at a
high velocity shaping the sand particles.
The plant works on the principle of continuous feed in closed circuit and adopts
the technique synonymous and comparable to nature's production of river sand.
The complete manufacturing process takes minutes when compared to the
nature which happens over millions of years.
The product is produced to IS 383 standards.
Process
Our quarrying process typically begins with drilling and blasting the rock into
smaller pieces. Bore holes are drilled in the blast site and filled with explosives.
The blast breaks up the rock into smaller pieces that are loaded and hauled to
the plant.
The plant consists of three circuits namely Primary circuit, Secondary circuit and
Tertiary circuit wherein a three-stage crushing takes place. A 500 mm down size
granite rock that is brought from the quarry via operations which involve (deleted
involves) drilling, blasting, segregation, secondary breaking and transportation
to the plant, is fed into to the Primary Circuit consisting of one Jaw Crusher that
sizes down this granite rock to produce 150mm down size aggregate. This 150
mm down size rock is fed into the Secondary Circuit consisting of one Cone
Crusher to produce a 40 mm down size aggregate which in turn is fed into the
Tertiary Circuit consisting one Vertical Shaft Impactor that produces Sand and

Aggregate

of

the

required

Gradation

&

Shape.

The installed capacity of the plant is 200 TPH (Tons/Hr.) of RoboSand and Robo
shaped Aggregate of 20 mm & 10 mm size.

Plant & Machinery

The river sand, pebbles and gravel sourced from river beds were used as fine
and coarse aggregates.
The plant works on the principle of continuous feed in closed circuit
River sand is produced by flowing of stones in big floods from mountains to
streams to big rivers by the collusion of rock-on-rock thereby forming a
mechanism of impact-clearage-attrition-abrasion by which huge deposits are
created
The Vertical Shaft Impactor applies a similar principle of rock-on-rock collusion
for crushing
The Barmac Rock-on-Rock Impactor uses a feild proven rock lined rotor that
acts as velocity stone hurling a continuous rock stream into a tightly packed rock
lined crushing chamber

The rotor continuously discharges energized stone particles into a highly

turbulent particle cloud contained within the crushing chamber where reduction
occurs primarily by Rock-on-Rock impact, attrition and abrasion
Quality Testing

The Sieve Analysis tests are conducted on RoboSand 20mm and 10mm
everyday on samples collected from conveyor belts, stock piles and loaded
trucks
The following equipment is required and is available at all our plants

Sieves of different sizes

Sieve Shaker

Oven

Sampling Cones

All our sales officers are alos trained to carry out these tests at customer
locations
The Vertical Shaft Impactor applies a similar principle of rock-on-rock collusion or
crushing
The sand is classified into four zones as per IS 383 norms

QUESTIONAIRE FOR THE BANKS (FEDERAL BANK)

INTERVIEWER: MR- ABC
1.What are the different products and services offered under corporate
buying by your banks?

Ans:
FUND BASED

NON FUND BASED

1.TERM LOAN

1. LETTER OF CREDIT

2.WORKNG CAPITAL

2. BANK GUARANTEE

2.What is the fees/nterest charged by the bank for the services offered by
the bank?
Ans:
FEES

INTEREST

1.PROCESSNG FEES

1.CUSTOMER RATING

2.LEGAL FEES
3.ADMINISTRATIVE FEES

3.List the customers that the bank caters to?

Ans:
1.TATA GROUP
2.BOMBAY STOCK EXCHANGE

3.CIAL COCHIN NTERNATIONAL AIRPORT LIMITED

4.Who is the biggest client of the bank?

Ans:AIR INDIA AND RELIANCE.

5.How many employers are working in this department?

Ans:
NUMBER

OF TOTAL

NUMBER

OF TOTAL

NUMBER

EMPLOYEES

MALES

FEMALES

60

45

15

OF

6.What is the academic background of the staff from the corporate banking
department?
Ans:
DESIGNATION OF THE EMPLOYEES

ACADEMIC BACKGROUND

MIDDLE LEVEL MANAGERSS

B.TECH+MBA OR CA OR ICWA

Changes in the rate of interest / fiscal policy monetary policy.

Competition from other bank.
Asset liability mismatch.

7.Who is the corporate banking department head?

Ans:DGM(DEPUTY GENERAL MANAGER) BRANCH HEAD.
8. What is the heirecy of the corporate banking department?
Ans:

EXECUTIVE DIRECTOR (VERTICAL HEAD i.e MCG)

GENERAL MANAGER( REGIONAL HEAD)

DEPUTY GENERAL MANAGER HEAD (BRANCH MANAGER)

ASSISTANT GENERAL MANAGER

ASSISTANT

MANAGER

DEPUTY

GENERAL

MANAGER

HEAD

(BRANCH MANAGER)

9.Since when is the bank providing these corporate banking

services?

Ans: For the last 32years

10.what are the problems faced by the bank?

Ans: Nonperforming assets

QUESTIONAIRE FOR BANKS (SBI)

1.What are the different products and services offered under corporate
buying by your banks?
Ans
FUND BASED

NON FUND BASED

1.TERM LOAN

1.LETTER OF CREDIT

2.CORPORATE LOAN

2.BANK GUARNTEE

3.CASH CREDIT

3.TREASURY PRODUCTS

4.WORKING

CAPITAL

DEMAND 4.CASH MANAGEMENT SYSTEMS

LOANS
5.BILL FINANCE

5.TAXATION PAYMENTS/ FRANKNG

OF STAMPS

2. What is the fee/ interest charged by the bank for the services offered by
the bank?
Ans:
CORPORATE BANKING SERVICES FEE

RATES

AND

INTEREST

OFFERED

CHARGED

1.ADVANCES (LONG TERM)

BPLR p.a

2.ADVANCES (SHORT TERM)

STL RATES APPLICABLE TIME TO

TIME

L/C

COMMISION IN THE RANGE OF

1%p.a
BG

COMMISION IN THE RANGE OF

1%p.a

3.List the customers that bank caters?

Ans:
RELIANCE INDUSTRIES

VVF NDUSTRIES LTD

AIR NDIA

JBF NDUSTRIES LMITED

JET ARLNES LIMITED

31 INFOTECH LIMITED

BOMBAY DYEING
TATA TELECOM
RELIANCE COMMUNICATION

TOTAL 140 CLIENTS

4.Who is the biggest client of the bank?

Ans: AIR INDIA AND RELIANCE.

5.How many employers are working in this department?

Ans:
NUMBER

OF TOTAL

NUMBER

OF TOTAL

NUMBER

EMPLOYEES

MALES

FEMALES

60

45

15

OF

6.What is the academic background of the staff from the corporate banking
department?
Ans:
DESIGNATION OF THE EMPLOYEES

ACADEMIC BACKGROUND

MIDDLE LEVEL MANAGERSS

B.TECH+MBA OR CA OR ICWA

7.Who is the corporate banking department head?

Ans:DGM(DEPUTY GENERAL MANAGER) BRANCH HEAD.
8.What is the heirecy of the corporate banking department?
Ans:
EXECUTIVE DIRECTOR (GROUP HEAD)
EXECUTIVE DIRECTOR (VERTICAL HEAD i.e MCG)
GENERAL MANAGER( REGIONAL HEAD)

DEPUTY GENERAL MANAGER HEAD (BRANCH MANAGER)

ASSISTANT GENERAL MANAGER
MANAGER
ASSISTANT MANAGER
9.Since when is the bank providing these corporate banking services?
Ans:For the last 32years

10.what are the problems faced by the bank?

Ans: Non performing assets
Changes in the rate of interest / fiscal policy monetary policy.
Competition from other bank.
Asset liability mismatch.

QUESTIONAIRE FOR THE CORPORATES (ROBO SILICION)

1.List the bank from when the company avails corporate banking services?
Ans:
NAME OF THE BANKS

SERVICES AVAILED

SBI

LOANS

ICICI

BRIDGE FINANCE

INDIAN OVERSEAS BANK

ISSUE OF DEBT FUNDS

CITI BANK

FOREX TRANSACTIONS

2. What are the fees/interest charged by the bank for the services provided
by them?

Ans:
CORPORATE BANKING SERVICES

FEES INTEREST CHARGED

FUND BASED
1.RUPEE

PLR-100bps.

2.FOREIGN CURRENCY
3.EXPORT

RBI NORMS NEGOTIATED ON CASE

TO CASE BANS IS

4.OTHER

55%CONCESSION

TO

NORMAL

SERVICES CHARGES
5.LETTER

OF

CREDIT/BANK

GUARANTEE

3.What are the measure taken to control the bank charge/commission

borne by the company?
Ans: Minimum usage of LC route large volume of transation timely retirement of
obligations.

4.What are the negotiations tactics used by the company to obtain

maximum utilisation of bank facilities?.
Ans: We offer volume business which works as a sweeter to the banks.
5. List the benefits given by the banks?

Ans:
FUND BENEFITS

NON-FUNDED BENEFITS
LC AND BG AT 55% CONCESSION

6. Which bank do you wish to deal with?

Ans: 1.Nationalised banks :2. Private sector banks:Reason if so =
7. Which department decides on the bank with which the dealings have to
be done?
Ans: Finance department in consultation with the board of directors
8. How frequently do you visit your concered relationship manager?
Ans ;Almost every day or on the time of the calls.
9.What are the problems faced with respect to the services provided by the
bank?
Ans: Lack of transparency and rigidity in the services
10. Suggestions/Recommendations for the bank?
Ans: No suggestions.

INTERPRETATION OF DATA AND ANALYSIS

Corporate banking dealings are very customised taking to consideration the

customers

volume

of

business

requirements.Each

corporates

is

given

concessions keeping in mind the healthy relationship that they maintain and the
period since when they deal are dealing with the bank.
As far as the corporate are concerned they preffer dealings with a consortium of
banks taking advantages the benefits provided by all the banks. The corporates
convince the banks by provide a huge volume of the business for the concession
given by them.
While getting the questionaire filled it was noticed that the banks were very
skeptical about revelaing the details regarding the fees or the interest charged by
them to the corporate.
Overall the corporate banking charges are applied on a case an case basic
keeping into consideration the RBI regulations.

RECOMMENDATIONS & SUGGESTIONS

If we look at it from the corporate angle then the banks need to speed up their
procedures and thus enabling fast functioning of the work.It is seen that the
corporates feel that the private banks are rigid in their system and dont make
concessions consedering the urgency of the situation.
According to the banks they need the companies to have credit worthinessand
clean chit on stheir financial records. Hence it is suggested that the company
maintain their financial performance according to the rules and regulations. The
corporates also need to pay off their obligations on time which would help them
to create a good impression on the banks and make it easy for them for future
borrowings.

CONCLUSION

Corporate banking focuses on offering a full range of services to multinationals,

large domestic corporate and institutional clients.
Corporate banking reflects banks strength in providing an corporates clients in
India, a wide away of commercial, transactional and electronic banking product
developments and a well- interegated approach to realtionship management.
Corporate banking services are an integral part of the corporate, investment
banking and markets (CIBM) structure,which focuses on offering a full range of
services to multinational, large domestic corporate and institutional clients. It can
be concluded that the banks help corporate in financial needs thus enabling them
to run smoothly & effectively