A Project Study Report On Training Undertaken at

Titled

Comparative Analysis of SBI & HDFC Bank Regarding Personal Loan

S!"mitted in partial f!lfillment for t#e A$ard of degree Of Master of Business Administration 2008-2010

Institute of Management
Su$mitted $y%

!ec"no#ogy
Su$mitted !o%

Ranjeet Singh

Mrs Manishi Sharma

A&'(O)*+,-+M+(!

The path to success is never so smooth and simple to achieve. However, our learnings and motivation by our close ones and our mentors helps us to reach beyond our potential. My Project would remain partial without acknowledging people who encouraged me to achieve a milestone. I e press my sincere gratitude to Mr. SHELENDAR SINGH !or giving me an opportunity to discover more knowledge through practical learning by organi"ing immensely knowledgeable Project !or the students o! M#$ %nd year. I privileged to pay my sincere gratitude towards Mr. DEEPAK VIJAYVARGYIA !or providing their valuable guidance and encouragement throughout the Project !or keeping my morale up and making it possible to complete and submit this report in time. I am e&ually grate!ul to all my other teachers !or their complete support. It would be un!air on my part i! I do not thank my colleges !or their continuous help without which this work could never have been accomplished. They made me reali"e the importance o! teamwork and also the leadership skills. I am grate!ul to all o! them standing with me and supporting me in this project.

PREFACE

This project report has been prepared as per the re&uirement o! the syllabus o! M#$ course structure under which the students are the re&uired to undertake project. It was a !irst hand e perience !or us as that we were e posed to the pro!essional set'up and were !acing the market, which was really a great e perience. (uring project period, I had very touching e periences. )hen business is involved, e periences counts a lot, as we know, e perience are an instrument, which leads towards success. *ow I take this opportunity to present the project report and sincerely hope that it will be as much knowledge enhancing to the readers as it was to use during the !ieldwork and the compilation o! the report.

EXECUTIVE SUMMARY Their should be comparison between two biggest bank o! India namely +tate #ank o! India ,+#I- and Housing (evelopment .inancial /orporation ,H(./- on Personal loan provided by them. Today Personal loan is necessity !or !ul!ill the re&uirement o! !amily and provide good li!e. 0veryone wants a li!e in which all !acilities are present which are so costly so they move towards to various banks both public as well as private bank !or loan. +#I banks is basically pre!er by most o! the people who are in government jobs1public sectors because o! 2' 3. %. 5. Ta rebate 4ack o! much !unds Interest rate

H(./ #ank also choice o! people because o!2' 3. %. 5. 0asiness and 4ow documentation +ervices /ooperative and 6elationship

In this project study peoples are satis!ied by both the banks but also wants more things like 7pdating o! services, technological enhancement and ethics. I! all the banks !ocus on these things they get better growth in Personal loan as well as better response o! people as today Personal loan is re&uired !or !ul!ill the re&uirement o! li!e.

TABLE OF CONTENT

Contents ! 3. %. 5. 8. :. ;. <. =. >. 3?. Introduction to the Industry History o! #anking in India Introduction to the organi"ation 6esearch Methodology Title o! the +tudy (uration o! the Project 9bjective o! the study Type o! the 6esearch +ample +i"e and Method o! selecting +amples +cope o! the +tudy 4imitation o! the +tudy .acts and .indings $nalysis and Interpretation +)9T /onclusion $ppendi #ibliography

INTRODUCTION OF BANKING INDUSTRY B"n# $ $"n# is license by a government. Its primary activity is to lend money. Many other !inancial activities were allowed over time. .or e ample banks are important players in !inancial markets and o!!er !inancial services such as investment !unds In some countries such as @ermany, banks have historically owned major stakes in industrial corporations while in other countries such as the 7nited +tates banks are prohibited !rom owning non' !inancial companies. In Aapan, banks are usually the ne us o! a cross'share holding entity known as the "aibatsu. In .rance, banc assurance is prevalent, as most banks o!!er insurance services ,and now real estate services- to their clients. The level o! government regulation o! the banking industry varies widely, with counties such as Iceland, the 7nited Bingdom and the 7nited +tates having relatively light regulation o! the banking sector, and countries such as /hina having relatively heavier regulation ,including stricter regulations regarding the level o! reserves-. History #anks have in!luenced economies and politics !or centuries. Historically, the primary purpose o! a bank was to provide loans to trading companies. #anks provided !unds to allow businesses to purchase inventory, and collected those !unds back with interest when the goods were sold. .or centuries, the banking industry only dealt with businesses, not consumers. #anking services have e panded to include services directed at individuals, and risk in these much smaller transactions are pooled..

Or%&%n o' t(e )or*

Silver drachm coin from Trapezus, 4th century BC

The name bank derives !rom the Italian word banco Cdesk1benchC, used during the 6enaissance by .lorentine bankers, who used to make their transactions above a desk covered by a green tablecloth. However, there are traces o! banking activity even in ancient times.

ABOUT BANKING ! +ection :,b- o! the #anking 6egulation $ct, 3>8> de!ines banking as Dthe accepting, investment, o! deposits !or the purpose o! lending or

o! money !rom the public, repayable on demand or

otherwise, and withdrawal by che&ue, dra!t, order or otherwise.E +ection :,c- o! the #anking 6egulation $ct, 3>8> de!ines a banking company as Fany company which transacts the business o! banking in IndiaE.

De'%n%t%on o' B"n#%n& !

The de!inition o! a bank varies !rom country to country. 7nder En&+%s( ,o--on +"), a banker is de!ined as a person who carries on the business o! banking, which is speci!ied as2

/onducting current accounts !or his customers Paying che&ues drawn on him, and /ollecting che&ues !or his customers.

The borrowing, raising or taking up o! money, the lending or advancing o! money either with or without securityG $cting as agents !or any government or local authority or any other person or persons.

/ontracting !or public and private loans and negotiating and issuing the same. The e!!ecting, insuring, guaranteeing, underwriting, participating in managing and carrying out o! any issue, public or private, o! state, municipal or other loans or o! shares, stock, debentures or debenture stock o! any company, corporation or association and the lending o! money !or the purpose o! any such issue.

E."-/+es o' st"t0tor1 *e'%n%t%ons2

Cbanking businessC means the business o! receiving money on current or

deposit account, paying and collecting che&ues drawn by or paid in by customers, the making o! advances to customers, and includes such other business as the $uthority may prescribe !or the purposes o! this $ctG ,#anking $ct ,+ingapore-, +ection %, Interpretation-.

Cbanking businessC means the business o! either or both o! the !ollowing2 6eceiving !rom the general public money on current, deposit, savings or

1.

other similar account repayable on demand or within less than H5 monthsI ... or with a period o! call or notice o! less than that periodG 2. 3. Paying or collecting che&ues drawn by or paid in by customers +ince the advent o! 0.TP9+ ,0lectronic .unds Trans!er at Point 9!

+ale-, direct credit, direct debit and internet banking, the che&ue has lost its primacy in most banking systems as a payment instrument. This has led legal theorists to suggest that the che&ue based de!inition should be broadened to include !inancial institutions that conduct current accounts !or customers and enable customers to pay and be paid by third parties, even i! they do not pay and collect che&ues

Commercial role:-

The commercial role o! banks is not limited to banking, and includes2

issue o! banknotes ,promissory notes issued by a banker and payable to processing o! payments by way o! telegraphic trans!er, 0.TP9+, issuing bank dra!ts and bank che&ues accepting money on term deposit lending money by way o! overdra!t, installment loan or otherwise providing documentary and standby letters o! credit ,trade !inance-,

bearer on demand

internet banking or other means

guarantees, per!ormance bonds, securities underwriting commitments and other !orms o! o!!'balance sheet e posures

sa!ekeeping o! documents and other items in sa!e deposit bo es currency e change acting as a J!inancial supermarketJ !or the sale, distribution or brokerage,

with or without advice, o! insurance, unit trusts and similar !inancial products

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Economic functions:The economic !unctions o! banks include2 1. Issue o! money, in the !orm o! banknotes and current accounts subject

to che&ue or payment at the customerJs order. These claims on banks can act as money because they are negotiable and1or repayable on demand, and hence valued at par. They are e!!ectively trans!erable by mere delivery, in the case o! banknotes, or by drawing a che&ue that the payee may bank or cash. 2. *etting and settlement o! payments K banks act as both collection and paying agents !or customers, participating in interbank clearing and settlement systems to collect, present, be presented with, and pay payment instruments. This enables banks to economise on reserves held !or settlement o! payments, since inward and outward payments o!!set each other. It also enables the o!!setting o! payment !lows between geographical areas, reducing the cost o! settlement between them. 3. 4. /redit intermediation K banks borrow and lend back'to'back on their /redit &uality improvement K banks lend money to ordinary commercial own account as middle men and personal borrowers ,ordinary credit &uality-, but are high &uality borrowers. The improvement comes !rom diversi!ication o! the bankJs assets and capital which provides a bu!!er to absorb losses without de!aulting on its obligations. 5. Maturity trans!ormation K banks borrow more on demand debt and short term debt, but provide more long term loans. In other words, they borrow short and lend long. )ith a stronger credit &uality than most other borrowers, banks can do this by aggregating issues ,e.g. accepting deposits and issuing banknotes- and redemptions ,e.g. withdrawals -.

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La

of !an"in#:-

#anking law is based on a contractual analysis o! the relationship between the bank ,de!ined above- and the customerLde!ined as any entity !or which the bank agrees to conduct an account. The law implies rights and obligations into this relationship as !ollows2 3. The bank account balance is the !inancial position between

the bank and the customer2 when the account is in credit, the bank owes the balance to the customerG when the account is overdrawn, the customer owes the balance to the bank. %. overdra!t limit. 5. 8. The bank may not pay !rom the customerJs account without a The bank agrees to promptly collect the che&ues deposited mandate !rom the customer, e.g. a che&ue drawn by the customer. to the customerJs account as the customerJs agent, and to credit the proceeds to the customerJs account. :. 6. <. The bank has a right to combine the customerJs accounts, The bank has a lien on che&ues deposited to the customerJs The bank must not disclose details o! transactions through since each account is just an aspect o! the same credit relationship. account, to the e tent that the customer is indebted to the bank. the customerJs accountLunless the customer consents, there is a public duty to disclose, the bankJs interests re&uire it, or the law demands it. The bank agrees to pay the customerJs che&ues up to the amount standing to the credit o! the customerJs account, plus any agreed

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Entry re#ulation:/urrently in most jurisdictions commercial banks are regulated by government entities and re&uire a special bank licence to operate. 7sually the de!inition o! the business o! banking !or the purposes o! regulation is e tended to include acceptance o! deposits, even i! they are not repayable to the customerJs orderLalthough money lending, by itsel!, is generally not included in the de!inition. 7nlike most other regulated industries, the regulator is typically also a participant in the market, i.e. a government'owned ,central- bank. /entral banks also typically have a monopoly on the business o! issuing $"n#notes. However, in some countries this is not the case. In the 7B, !or e ample, the F%n"n,%"+ Ser2%,es A0t(or%t1 licenses banks, and some commercial banks ,such as the B"n# o' S,ot+"n*- issue their own $"n#notes in addition to those issued by the B"n# o' En&+"n*, the 7B governmentJs central bank. +ome types o! !inancial institution, such as $0%+*%n& so,%et%es and ,re*%t 0n%ons, may be partly or wholly e empt !rom bank licence re&uirements, and there!ore regulated under separate rules.

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The re&uirements !or the issue o! a bank licence vary between jurisdictions but typically include2 3. %. Minimum capital Minimum capital ratio

J.it and ProperJ re&uirements !or the bankJs controllers, owners, directors, and1or senior o!!icersThe re&uirements !or the issue o! a bank licence vary between jurisdictions but typically include2 5. 8. 5. J.it and ProperJ re&uirements !or the bankJs controllers, $pproval o! the bankJs #usiness plan as being su!!iciently prudent.

owners, directors, and1or senior o!!icers

The economic !unctions o! banks include2 6. Issue o! money, in the !orm o! $"n#notes and current accounts

subject to ,(e30e or payment at the customerJs order. These claims on banks can act as money because they are negotiable and1or repayable on demand, and hence valued at par. They are e!!ectively trans!erable by mere delivery, in the case o! $"n#notes, or by drawing a che&ue that the payee may bank or cash. 7. *etting and settlement o! payments K banks act as both collection and paying agents !or customers, participating in interbank clearing and settlement systems to collect, present, be presented with, and pay payment instruments. This enables banks to economise on reserves held !or settlement o! payments, since inward and outward payments o!!set each other. It also enables the o!!setting o! payment !lows between geographical areas, reducing the cost o! settlement between them. 8. 9. /redit intermediation K banks borrow and lend back'to'back on their /redit &uality improvement K banks lend money to ordinary own account as middle men commercial and personal borrowers ,ordinary credit &uality-, but are high &uality borrowers. The improvement comes !rom diversi!ication o! the bankJs

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assets and capital which provides a bu!!er to absorb losses without de!aulting on its obligations. However, banknotes and deposits are generally unsecuredG i! the bank gets into di!!iculty and pledges assets as security, to raise the !unding it needs to continue to operate, this puts the note holders and depositors in an economically subordinated position. 1 . M"t0r%t1 tr"ns'or-"t%on 2'#anks borrow more on demand debt and short term debt, but provide more long term loans. In other words, they borrow short and lend long. )ith a stronger credit &uality than most other borrowers, banks can do this by aggregating issues ,e.g. accepting deposits and issuing banknotes- and redemptions ,e.g. withdrawals and redemptions o! banknotes-, maintaining reserves o! cash, investing in marketable securities that can be readily converted to cash i! needed, and raising replacement !unding as needed !rom various sources ,e.g. wholesale cash markets and securities markets-. #anking law is based on a contractual analysis o! the relationship between the bank ,de!ined above- and the C0sto-er ! de!ined as any entity !or which the bank agrees to conduct an account. The law implies rights and obligations into this relationship as !ollows2 33.. The bank agrees to promptly collect the che&ues deposited to the

customerJs account as the customerJs agent, and to credit the proceeds to the customerJs account. 3% . The banks have a right to combine the customerJs accounts, since

each account is just an aspect o! the same credit relationship. 35. The bank has a lien on che&ues deposited to the customerJs account,

to the e tent that the customer is indebted to the bank. 38. The bank must not disclose details o! transactions through the

customerJs accountLunless the customer consents, there is a public duty to disclose, the bankJs interests re&uire it, or the law demands it.

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3: .

The banks must not close a customerJs account without reasonable

notice, since che&ues are outstanding in the ordinary course o! business !or several days. These implied contractual terms may be modi!ied by e press agreement between the customer and the bank. The statutes and regulations in !orce within a particular jurisdiction may also modi!y the above terms and1or create new rights, obligations or limitations relevant to the bank'customer relationship. /urrently in most jurisdictions commercial banks are regulated by government entities and re&uire a special bank licence to operate. 7sually the de!inition o! the business o! banking !or the purposes o! regulation is e tended to include acceptance o! deposits, even i! they are not repayable to the customerJs orderLalthough money lending, by itsel!, is generally not included in the de!inition. 7nlike most other regulated industries, the regulator is typically also a participant in the market, i.e. a government'owned ,central- bank. /entral banks also typically have a monopoly on the business o! issuing banknotes. However, in some countries this is not the case. In the 7B, !or e ample, the .inancial +ervices $uthority licences banks, and some commercial banks ,such as the #ank o! +cotland- issue their own banknotes in addition to those issued by the #ank o! 0ngland, the 7B governmentJs central bank. +ome types o! !inancial institution, such as building societies and credit unions, may be partly or wholly e empt !rom bank licence re&uirements, and there!ore regulated under separate rules.

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H%stor1 o' B"n#%n& %n In*%"

The !irst bank in India, though conservative, was established in 3<=;. .rom 3<=; till today, the journey o! Indian #anking +ystem can be segregated into three distinct phases. They are as mentioned below2' 0arly phase !rom 3<=; to 3>;> o! Indian #anks *ationali"ation o! Indian #anks and up to 3>>3 prior to Indian banking sector 6e!orms. *ew phase o! Indian #anking +ystem with the advent o! Indian .inancial M #anking Phase +ector 6e!orms a!ter 3>>3. as Phase , and Phase To make this write'up more e planatory, I pre!i the scenario .

P("se

The @eneral #ank o! India was set up in the year 3<=;. *e t came #ank o! Hindustan and #engal #ank. The 0ast India /ompany established #ank o! #engal ,3=?>-, #ank o! #ombay ,3=8?- and #ank o! Madras ,3=85- as independent units and called it Presidency #anks. These three banks were amalgamated in 3>%? and Imperial #ank o! India was established which started as private shareholders banks, mostly 0uropeans shareholders.

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In 3=;: $llahabad #ank was established and !irst time e clusively by Indians, Punjab *ational #ank 4td. was set up in 3=>8 with head&uarters at 4ahore. #etween 3>?; and 3>35, #ank o! India, /entral #ank o! India, #ank o! #aroda, /anara #ank, Indian #ank, and #ank o! Mysore were set up. 6eserve #ank o! India came in 3>5:.

(uring the !irst phase the growth was very slow and banks also e perienced periodic !ailures between 3>35 and 3>8=. There were appro imately 33?? banks, mostly small. To streamline the !unctioning and activities o! commercial banks, the @overnment o! India came up with The #anking /ompanies $ct, 3>8> which was later changed to #anking 6egulation $ct 3>8> as per amending $ct o! 3>;: ,$ct *o. %5 o! 3>;:-. 6eserve #ank o! India was vested with e tensive powers !or the supervision o! banking in India as the /entral #anking $uthority.

P("se @overnment took major steps in this Indian #anking +ector 6e!orm a!ter

independence. In 3>::, it nationali"ed Imperial #ank o! India with e tensive banking !acilities on a large scale especially in rural and semi'urban areas. It !ormed +tate #ank o! India to act as the principal agent o! 6#I and to handle banking transactions o! the 7nion and +tate @overnments all over the country. +even banks !orming subsidiary o! +tate #ank o! India was nationali"ed in 3>;? on 3>th Auly, 3>;>, major process o! nationali"ation was carried out. It was the e!!ort

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o! the then Prime Minister o! India, Mrs. Indira @andhi.38 major commercial banks in the country were nationali"ed. +econd phase o! nationali"ation Indian #anking +ector 6e!orm was carried out in 3>=? with seven more banks. This step brought =?N o! the banking segment in India under @overnment ownership.

The !ollowing are the steps taken by the @overnment o! India to 6egulate #anking Institutions in the /ountry2'

3>8>2 0nactment o! #anking 6egulation $ct. 3>::2 *ationali"ation o! +tate #ank o! India. 3>:>2 *ationali"ation o! +#I subsidiaries. 3>;32 Insurance cover e tended to deposits. 3>;>2 *ationali"ation o! 38 major banks. 3><32 /reation o! credit guarantee corporation. 3><:2 /reation o! regional rural banks. 3>=?2 *ationali"ation o! seven banks with deposits over %?? crore.

$!ter the nationali"ation o! banks, the branches o! the public sector bank India raised to appro imately =??N in deposits and advances took a huge jump by 33,???N.

#anking in the sunshine o! @overnment ownership gave the public implicit !aith and immense con!idence about the sustainability o! these institutions.

P("se This phase has introduced many more products and !acilities in the banking sector in its re!orms measure. In 3>>3, under the chairmanship o! M

*arasimham, a committee was set up by his name which worked !or the liberali"ation o! banking practices. The country is !looded with !oreign banks and their $TM stations. 0!!orts are being put to give a satis!actory service to customers. Phone banking and net banking is introduced. The entire system became more convenient and swi!t. Time is given more importance than money.

The !inancial system o! India has shown a great deal o! resilience. It is sheltered !rom any crisis triggered by any e ternal macroeconomics shock as other 0ast $sian /ountries su!!ered. This is all due to a !le ible e change rate regime, the !oreign reserves are high, the capital account is not yet !ully convertible, and banks and their customers have limited !oreign e change e posure.

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INTRODUCTION TO THE ORGANI4ATION

BANKING SYSTEM IN INDIA The #anking +ystem in India consists o!2 3. 6eserve #ank %. (evelopment #anks 5. Public +ector #ank. 8. .oreign #anks :. Private +ector #anks ;. /ooperative #anks <. 6egional 6ural #anks

T(e Reser2e B"n# o' In*%" !

The 6eserve #ank o! India is the /entral #ank o! the /ountry and came into being by the 6eserve #ank o! India $ct 3>58. It was nationali"ed in 3>8=.

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6eserve #ank o! India is the bank that issues and regulates the issue o! currency in India .The banker to the @overnment o! India and the +tate governments. It

manages the public debt. It has the obligation to transact the banking business o! the /entral @overnment. It undertakes to accept money on behal! o! the @overnment and make payment on its behal!. The bankers bank. /ommercial banks maintain their current account with the 6eserve #ank o! India. The bank that manages the volume o! credit created by the commercial banks to ensure price stability. The bank that manages the e ternal value o! the currency ,Indian rupee-.

De2e+o/-ent B"n#s ! These were set up to give long term !inance !or the development o! the country. These are the Industrial .inance /orporation o! India and the Industrial (evelopment #ank o! India, The Industrial 6econstruction #ank o! India and the *ational #ank !or $griculture and 6ural (evelopment. $ !ormer development

bank, the Industrial /redit and Investment /orporation o! India 4td. by a reverse merger in %??%,became a normal commercial bank.It is e pected that the other development banks, having outlived their utility would also be either converted to commercial banks or merged with commercial banks.

P0$+%, Se,tor B"n#s ! These are banks which the @overnment either owns or has a majority stake in it. The largest is the +tate #ank o! India which was !ormed by the merger o! the Presidency #anks K the #ank o! #engal, the #ank o! #ombay and the #ank o! Madras in 3>%3. It was then known as the Imperial #ank. It was nationali"ed in

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3>:: by the passing o! the +tate #ank o! India $ct, 3>::. It subsidiaries or associates.

has

seven

Fore%&n B"n#s !

These

are

branches

o!

banks

incorporated

outside

India. In 3>>:1 >;

many other !oreign banks ,optimistic in view o! Indias liberali"ation- opened branches in India. However, a!ter banking began to become increasingly competitive and margins began to be s&uee"ed coupled with large non per!orming assets, many banks closed their branches

Pr%2"te Se,tor B"n#s !

These are banks which are not government owned or controlled. Their are !reely traded in the +tock Markets.

shares

Coo/er"t%2e B"n#s !

/ooperative #anks are those that are created by a group o! individual to support either a community or a religious group. They operate in metropolitan, urban and semi urban centers to cater to the needs o! small borrowers.

Re&%on"+ R0r"+ B"n#s !

These came into being on 9ctober %, 3><: when : regional rural

banks were

established under what became the 6egional 6ural #anks $ct 3><:. These were

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to bridge the gap in rural credit granting loans and advances to small and marginal !armers, artisans, small entrepreneur and persons o! small means engaged in trade, commerce, industry or other productive ,activities operation. within their area o!

Lo,"+ Are" B"n#s !

4ocal $rea #anks came into e istence in 3>>> and licenses were given !or these banks as it was !elt that regular commercial banks were not !inancial the rural1 agricultural sector ade&uately. 4icenses were given to open branches in three districts. #ranches in urban1 semi urban areas were granted only a!ter ten branches were established in rural areas1 villages.

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INTRODUCTION OF SBI BANK

Se,tors Centr"+ B"n# !

B"n#s 6eserve #ank o! India

N"t%on"+%5e* B"n#s !

+tate #ank o! India 6 $llahabad #ank 6 $ndhra #ank 6 #ank o! #aroda 6 #ank o! India 6 #ank o! Maharashtra 6 /anara #ank , /entral #ank o! India , /orporation #ank , (ena #ank , Indian #ank , Indian 9verseas #ank , 9riental #ank o! /ommerce , Punjab M +ind #ank , Punjab *ational #ank , +yndicate #ank , I(#I #ank, 7nion #ank o! India , 7nited #ank o! India , 7/9 #ank , Oijaya #ank.

, Pr%2"te B"n#s ! $ is #ank , #ank o! 6ajasthan P #harat 9verseas #ank P /atholic +yrian #ank P /enturion #ank o! Punjab P/ity 7nion #ank .(evelopment /redit #ank P (hanalakshmi #ank P.ederal #ank P @anesh #ank o! Burundwad P H(./ #ank PI/I/I #ank P IndusInd #ank PI*@ Oysya #ank PAammu M Bashmir #ank PBarnataka #ank 4imited P Barur Oysya #ank PBotak Mahindra #ank P 4akshmi Oilas #ank P*ainital #ank P6atnakar #ank P +#I /ommercial and International #ank P +outh Indian #ank P Tamilnad Mercantile #ank 4td. . Fore%&n B"n#s ! Re&%on"+ R0r"+ B"n#s ! Coo /er"t% 2e B"n#s ! The $ndaman and *icobar +tate /o'operative #ank 4td. The $runachal Pradesh +tate co'operative $pe $ssam /o'operative $pe 4td. 26 #ank 4td. The #ank 4td The #ihar +tate /o' +outh Malabar @ramin #ank /itibank P H+#/ P +tandard /hartered

operative #ank 4td. The /handigarh +tate /o'operative #ank

HISTORY OF SBI BANK ! The evolution o! +tate #ank o! India can be traced back to the !irst decade o! the 3>th century. It began with the establishment o! the #ank o! /alcutta in /alcutta, on % Aune 3=?;. The bank was redesigned as the #ank o! #engal, three years later, on % Aanuary 3=?>. It was the !irst ever joint'stock bank o! the #ritish India, established under the sponsorship o! the @overnment o! #engal. +ubse&uently, the #ank o! #ombay ,established on 3: $pril 3=8?- and the #ank o! Madras ,established on 3 Auly 3=85- !ollowed the #ank o! #engal. $n important turning point in the history o! +tate #ank o! India is the launch o! the !irst .ive Qear Plan o! independent India, in 3>:3. The Plan aimed at serving the Indian economy in general and the rural sector o! the country, in particular. 7ntil the Plan, the commercial banks o! the country, including the Imperial #ank o! India, con!ined their services to the urban sector. Moreover, they were not e&uipped to respond to the growing needs o! the economic revival taking shape in the rural areas o! the country. There!ore, in order to serve the economy as a whole and rural sector in particular. The $ll India 6ural /redit +urvey /ommittee proposed the take over o! the Imperial #ank o! India, and integrating with it, the !ormer state'owned or state' associate banks. +ubse&uently, an $ct was passed in the Parliament o! India in May 3>::. $s a result, the +tate #ank o! India ,+#I- was established on 3 Auly 3>::. This resulted in making the +tate #ank o! India more power!ul, because as much as a &uarter o! the resources o! the Indian banking system were controlled directly by the +tate. 4ater on, the +tate #ank o! India ,+ubsidiary #anks- $ct was passed in 3>:>. The +tate #ank o! India emerged as a pacesetter, with its operations carried out by the 8=? o!!ices comprising branches, sub o!!ices and three 4ocal Head 9!!ices, inherited !rom the Imperial #ank. Instead o! serving as mere repositories o! the communityJs savings and lending to creditworthy parties, the +tate #ank o! India catered to the needs o! the customers, by banking purpose!ully.

27

St"te B"n# o' In*%" ,+#I- ,4+02 +#I(- is the largest bank in India. The bank traces its ancestry back through the Imperial #ank o! India to the !ounding in 3=?; o! the #ank o! /alcutta, making it the oldest commercial bank in the Indian +ubcontinent. The @overnment o! India nationalised the Imperial #ank o! India in 3>::, with the 6eserve #ank o! India taking a ;?N stake, and renamed it the +tate #ank o! India. In %??=, the @overnment took over the stake held by the 6eserve #ank o! India. +#I provides a range o! banking products through its vast network in India and overseas, including products aimed at *6Is. )ith an asset base o! R3%; billion and its reach, it is a regional banking behemoth. +#I has laid emphasis on reducing the huge manpower through @olden handshake schemes, which led to a !light o! its best and brightest managers which took to retirement allowances and then went on the become senior managers at new private sector banks, and computeri"ing its operations. The roots o! the +tate #ank o! India rest in the !irst decade o! 3>th century, when the #ank o! /alcutta, later renamed the #ank o! #engal, was established on % Aune 3=?;. The #ank o! #engal and two other Presidency banks, namely, the #ank o! #ombay ,incorporated on 3: $pril 3=8?- and the #ank o! Madras ,incorporated on 3 Auly 3=85-.. These three banks received the e clusive right to issue paper currency in 3=;3 with the Paper /urrency $ct, a right they retained until the !ormation o! the 6eserve #ank o! India. The Presidency banks amalgamated on %< Aanuary 3>%3, and the reorgani"ed banking entity took as its name Imperial #ank o! India. The Imperial #ank o! India continued to remain a joint stock company. Pursuant to the provisions o! the +tate #ank o! India $ct ,3>::-, the 6eserve #ank o! India, which is IndiaJs central bank, ac&uired a controlling interest in the Imperial #ank o! India. 9n 5? $pril 3>:: the Imperial #ank o! India became the +tate #ank o! India.In 3>:> the @overnment passed the +tate #ank o! India ,+ubsidiary #anks- $ct, enabling the +tate #ank o! India to take over eight !ormer +tate' associated banks as its subsidiaries. 9n +ept 35, %??=, +tate #ank o! +aurashtra, one o! its $ssociate #anks, merged with +tate #ank o! India.

28

$ssociate !an"s:There are si associate banks that !all under +#I, and together these si banks constitute the +tate #ank @roup. $ll use the same logo o! a blue keyhole and all the associates use the C+tate #ank o!C name !ollowed by the regional head&uartersJ name. 9riginally, the then seven banks that became the associate banks belonged to princely states until the government nationali"ed them in 3>:>. In tune with the !irst .ive Qear Plan, emphasi"ing the development o! rural India, the government integrated these banks into +tate #ank o! India to e pand its rural outreach. There has been a proposal to merge all the associate banks into +#I to create a Cmega bankC and streamline operations. The !irst step along these lines occurred in +eptember %??= when +tate #ank o! +aurashtra merged with +tate #ank o! India, which reduced the number o! state banks !rom seven to si .

+tate #ank o! Indore +tate #ank o! #ikaner M Aaipur +tate #ank o! Hyderabad +tate #ank o! Mysore +tate #ank o! Patiala +tate #ank o! Travancore

%ro th:+tate #ank o! India has o!ten acted as guarantor to the Indian @overnment, most notably during /handra +hekharJs tenure as Prime Minister o! India. )ith more than 33,333 branches and a !urther ;:??S associate bank branches, the +#I has e tensive coverage. +tate #ank o! India has electronically networked all o! its branches under /ore #anking +ystem,/#+-. The bank has one o! the largest $TM networks in the region. More than =:?? $TMs across India. The +tate #ank o! India has had steady growth over its history, though it was marred by the Harshad Mehta scam in 3>>%. In recent years, the bank has sought to e pand its overseas operations by buying !oreign banks. It is the only Indian bank to !eature in the top

29

3?? world banks in the .ortune @lobal :?? rating and various other rankings. Group companies:

+#I /apital Markets 4td +#I Mutual .und ,$ Trust+#I .actors and /ommercial +ervices 4td +#I (.HI 4td +#I /ards and Payment +ervices Pvt 4td +#I 4i!e Insurance /o. 4td ' #ancassurance ,4i!e Insurance+#I .unds Management Pvt 4td +#I /anada

Est"$+%s(-ent ! The establishment o! the #ank o! #engal marked the advent o! limited liability, joint'stock banking in India. +o was the associated innovation in banking, vi". the decision to allow the #ank o! #engal to issue notes, which would be accepted !or payment o! public revenues within a restricted geographical area. This right o! note issue was very valuable not only !or the #ank o! #engal but also its two siblings, the #anks o! #ombay and Madras. It meant an accretion to the capital o! the banks, a capital on which the proprietors did not have to pay any interest. The concept o! deposit banking was also an innovation because the practice o! accepting money !or sa!ekeeping ,and in some cases, even investment on behal! o! the clients- by the indigenous bankers had not spread as a general habit in most parts o! India. #ut, !or a long time, and especially upto the time that the three presidency banks had a right o! note issue, bank notes and government balances made up the bulk o! the investible resources o! the banks. The three banks were governed by royal charters, which were revised !rom time to time. 0ach charter provided !or a share capital, !our'!i!th o! which were privately subscribed and the rest owned by the provincial government. The members o! the board o! directors, which managed the a!!airs o! each bank, were mostly proprietary directors representing the large 0uropean managing agency houses in

India. The rest were government nominees, invariably civil servants, one o! whom was elected as the president o! the board. B0s%ness2' The business o! the banks was initially con!ined to discounting o! bills o! e change or other negotiable private securities, keeping cash accounts and receiving deposits and issuing and circulating cash notes. 4oans were restricted to 6s.one lakh and the period o! accommodation con!ined to three months only. The security !or such loans was public securities, commonly called /ompanyJs Paper, bullion, treasure, plate, jewels, or goods Jnot o! a perishable natureJ and no interest could be charged beyond a rate o! twelve per cent. 4oans against goods like opium, indigo, salt woollens, cotton, cotton piece goods, mule twist and silk goods were also granted but such !inance by way o! cash credits gained momentum only !rom the third decade o! the nineteenth century. $ll commodities, including tea, sugar and jute, which began to be !inanced later, were either pledged or hypothecated to the bank.

M"7or ,("n&e %n t(e ,on*%t%ons ! $ major change in the conditions o! operation o! the #anks o! #engal, #ombay and Madras occurred a!ter 3=;?. )ith the passing o! the Paper /urrency $ct o! 3=;3, the right o! note issue o! the presidency banks was abolished and the @overnment o! India assumed !rom 3 March 3=;% the sole power o! issuing paper currency within #ritish India. The task o! management and circulation o! the new currency notes was con!erred on the presidency banks and the @overnment undertook to trans!er the Treasury balances to the banks at places where the banks would open branches. *one o! the three banks had till then any branches ,e cept the sole attempt and that too a short'lived one by the #ank o! #engal at Mir"apore in 3=5>- although the charters had given them such authority. #ut as soon as the three presidency bands were assured o! the !ree use o! government

31

Pres%*en,1 B"n#s A,t ! The presidency #anks $ct, which came into operation on 3 May 3=<;, brought the three presidency banks under a common statute with similar restrictions on business. The proprietary connection o! the @overnment was, however, terminated, though the banks continued to hold charge o! the public debt o!!ices in the three presidency towns, and the custody o! a part o! the government balances. The $ct also stipulated the creation o! 6eserve Treasuries at /alcutta, #ombay and Madras into which sums above the speci!ied minimum balances promised to the presidency banks at only their head o!!ices were to be lodged. The @overnment could lend to the presidency banks !rom such 6eserve Treasuries but the latter could look upon them more as a !avour than as a right.

B"n# o' M"*r"s ! The decision o! the @overnment to keep the surplus balances in 6eserve Treasuries outside the normal control o! the presidency banks and the connected decision not to guarantee minimum government balances at new places where branches were to be opened e!!ectively checked the growth o! new branches a!ter 3=<;. The pace o! e pansion witnessed in the previous decade !ell sharply although, in the case o! the #ank o! Madras, it continued on a modest scale as the pro!its o! that bank were mainly derived !rom trade dispersed among a number o! port towns and inland centers o! the presidency. India witnessed rapid commerciali"ation in the last &uarter o! the nineteenth century as its railway network e panded to cover all the major regions o! the

32

country. *ew irrigation networks in Madras, Punjab and +ind accelerated the process o! conversion o! subsistence crops into cash crops, a portion o! which !ound its way into the !oreign markets. Tea and co!!ee plantations trans!ormed large areas o! the eastern Terais, the hills o! $ssam and the *ilgiris into regions o! estate agriculture par e cellence. $ll these resulted in the e pansion o! IndiaJs international trade more than si '!old. The three presidency banks were both bene!iciaries and promoters o! this commerciali"ation process as they became involved in the !inancing o! practically every trading, manu!acturing and mining activity in the sub'continent.

)hile the #anks o! #engal and #ombay were engaged in the !inancing o! large modern manu!acturing industries, the #ank o! Madras went into the !inancing o! large modern manu!acturing industries, the #ank o! Madras went into the !inancing o! small'scale industries in a way which had no parallel elsewhere. #ut the three banks were rigorously e cluded !rom any business involving !oreign e change. *ot only was such business considered risky !or these banks, which held government deposits, it was also !eared that these banks enjoying government patronage would o!!er un!air competition to the e change banks which had by then arrived in India. This e clusion continued till the creation o! the 6eserve #ank o! India in 3>5:.

33

Pres%*en,1 B"n#s o' Ben&"+2' The presidency #anks o! #engal, #ombay and Madras with their <? branches were merged in 3>%3 to !orm the Imperial #ank o! India. The triad had been trans!ormed into a monolith and a giant among Indian commercial banks had emerged. The new bank took on the triple role o! a commercial bank, a bankerJs bank and a banker to the government. #ut this creation was preceded by years o! deliberations on the need !or a J+tate #ank o! IndiaJ. )hat eventually emerged was a Jhal!'way houseJ combining the !unctions o! a commercial bank and a &uasi'central bank. The establishment o! the 6eserve #ank o! India as the central bank o! the country in 3>5: ended the &uasi'central banking role o! the Imperial #ank. The latter ceased to be bankers to the @overnment o! India and instead

#ecame agent o! the 6eserve #ank !or the transaction o! government business at centers at which the central bank was not established. #ut it continued to maintain currency chests and small coin depots and operate the remittance !acilities scheme !or other banks and the public on terms stipulated by the 6eserve #ank. It also acted as a bankersJ bank by holding their surplus cash and granting them advances against authori"ed securities. The management o! the bank clearing houses also continued with it at many places where the 6eserve #ank did not have o!!ices. The bank was also the biggest tendered at the Treasury bill auctions conducted by the 6eserve #ank on behal! o! the @overnment.

34

The establishment o! the 6eserve #ank simultaneously saw important amendments being made to the constitution o! the Imperial #ank converting it into a purely commercial bank.

Imperial #ank2' The Imperial #ank during the three and a hal! decades o! its e istence recorded an impressive growth in terms o! o!!ices, reserves, deposits, investments and advances, the increases in some cases amounting to more than si '!old.

The !inancial status and security inherited !rom its !orerunners no doubt provided a !irm and durable plat!orm. #ut the lo!ty traditions o! banking which the Imperial #ank consistently maintained and the high standard o! integrity it observed in its operations inspired con!idence in its depositors that no other bank in India could perhaps then e&ual. $ll these enabled the Imperial #ank to ac&uire a pre'eminent position in the Indian banking industry and also secure a vital place in the countryJs economic li!e.

35

St"-/ o' I-/er%"+ B"n# o' In*%"

S0$s%*%"r%es2

'

The +tate #ank @roup includes a network o! eight banking subsidiaries and several non'banking subsidiaries. Through the establishments, it o!!ers various services including merchant banking services, !und management, !actoring services, primary dealership in government securities, credit cards.

T(e e%&(t $"n#%n& s0$s%*%"r%es "re 33. 3%. 35. 38. 3:. +tate #ank o! #ikaner and Aaipur ,+##A+tate #ank o! Hyderabad ,+#H+tate #ank o! India ,+#I+tate #ank o! Indore ,+#I6+tate #ank o! Mysore ,+#M36

3;. 3<. 3=.

+tate #ank o! Patiala ,+#P+tate #ank o! +aurashtra ,+#++tate #ank o! Travancore ,+#T-

Pro*0,ts Person"+ B"n#%n& !

+#I Term (eposits +#I 4oan .or Pensioners +#I 6ecurring (eposits 4oan $gainst Mortgage 9! Property +#I Housing 4oan 4oan $gainst +hares M (ebentures +#I /ar 4oan 6ent Plus +cheme +#I 0ducational 4oan Medi'Plus +cheme

Ot(er Ser2%,es !

$griculture16ural #anking *6I +ervices $TM +ervices (emat +ervices

37

/orporate #anking Internet #anking Mobile #anking International #anking +a!e (eposit 4ocker 6#I0.T 0'Pay 0'6ail +#I Oishwa Qatra .oreign Travel /ard #roking +ervices @i!t /he&ues

NET8ORK OF SBI BANK ! +#I #ank India has :% .oreign 9!!ices in 58 countries. +#I India serves the international needs o! its !oreign customers, in addition to conducting retail operations. The !ocus o! the o!!ices o! +#I is India'related business. .ew o! the countries where +#I #ank has branches are as under2

$ustralia #ahamas #ahrain #angladesh #elgium #hutan /anada .rance @ermany Hong Bong Aapan Maldives

38

Mauritious Muscat *epal *igeria 9man 6ussia +ingapore +ri 4anka +outh $!rica 7B 7+$

Str0,t0re o' Or&"n%5"t%on !

Centr"+ Bo"r* o' St"te B"n# o' In*%" 9$s on 35th Aanuary %??>BOARD OF DIRECTORS Se,. o' SBI A,t6 :;<< 3>,a-

Sr. No. 3.

N"-e o' D%re,tor +hri 9.P. #hatt /hairman +hri +.B. #hattacharyya M( M //M69 +hri 6. +ridharan M( M @0,$M+(r. $shok Ahunjhunwala +hri (ileep /. /hoksi +hri +. Oenkatachalam +hri. (. +undaram (r. (eva *and #alodhi Pro!. Mohd. +alahuddin $nsari

%.

3>,b-

5. 8. :. ;. <. =. >.

3>,b3>,c3>,c3>,c3>,c3>,d3>,d-

39

3?. 33. 3%. 35.

(r.,Mrs.- Oasantha #harucha (r. 6ajiv Bumar +hri $run 6amanathan +mt. +hyamala @opinath

3>,d3>,d3>,e3>,!-

PERFORMANCE OF SBI BANK

INVESTOR RELATIONS ! St"te B"n# o' In*%", the countrys largest commercial #ank in terms o! pro!its, assets, deposits, branches and employees, welcomes you to its DInvestors 6elations +ection. +#I, with its heritage dating back to the year 3=?;, strives to continuously provide latest and upto date in!ormation on its !inancial per!ormance. It is our endeavor to walk on the path o! transparency and allow complete access to all the stakeholders enabling total awareness about the #ank. The #ank communicates with the stakeholders through a variety o! channels, such as through e'mail, website, con!erence call, one'on'one meeting, analysts meet and attendance at Investor /on!erence throughout the world. Please !ind below #anks !inancial results, analysis o! per!ormance and other highlights which will be o! interest to Investors, .und Managers and $nalysts. +#I has always been !undamentally strong in its core business which is mirrored

SBI FINANCIAL HIGHLIGHTS ! PAST < YEARS TABLE I STATE BANK OF INDIA !FINANCIAL HIGHLIGHTS =>>=!>? Rs. %n B%++%on De/os%ts FY=>>= FY=>>@ FY=>>A FY=>>< FY =>>B =?><.B =;B:.=A @:CB.:; @B?>.AC @C>>.AB FY=>>? A@<<.=:

A*2"n,es In2est-ents Tot"+ Assets Interest In,o-e Interest E./enses Net Interest In,o-e Non!Interest In,o-e Tot"+ O/er"t%n& In,o-e St"'' E./enses O2er(e"* E./enses Tot"+ O/er"t%n&

:=>C.>B :@??.<C :<?;.@A =>=@.?A =B:C.>:

@@?@.@B

:A<:.A= :?=@.AC :C<B.?B :;?>.;C :B=<.@A :A;:.A; @AC=.=C @?<C.?B A>?C.:< A<;C.C@ A;A>.=; <BB<.B< =;C.:> @:>.C? @>A.B> @=A.=C =>?.=; =::.>; :;=.?A :CA.C@ ;>.C: A:.?A ;;.?C <?.A> :::.CB :@;.A< ?B.:= ?:.=> @<;.C> =>@.;> :<<.C; ?A.@< =@>.=A C:.=@ @B.>= ::?.=< @;A.;: =@A.@? :B>.<A <?.B; =:C.=@ ?;.@@ @C.;: ::C.=A

:@=.<< :<?.:C :C?.;C =:>.B< <:.<@ =>.<C ?=.:: <B.C; ==.<@ ?;.A= BA.AC =?.;? ;=.A< B;.>? @:.B? :>>.?A

41

E./enses O/er"t%n& Pro'%t B>.AA ??.?B ;<.<@ :>;.;: ::=.;; :>>.>>

Tot"+ Pro2%s%ons

@B.:A =A.@>

AB.?> @:.>B

<C.?= @B.C:

BB.CB A@.><

BC.;@ AA.>?

<A.<; A<.A:

Net Pro'%t

TABLE II

STATE BANK OF INDIA !FINANCIAL HIGHLIGHTS =>>=!>? 9IN US DE

In USD B%++%on De/os%ts A*2"n,es In2est-ents Tot"+ Assets Interest In,o-e

FY=>>= FY=>>@ FY=>>A FY=>>< FY=>>B <<.AA =A.?B =;.?A ?:.@B B.:: B=.@< =;.>: @B.=; ?;.:< B.<< A.A< =.:> :.=: @.@: 42 ?=.CC @B.:@ A=.A? ;@.=C B.;? A.A: =.<B :.?A A.@> C@.;: AB.=B A<.>B :><.:@ ?.A: A.=@ @.:C :.B@ A.C: C<.:C <C.BC @B.A@ ::>.?@ C.>B A.<? @.A; :.BB <.:<

FY=>>? :>>.:; ??.B> @A.@: :@>.@@ ;.>C <.@; @.B; :.@@ <.>=

Interest E./enses Net Interest In,o-e Non!Interest In,o-e Tot"+ O/er"t%n& In,o-e

A.=< :.CB >.CB =.?=

St"'' E./enses O2er(e"* E./enses Tot"+ O/er"t%n& E./enses O/er"t%n& Pro'%t Tot"+ Pro2%s%ons Net Pro'%t

:.>B >.A= :.AC :.=A >.?A >.<>

:.=> >.A? :.B? :.BA >.;C >.BB

:.A? >.BA =.:: =.:; :.@A >.C<

:.<C >.?= =.@> =.<: :.<@ >.;C

:.C= >.C: =.B@ =.<= :.<A >.;C

:.C= >.;> =.?= =.@> :.=B :.>A

TABLE III STATE BANK OF INDIA

KEY FINANCIAL INDICATORS9FE

FY=>>= FY=>>@ FY=>>A FY=>>< FY=>>B FY=>>?

ROA ROE EPS9Rs.E BVS9Rs.E D%2%*en* P"1 o0t R"t%o

>.?@ :<.;? AB.=> =C; :=.;C

>.CB :C.>< <;.>> @=? :A.A>

>.;A :C.:; B;.;A @CA :<.?@

>.;; :C.:> C:.?; A<> :<.=;

>.C; :<.A? C@.?@ <=< :B.?=

>.CA :A.=A CB.=; B>B :B.==

CostGIn,o-e R"t%o

<A.A>

<>.<@

A;.:C

A?.C@

<C.?>

<A.:C

:@.@< C"/%t"+ A*e30",1 R"t%o ?.B>

:@.<> ?.::

:@.<@ B.>=

:=.A< <.::

::.CC A.??

:=.@A A.?;

43

Cost o' De/os%ts

Y%e+* on A*2"n,es

;.BB :>.>B =.;:

C.;? ;.<@ =.;<

C.:? C.B= @.>A

?.BC ?.;A @.@;

?.?C ?.:> @.A>

C.B? B.CC @.@:

Y%e+* on Reso0r,es De/+o1e* Net Interest M"r&%n

Gross NPA R"t%o

::.;<

;.@@

?.?<

<.;B

@.B:

=.;=

Net NPA R"t%o

<.B@

A.<>

@.AC

=.B<

:.CC

:.<B

Pro2%s%on Co2er"&e

<B

<A

<?

<?

A;

A?

TABLE IV SUMMARY OF STATE BANK OF INDIAHS BALANCE SHEET

9Rs. %n $%++%onE

MARCH MARCH MARCH MARCH MARCH MARCH =>>= =>>@ =>>A =>>< =>>B =>>? <.=B :AB.;C <.=B :BB.?? <.=B :;?.>< <.=B =@<.AB <.=B =?:.:C <.=B @>?.?= A@<<.=: @;?.>@ B>>.A= <BB<.B< =;>.?B

C"/%t"+ Reser2es I S0r/+0s De/os%ts Borro)%n&s Ot(er L%"$%+%t%es I Pro2%s%ons Tot"+ ASSETS

=?><.B> =;B:.=@ @:CB.:; @B?>.AC @C>>.AB ;@.=A <@:.=> ;@.>A <@=.AB :@A.@: <<<.@A :;:.CA A;<.?; @>B.A: <<B.;C

@AC=.=C @?<C.?B A>?C.:< A<;C.C@ A;A>.=; C"s( I $"+"n,es )%t( =:C.?@ :=?.@C :;>.A: :BC.:> =:B.<@

44

Reser2e B"n# o' In*%" B"+"n,es )%t( $"n# "n* -one1 "t ,"++ I s(ort not%,e In2est-ents A*2"n,es F%.e* Assets Ot(er Assets

A@>.<C

@=A.A@

=A<.=<

==<.:=

==;.>?

==C.;= :A;:.A; @@?@.@B =C.:; =<=.;= <BB<.B< @>B<.;> =@@.BC

:A<:.A= :?=@.AC :C<B.?B :;?>.;C :B=<.@A :=>C.>B :@??.<C :<?;.@A =>=@.?A =B:C.>: =A.:< :A;.@A =@.C; :C=.>: =B.A< :?;.;A =B.;C :C@.;: =?.<@ ==@.C:

Tot"+ Cont%n&ent L%"$%+%t%es B%++s 'or Co++e,t%on

@AC=.=C @?<C.?? A>?C.:< A<;C.C@ A;A>.=; :>==.:@ :>B:.>B :::C.;= :<;@.;? ==CC.<: :>:.?? ?<.?: :>:.;A :B?.?? =><.;@

TABLE V SUMMARY OF STATE BANK OF INDIAHS BALANCE SHEET

9In US D $%++%onE

MARCH =>>= >.:: @.>:

MARCH MARCH =>>@ >.:: @.<: =>>A >.:= A.<: ?=.CC

MARCH MARCH MARCH =>>< =>>B =>>? >.:= <.@C C@.;A >.:= B.>C >.:= ?.>C

C"/%t"+ Reser2es I S0r/+0s De/os%ts

<<.AA B=.@<

C<.:C :>>.:;

45

Borro)%n&s Ot(er L%"$%+%t%es I Pro2%s%ons Tot"+ ASSETS C"s( I $"+"n,es )%t( Reser2e B"n# o' In*%" B"+"n,es )%t( $"n#s "n* -one1 "t ,"++ I s(ort not%,e In2est-ents A*2"n,es F%.e* Assets Ot(er Assets Tot"+ Cont%n&ent L%"$%+%t%es B%++s 'or Co++e,t%on

:.;:

:.;B

@.>? :=.?> ;@.=C A.@<

A.@; ::.@@ :><.:@ @.CA

B.C?

;.:@

:>.CC ::.=: ?:.@< ?;.:A A.AC =.BC

:=.AC :@.C: ::>.?@ :@>.@@ A.C< B.B;

C.C=

B.C@

<.B:

<.:<

<.:@ <.=?

=;.?A @B.=; =A.?B =;.>: >.A; @.>B >.<> @.C@

A=.A? @B.:@ >.B: A.:: ;@.=C =<.<; =.@@

A<.>B AB.=B >.B= A.=> :><.:@ @B.AA @.C@

@B.A@ <C.BC >.B= <.>=

@A.@: ??.B> >.B< <.C=

?:.@< ?;.:A =>.;< ==.@A =.>C :.<;

::>.?@ :@>.@@ <:.@> ?>.<@ A.B= <.@C

TABLE VI STATE BANK OF INDIA MARKET RELATED RATIOS

MARKET RELATED RATIOS

MAR >@ MAR >A MAR >< MAR >B MAR >?

46

M"r#et Pr%,e 9RsE 9"s on +"st *"1 o' t(e 1e"rG30"rterE

=?>

B>B

B<?

;BC

;;@

Pr%,e to Boo# R"t%o 9FE

>.C@

:.<C

:.AA

:.CA

:.BA

M"r#et C"/%t"+%5"t%on 9Rs %n B%++%onE

:A=.>< @:C.?C @A<.?< <>;.AC

<==.<B

E"rn%n& Per S("re 9 RsE

<;.>>

B;.;A

C:.?;

C@.?@

CB.=;

PGE R"t%o 9FE

A.<C

C.BB

C.>@

:>.A>

::.<:

47

48

49

SBI Person"+ Lo"ns !

51

+#I Personal 4oans also known as +tate #ank o! India personal !inance schemes, aim to provide the necessary !inancial assistance to as many people as possible to help them reali"e their dreams or come out o! situations o! !inancial need. +tate #ank o! India being IndiaJs largest bank is a trusted name and the +#I personal loan rates o! interest are kept at the most competitive level to make a personal loan as approachable.

The most popular +#I personal loans include housing loans, car loans, education loan, loans against property, shares or debentures, reverse mortgage loans and more.

+tate #ank o! India Housing 4oan or +#I Home 4oan is available in complete transparency and at no hidden costs. The interest rates are charged on daily reducing basis.

SBI C"r Lo"ns

o!!er a lucrative deal o! low interest rates, easy repayment

!acilities and inclusion o! all additional charges like vehicle registration, insurance, one'time road ta and car accessories. +tate #ank o! India o!!ers car loans !or purchase o! all kinds o! personal use and commercial vehicles.

+tate #ank o! India o!!ers E*0,"t%on Lo"n to Indian nationals !or pursuing higher studies within the country or abroad. The +#I education loan covers the travel e penses, tuition !ees, e amination !ees, costs o! books and other course material and stationery, re!undable caution deposits, e penses !or purchase o! computers necessary !or the course and also a two'wheeler conveyance up to 6s. :?, ??? in costs along with any other major e penses mandatory to the course.

52

Person"+ Lo"n "&"%nst T(%r* P"rt1 Se,0r%t1 o' NSCG IVPG RBI Re+%e' Bon*s et,. !

Ten0re 7p to 5 years

R"te o' Interest 3.??N above +#$6 i.e. 35.%:N p.a. ?.%:N above +#$6 i.e. 3%.:?N

$bove 5 years upto ; years

p.a.

53

9FAJE PERSONAL LOAN T. )hat are my loan limitsU A. Qour personal loan limit would be determined by your income and repayment capacity. *ormally you can avail a loan upto 6s.%.:? lacs. However, i! in metros o! *ew(elhi, Mumbai, #angalore, /hennai, Hyderabad and Bolkata, salaried individuals or sel!'employed pro!essionals can avail Personal 4oan upto 6s.:.?? lacs. I! the salary o! a salaried individual is credited to his1her account with our #ank or a sel!'employed pro!essional has been maintaining a satis!actorily conducted account with us, a Personal 4oan o! up to 6s.3? lacs can be sanctioned. T. /an my spouses income be included !or calculating the loan or the loan is taken jointly. T. )hat are the important documents that I need to provideU loan amountU

A. Qes, your spouseJs income can be included provided he1she guarantees the

A. Qou will need to !urnish only the !ollowing documents i! you are an e isting customer o! the #ank2 ' Passport si"e photograph ' Proo! o! o!!icial address !or sel! employed individuals and pro!essionals. This can include ' 4atest shop +alary and clip establishment and .orm 3;, certi!icate14ease in the case deed1Telephone o! salaried #ill persons

T. (o

have

to

pledge

some

!orm

o!

securityU

A. *o security is re&uired. T. )hat is the repayment schedule likeU A. The minimum amount that you are e pected to pay every month is the 0MI. Qou

54

are allowed to pay more than the 0MI i! you wish to, and we do not charge any prepayment penalty. T. )hat is 0MIU A. 0MI stands !or 0&uated Monthly Installments. This installment comprises both principal and interest components. 7se the 0MI calculator to !ind out your monthly payments based on the loan amount, the rate o! interest and the repayment period. /hoose the combination that best meets your !inancial resources and re&uirements. T. /an I prepay the loanU $re there any penaltiesU A. Qes, you can prepay the loan partly or !ully, at any stage, without any prepayment penalty. T. )hat is the processing !eeU $re there any other chargesU A. Processing charges are 3 per cent o! the loan amount. This is amongst the lowest !ees in the industry. Processing !ees have to be paid up!ront. There are no hidden costs or other administrative charges. J. (o I have the option o! choosing a !i ed or !loating rate !or the loanU A. Qou have the option to avail the loan with either a !i ed interest rate or a !loating one. In the case o! a !i ed rate loan, the interest rate on the loan will remain !i ed through the entire tenure o! the loan, whereas in the case o! a !loating rate loan, the interest rate could decline or rise in line with the changes in the #ankJs Medium Term 4ending 6ate ,+#MT46-. J. How does +#I Personal loan compare with those o!!ered by other banksU A. There is total transparency with regard to the rate o! interest and the !ees charged by us. ' )e o!!er personal loans at the cheapest rates o! interest, with no security or collateral ' )e o!!er loans !or the longest tenors ,8= months-, with the !le ibility provided to reduce the tenor by prepaying the loan without any penalty. ' )e provide !inance !or any personal need or re&uirement, the total amount being determined on the basis o! repaying capacity.

55

' )ith an +#I personal loan you can choose between !i ed rates o! interest and !loating interest rates.

INTRODUCTION OF HDFC BANK B",#&ro0n* H(./ was incorporated in 3><< with the primary objective o! meeting a social *eed K that o! promoting home ownership by providing long'term !inance to households !or their housing needs. H(./ was promoted with an initial share capital o! 6s. 3?? million.

B0s%ness O$7e,t%2es The primary objective o! H(./ is to enhance residential housing stock in the /ountry through the provision o! housing !inance in a systematic and pro!essional Manner, and to promote home ownership. $nother objective is to increase the !low o! resources to the housing sector by integrating the housing !inance sector with the overall domestic !inancial markets.

Or&"n%5"t%on"+ Go"+s H(./s main goals are to a- (evelop close relationships with individual households. b- Maintain its position as the premier housing !inance institution in the country, c- Trans!orm ideas into viable and creative solutions. d- Provide consistently high returns to shareholders.

56

e- To grow through diversi!ication by leveraging o!! the 0 isting client.

HISTORY OF HDFC BANK

The Housing (evelopment .inance /orporation 4imited ,H(./- was amongst the !irst to receive an Jin principleJ approval !rom the 6eserve #ank o! India ,6#I- to set up a bank in the private sector, as part o! the 6#IJs liberali"ation o! the Indian #anking Industry in 3>>8. The bank was incorporated in $ugust 3>>8 in the name o! JH(./ #ank 4imitedJ, with its registered o!!ice in Mumbai, India. H(./ #ank commenced operations $s a +cheduled /ommercial #ank on 3;th Aanuary 3>>:. In the year 3>>= H(./ #ank had tied up with the $hmadabad +tock 0 change ,$+0- to act as its clearing bank

B0s%ness Fo,0s ! H(./ #ankJs mission is to be a )orld'/lass Indian #ank. The objective is to build sound customer !ranchises across distinct businesses so as to be the pre!erred provider o! banking services !or target retail and wholesale customer segments, and to achieve healthy growth in pro!itability, consistent with the bankJs risk appetite. The bank is committed to maintain the highest level o! ethical standards, pro!essional integrity, corporate governance and regulatory compliance.

57

S0$s%*%"r1 "n* Asso,%"te Co-/"n%es T(e s0$s%*%"r%es o' HDFC ,ons%sts o'

3. H(./ #ank %. H(./ Mutual .und 5. H(./ +tandard 4i!e Insurance /ompany 8. H(./ 6ealty :. H(./ /hubb @eneral Insurance /ompany 4imited. ;. Intel net @lobal +ervices 4imited <. /redit In!ormation #ureau ,India- 4imited =. 9ther /ompanies /o K Promoted by H(./ H(./ Trustee /ompany 4td. @67H .inance 4td. H(./ (evelopers 4td. H(./ Oenture /apital 4td. H(./ Oenture Trustee /ompany 4td H(./ +ecurities 4td. H(./ Holding 4td. Home 4oan +ervices India Pvt. 4td.

58

HDFC BANK T(e Or&"n%5"t%on ! The Housing (evelopment .inance /orporation 4imited ,H(./- was amongst the !irst to receive an Jin principleJ approval !rom the 6eserve #ank o! India ,6#I- to set up a bank in the private sector, as part o! the 6#IJs liberalisation o! the Indian #anking Industry in 3>>8. The bank was incorporated in $ugust 3>>8 in the name o! JH(./ #ank 4imitedJ, with its registered o!!ice in Mumbai, India. H(./ #ank commenced operations $s a +cheduled /ommercial #ank on 3;th Aanuary 3>>:. In the year 3>>= H(./ #ank had tied up with the $hmadabad +tock 0 change ,$+0- to act as its clearing bank.

C"/%t"+ Str0,t0re !

The authori"ed capital o! H(./ #ank is 6s.8:? crore ,6s.8.: billion-. The paid'up capital is 6s.533.> crore ,6s.5.3 billion-. The H(./ @roup holds %%.3N o! the bankJs e&uity and about 3>.8N o! the e&uity is held by the $(+ (epository ,in respect o! the bankJs $merican (epository +hares ,$(+- Issue-. 6oughly 53.5N o! the e&uity is held by .oreign Institutional Investors ,.IIs- and the bank has about 3>?,??? shareholders. The shares are listed on the The +tock 0 change, Mumbai and the *ational +tock 0 change.

59

T%-es B"n# A-"+&"-"t%on !

In a milestone transaction in the Indian banking industry, Times #ank 4imited ,another new private sector bank promoted by #ennett, /oleman M /o.1Times @roup- was merged with H(./ #ank 4td., e!!ective .ebruary %;, %???. $s per the scheme o! amalgamation approved by the shareholders o! both banks and the 6eserve #ank o! India, shareholders o! Times #ank received 3 share o! H(./ #ank !or every :.<: shares o! Times #ank. The ac&uisition added signi!icant value to H(./ #ank in terms o! increased branch network, e panded geographic reach, enhanced customer base, skilled manpower and the opportunity to cross'sell and leverage alternative delivery channels.

ORGANI4ATIONAL STRUCTURE OF HDFC BANK !

Bo"r* o' D%re,tors ! 3. Mr.Aagdish Bapoor %. $ditya Puri 5. 6anu Bamad 8. Oineet Aain :. $rvind Pande ;. @autam (ivan <. / M Oasudav

Mr. Aagdish Bapoor took over as the bankJs /hairman in Auly %??3. Prior to this, Mr. Bapoor was a (eputy @overnor o! the 6eserve #ank o! India. The Managing (irector, Mr. $ditya Puri, has been a pro!essional banker !or over %: years, and be!ore joining H(./ #ank in 3>>8 was heading /itibankJs operations in Malaysia.

The #ankJs #oard o! (irectors is composed o! eminent individuals with a wealth o! e perience in public policy, administration, industry and commercial banking. +enior e ecutives representing H(./ are also on the #oard.

61

The management consists o! the /hairman Mr Aagdish kapoor and > other (irectors that assist him in achieving objectives o! the bank.

M6. Aagdish Bapoor

Mr. Aagdish Bapoor holds a Masters degree in /ommerce and is a .ellow member o! Indian Institute o! #anking and .inance. Prior to joining the #ank, Mr. Bapoor was the (eputy @overnor o! the 6eserve #ank o! India. He retired as (eputy @overnor o! 6eserve #ank o! India a!ter serving !or 5> years. )hile with 6eserve #ank o! India, Mr. Bapoor was the /hairman o! the (eposit Insurance and /redit @uarantee /orporation o! India and #haratiya 6eserve #ank *ote Mudran 4imited. He also served on the boards o! 0 port Import #ank o! India, *ational Housing #ank, *ational #ank !or $griculture and 6ural (evelopment ,*$#$6(- and +tate #ank o! I*(I$.

62

M6. $ditya Puri.

Mr. $ditya Puri holds a #achelors degree in /ommerce !rom Punjab 7niversity and is an associate member o! the Institute o! /hartered $ccountants o! India. Mr. $ditya Puri has been the Managing (irector o! the #ank since +eptember 3>>8.

Mr. BeBi M. Mistry Mr. Mistry is Oice /hairman M Managing (irector o! Housing (evelopment .inance /orporation 4imited and /hairman o! @67H .inance 4imited. He is also a (irector on the #oard o! H(./ (evelopers 4imited, H(./ +tandard 4i!e Insurance /o. 4td, H(./ @eneral Insurance /ompany 4imited, In!rastructure 4easing M .inancial +ervices 4imited, +un Pharmaceutical Industries 4imited, The @reat 0astern +hipping /ompany 4imited, *e @en Publishing 4imited, India Oalue .und $dvisors Private 4imited, H(./ $sset Management /ompany 4imited, @reatship ,India- 4imited, @riha Investments'Mauritius and $ssociation o! 4easing M .inancial +ervices /ompanies.

Mr. Oineet Aain

63

Mr. Aain is Managing (irector o! #ennett, /oleman M /o. 4imited and (irector in Times In!otainment Media 4imited, 0ntertainment *etwork ,India- 4imited, 9ptimal Media +olutions 4imited, The Press Trust o! India 4imited, Times Internet 4imited, Times @lobal #roadcasting /ompany 4imited, #harat *idhi 4imited, Times Aournal India Private 4imited, )orldwide Media Private 4imited,.

Mrs. 6enu Barnad Mrs. Barnad is a Aoint Managing (irector o! Housing (evelopment .inance /orporation 4imited and /hairperson o! H(./ Oenture /apital 4imited, H(./ Property Oentures 4imited and Home 4oan +ervices India Private 4imited. +he is a (irector o! H(./ $sset Management /ompany 4imited, @67H .inance 4imited, H(./ 6ealty 4imited, /redit In!ormation #ureau ,India- 4imited, H(./ @eneral Insurance /ompany 4imited, I/I India 4imited, Indraprastha Medical /orporation 4imited, H(./ +tandard 4i!e Insurance /ompany 4imited, +parsh #P9 +ervices 4imited, Mother (airy .ruits M Oegetables Private 4imited, .eedback Oentures Private 4imited, Motor Industries /o. 4imited, 0gyptian Housing .inance /ompany and $scendas Pte. 4imited, +ingapore.

64

Mr. $rvind Pande He was a Aoint +ecretary to the Prime Minister o! India !or 0conomics, +cience and Technology issues. Mr. Pande has served as a (irector, (epartment o! 0conomic $!!airs, Ministry o! .inance, @overnment o! India and has dealt with )orld #ank aided projects. Mr. Pande has also served on the #oard o! +teel $uthority o! India 4imited as its /hairman and /hie! 0 ecutive 9!!icer ,/09-.

Mr. $shim +amanta He has vast e perience in the !ield o! bulk drugs and pharmaceutical !ormulations. He is a (irector o! +amanta 9rganics Private 4imited, *autilus Trading M 4easing Private 4imited, $shish 6ang 7dyog Private 4imited, +amanta Movies Private 4imited and +hakti /ine +tudios Private 4imited. Mr. +amanta has also been engaged in setting up and running o! !ilm editing and dubbing studio.

Mr. @autam (ivan Mr. (ivan is on the #oard o! H(./ +tandard 4i!e Insurance /ompany 4imited, #altic /onsultancy M +ervices Private 4imited, #ell /eramics 4imited, #rady M Morris 0ngineering /ompany 4imited, /handanbhoy and Aassoobhoy /onsultants

65

Private 4imited, +erendib Investments Private 4imited and $scent Hotels Private 4imited.

(r. Pandit Palande (r. Palande has e tensive e perience o! working in the !ields o! business administration, management and agriculture. 7nder the guidance o! (r. Palande, Q/M97 has become one o! the green universities in India. $s a project (irector o! Indian +pace 6esearch 9rganisation ,I+69- @$P'5 o! Q/M97, (r. Palande has been serving the agriculture community on a large scale through satellite. Pro*0,ts "n* Ser2%,es K HDFC B"n#

Pro*0,t r"n&e2

The !ollowing is the product range o!!ered at H(./2 )hile various deposit products o!!ered by the bank are assigned di!!erent names, the deposit products can be categori"ed broadly into the !ollowing types. (e!inition o! major deposit schemes are as under2 '

:. De-"n* *e/os%ts C(emand (epositsC means a deposit received by the bank which is withdrawn able on demandG a- +avings $ccount2

66

C+avings (epositsC means a !orm o! (emand (eposit which is subject to restrictions as to the number o! withdrawals as also the amounts o! withdrawals permitted by the bank during any speci!ied periodG H(./ provides with saving bank account with the usual !acilities, and one also gets a !ree $TM card, intrbranch banking, bill payment !acilities, phone banking and mobile banking.

=. Ter- De/os%ts CTerm (epositC means a deposit received by the bank !or a !i ed period withdraw able only a!ter the e piry o! the !i ed period and includes deposits such as 6ecurring 1 (ouble #ene!it (eposits .

@. Not%,e De/os%t

JJ*otice (epositJJ means Term (eposit !or a speci!ic period but which can be withdrawn on giving at least one complete banking dayJs notice. A. C0rrent A,,o0nt C/urrent $ccountC means a !orm o! (emand (eposit where!rom withdrawals are allowed any number o! times depending upon the balance in the account or up to a particular agreed amount and will also include other deposit accounts which are neither +avings (eposit nor Term (epositG The account holder gets a personali"ed che&ue book, monthly account statements, and Inter'branch banking.

<. Cor/or"te A,,o0nt !

67

These are more commonly known as +alary $ccounts. These are account in H(./ bank with "ero balance. These are given to salaried people. These accounts are opened by the employer !or the employees to deposit the salary o! the employee directly to the account.

B. HDFC B"n# Pre'erre* !

$ pre!erential +avings $ccount where in, one is assigned with a dedicated 6elationship Manager, whos youre the one point contact. 9ne also get privileges like !ee waivers, enhanced $TM withdrawal limit, priority locker allotment, !ree (emat $ccount and lower interest rates on loans. ?. S)ee/!In A,,o0nt ! $ .i ed (eposit linked to ones +avings $ccount. +o, even i! ones +avings $ccount runs a bit short, one can issue a che&ue ,or use $TM /ard-.

C. S0/er S"2er A,,o0nt ! It gives one an overdra!t !acility up to <:N o! ones !i ed deposit. In an emergency, you can access your !unds while your !i ed deposit continues to earn high interest.

;. HDFC B"n# P+0s ! $part !rom 6egular and Premium /urrent $ccounts H(./ also has H(./ #ank Plus, a /urrent $ccount and then something e tra !or the H(./ bank customers. 9ne can trans!er up to 6s. :? lakh every month at no e tra charges, between the !our metros.

68

::. De-"t A,,o0nt 9ne can conduct hassle'!ree transactions on the stock market !or ones shares. The shares held by the customer are protected !rom damage, loss and the!t, by maintaining these shares in electronic !orm. This account can be accessed through Internet too.

:=. Lo"ns There are a variety o! loan schemes o!!ered like personal loans, new car loans, used car loans, loan against shares, consumer loans, two wheeler loans, and home loans.

Per'or-"n,e o' HDFC B"n#

A)"r*s "n* A,(%e2e-ents

H(./ #ank began operations in 3>>: with a simple mission2 to be a L8or+*! ,+"ss In*%"n B"n#L. )e realised that only a single'minded !ocus on product &uality and service e cellence would help us get there. Today, we are proud to say that we are well on our way towards that goal. It is e tremely grati!ying that our e!!orts towards providing customer convenience have been appreciated both nationally and internationally.

69

=>>;

$sian #anker MAs%"n B"n#er Best Ret"%+ B"n# %n In*%" A)"r* =>>; M 0 cellence in 6etail .inancial +ervices

=>>C

.inance $sia MBest B"n# "n* Best C"s( M"n"&e-ent B"n#M /ountry $wards !or $chievement %??= /**'I#* MIn*%"n o' t(e Ye"r 9B0s%nessEM *asscom IT 7ser MBest IT A*o/t%on %n t(e B"n#%n& Se,torM $ward %??= #usiness India .orbes $sia MBest B"n# =>>CM F"$ <> ,o-/"n%es %n As%" P",%'%,

$sian #anker Best Ret"%+ B"n# =>>C 0 cellence in 6etail .inancial +ervices $siamoney Best +o,"+ C"s( M"n"&e-ent B"n# A)"r* 2ote* $1 Cor/or"tes

Microso!t M Indian Se,0r%t1 Str"te&%st A)"r* =>>C 0 press @roup )orld Trade For o0tst"n*%n& ,ontr%$0t%on to %ntern"t%on"+ tr"*e /enter $ward o! ser2%,es. honour #usiness Monitor survey Today' One o' In*%"Ms LMost Inno2"t%2e Co-/"n%esL @roup Best B"n# A)"r* %n t(e Pr%2"te Se,tor ,"te&or1 M

.inancial 0 press'0rnst Qoung $ward

@lobal H6 ME-/+o1er Br"n* o' t(e Ye"r =>>? !=>>CM A)"r* ! F%rst 0 cellence R0nner 0/6 I -"n1 -ore $wards ' $sia Paci!ic H6M /ongress2

=>>?

71

(un M #radstreet MCor/or"te Best B"n#M A)"r* K $merican 0 press /orporate #est #ank $ward %??< The #ombay MBest Cor/or"te So,%"+ Res/ons%$%+%t1 Pr",t%,eM A)"r* +tock 0 change and *asscom .oundationJs #usiness !or +ocial 6esponsibility $wards %??< 9utlook Money M Best B"n# A)"r* %n t(e Pr%2"te se,tor ,"te&or1. *(TO Pro!it The $sian #anker Best Ret"%+ B"n# %n In*%" 0 cellence in 6etail .inancial +ervices $wards $sian #anker O0r M"n"&%n& D%re,tor A*%t1" P0r% )%ns t(e Le"*ers(%/ A,(%e2e-ent A)"r* 'or In*%"

72

Cre*%t R"t%n& !

H(./ #ank has its deposit programmes rated by two rating agencies ' /redit $nalysis M 6esearch 4imited. ,/$60- and .itch 6atings India Private 4imited. The bankJs .i ed (eposit programme has been rated J/$60 $$$ ,.(-J HTriple $I by /$60, which represents instruments considered to be Co! the best &uality, carrying negligible investment riskC.

/$60 has also rated the bankJs /erti!icate o! (eposit ,/(- programme CP6 3SC which represents Csuperior capacity !or repayment o! short term promissory obligationsC. .itch 6atings India Pvt. 4td. ,3??N subsidiary o! .itch Inc.- has assigned the Ct$$$ , ind -C rating to the bankJs deposit programme, with the outlook on the rating as CstableC. This rating indicates Chighest credit &ualityC where Cprotection !actors are very highC.

H(./ #ank also has its long term unsecured, subordinated ,Tier II- #onds o! 6s.8 billion rated by /$60 and .itch 6atings India Private 4imited. /$60 has assigned the rating o! C/$60 $$$C !or the Tier II #onds while .itch 6atings India Pvt. 4td. has assigned the rating C$$$, ind -C with the outlook on the rating as CstableC. In each o! the cases re!erred to above, the ratings awarded were the highest assigned by the rating agency !or those instruments.

73

Person"+ Lo"n Po+%,%es

Person"+ Lo"n Fe"t0res I Bene'%ts !

3. #orrow up to 6s 3:,??,??? !or any purpose depending on your re&uirements. %. .le ible 6epayment options, ranging !rom 3% to ;? months. 5. 6epay with easy 0MIs. 8. 9ne o! the lowest interest rates. :. Hassle !ree loans ' *o guarantor1security1collateral re&uired. ;. +peedy loan approval. <. /onvenience o! service at your doorstep =. C0sto-er /r%2%+e&es

I! you are an H(./ #ank s"+"r1 ",,o0nt (o+*er, we have a special o!!er !or you I! you are an e isting A0to Lo"n ,0sto-er with a clear repayment o! 3% months or more !rom any o! our approved !inanciers or us, you can get a ("ss+e 'ree /erson"+ +o"n 9)%t(o0t %n,o-e *o,0-ent"t%onE. I! you are an e isting H(./ #ank Person"+ Lo"n ,0sto-er with a clear repayment o! 3% months or more, we can To/!U/ 1o0r /erson"+ +o"n.

74

E+%&%$%+%t1 Cr%ter%"2' Minimum age o! $pplicant2 %3 years Ma imum age o! $pplicant at loan maturity2 ;? years Minimum employment2 Minimum % years in employment and minimum 3 year in the current organi"ation

Minimum *et Monthly Income2 6s. 3?,??? per month ,6s. 3:,??? in Mumbai, (elhi, #angalore, /hennai and Hyderabad M 6s. 3%,??? in /alcutta, $hmedabad and /ochin-

Do,0-ents re30%re* !

Proo! o! Identity ,Passport /opy1 Ooters I( card1 (riving 4icence$ddress Proo! ,6ation card Tel10lect. #ill1 6ental agr. 1 Passport copy1Trade licence 10st.1+ales Ta certi!icate#ank +tatements ,latest 5 months bank statement 1 ; months bank passbook4atest salary slip or current dated salary certi!icate with latest .orm 3;

75

Fees I C("r&es 'or Person"+ Lo"n

Des,r%/t%on o' C("r&es 4oan Processing /harges

Person"+ Lo"n 7pto %N o! the loan amount

Prepayment ,upto ; months o! availing *o pre'payment permitted loanPre'payment charges,a!ter ; months o! 8N o! the Principal 9utstanding availing loan*o (ue /erti!icate 1 *o 9bjection *I4 /erti!icate ,*9/(uplicate no due certi!icate 1 *9/ +olvency /erti!icate /harges !or late payment o! 0MI 6s %:?1' *ot applicable V %8 N p.a on amount outstanding !rom date o! de!ault

/harges !or changing !rom !i ed to *ot applicable !loating rate o! interest /harges !or changing !rom !loating to *ot applicable !i ed rate o! interest +tamp (uty M other statutory charges /redit assessment charges *on standard repayment charges /he&ue swapping charges 4oan 6e'booking scheduling charges charges 1 6e' $s per applicable laws o! the state *ot applicable *ot applicable 6s :??1' per event 6s 3???1' 6s. 3???1' 6s 8:?1' per che&ue bounce statement-1 6s :??1' $t actual

4oan cancellation charges /he&ue #ounce /harges +tatement /harges ,per 6epayment +chedule 4egal 1 incidental charges

76

FAJs ! 3. I! you have any &ueries that are not answered here, please call us or )rite to us. %. )hat are the bene!its o! having a +alary $ccount !or my personal loanU 5. How much loan can I avail o!U 8. How do I repay my Personal loanU :. )hat security do I need to provide to obtain this loanU ;. )hat are the loan tenure optionsU <. How long will it take !or me to get my loanU =. /an I repay the loan earlierU >. How do I get a Personal 4oanU

77

METHODOLOGY OF THE STUDY

Rese"r,( Met(o*o+o&1 6esearch as a mean o! getting knowledge can be carried out either arbitrarily or in a systematic !ashion. It is a purposive investigation. 6esearch may be a mean to know the small change and time !orced upon us as individual or as a society. 6esearch as process involves de!ining the problem, !ormulating the hypothesis, organi"ing and evaluating the data, deriving in!erence and conclusion a!ter care!ul testing.

D"t" Co++e,t%on $s data is re&uired !or any research activity, it is collected ,!or those both the Primary and +econdary- as !ollows2

Pr%-"r1 D"t" I have collected this data through &uestionnaire.

Se,on*"r1 D"t" This data is collected !rom di!!erent sources available consolidated !rom book publication reports, websites where used as a source o! secondary data in order to do this project and to collect necessary data. I have used the manuals and lea!lets o! the H(./ M +.#.I bank.

78

T%t+e o' t(e st0*1 ! NCo-/"r"t%2e An"+1s%s o' SBI I HDFC B"n# Re&"r*%n& Person"+ Lo"nO

D0r"t%on o' t(e St0*1 ! 5? day !rom 3st May to 5?th May

O$7e,t%2e o' st0*1 Pr%-"r1 ! 3. $nalysis and evaluation o! customer s satis!action with respect to personal loan per!ormance. %. To determine the main characteristic which customers look upon while taking personal loanU 5. To determine the other bank those are competing with the same product rang in personal loan.

Se,on*"r1 ! 3. +ervice level and channel associate approach. %. To !ind the level o! brand awareness. 5. To !ind out the company market share.

79

T1/es o' rese"r,( ! (escriptive research Pr%-"r1 *"t" ,o++e,t%on Through Tuestionnaire are !illed by respondents. Se,on*"r1 *"t" ,o++e,t%on (ata collection through K Internet, Maga"ines. S"-/+e s%5e I Met(o* o' se+e,t%n& s"-/+e S"-/+e s%5e'2 Met(o* o' se+e,t%n& s"-/+e2' !rom each bank %?? respondents /onvenience sampling , 3?? customer

S,o/e o' st0*1 i. +pecial area to be !ocused !or increasing the sales and !or sales promotion activities to be adopted. ii. iii. To make product more innovative and easy to understand .or providing ma imum satis!action to the customer by knowing their needs and re&uirement about product and services. iv. +teps to be taken at present !or survival and !acing the competition with other e&uivalent product. v. vi. /ontinues improvement and !or better management. Maintaining good relation between manager and customer.

L%-%t"t%ons o' t(e st0*1

. 8. The study was limited only Aaipur city Hence !indings may be di!!er !rom other part o! country. :. Many !ormalities and re&uirements during process o! taking personal loan. :.. Many times respondents were so busy that they didnt t give reply. There were biased replies also.

FACTS AND FINDINGS 81

3. 8:N customers are pre!er the +#I #ank when taking personal loan and only 5?N customers pre!er H(./ #ank. %. .amily members are creating more e!!ect on decisions regarding personal loan. 5. Interest rate is main !actor consider by customers when taking loan. 8. Most o! the customer pre!ers the repayment o! loan in higher duration. :. Most o! the customers consider the policies o! bank regarding personal loan. ;. :? N customers give the higher rating to +#I #ank. <. In H(./ #ank only 5? N customers give the higher rating to H(./ #ank =9nly governments employees are pre!er the +#I #ank. >. +imilarly sel! employed M businessmans are pre!er the H(./ #ank. 3? 4ow income class people !ace di!!iculty to taking personal loan

ANALYSIS AND INTERPRETATION S"-/+e s%5e :>> J.: T1/e o' ,0sto-ers. 82

"E $E ,E *E

B0s%ness-"n Se+' e-/+o1e* 8or#%n& /ro'ess%on"+ Go2t.ser2%,e e-/+o1ee

SBI := => =C A>

HDFC => => @< =<

8: 8? 5: 5? %: %? 3: 3? : ? businessman sel! employed abworking govt.service pro!essional employee cd+#I H(./

Inter/ret"t%on ! $s per the study the govt. employees are main customers o! +#I bank and businessman are less minimum. 9n the other side working pro!essional are main customers o! H(./ bank.

J.= B"n# /re'eren,e 'or /erson"+ +o"n.

"E $E

HDFC SBI

@> A< 83

,E

OTHERS

=<

9 T H0 6 + %:N

H( . / 5?N H( . / +#I 9 T H06 +

+#I 8:N

Inter/ret"t%on ! Ma imum number o! customers pre!er +#I bank !or taking personal loan compare to H(./ bank bco" o! low interest rate, good image, and public sector bank. %:N customers pre!er other bank like I/I/I, P*#, and #ank o! #road.

J.@ So0rs o' ,o--0n%,"t%on 9Fro- )(ere ,0sto-ers &et t(e In'or-"t%on "$o0t $"n#E.

"E $E ,E *E

A*2ert%se-ent Fr%en* F"-%+1 -e-$er Ot(ers 84

@> =< @< :>

9 thers d3?N

$ dvertis em ent a5?N

a- $ dvertis em ent b- .riend c - .am ily m em ber d- 9 thers

.am ily m em ber c5:N . riend b%:N

Inter/ret"t%on ! $s per as my the study the !amily members are the main sources o! /ommunication about bank and advertisement is other sources. .amily members in!luence the decision related to taking personal loan.

J.A F",tors ,ons%*er $1 ,0sto-ers )(%+e t"#%n& +o"n.

"E $E ,E

Interest r"te S,(e-e D0r"t%on

?> => C 85

*E

Ot(ers

9thers d%N (uration c=N +cheme b%?N Interest rate a<?N a- Interest rate b- +cheme c- (uration d- 9thers

Inter/ret"t%on ! )hen any customers planning !or taking personal loan !rom any bank they mainly consider the interest rate o! the particular bank and they give second pre!erence to duration M schemes.

T.: 4oan duration pre!erred by customers.

"E $E ,E *E

= 1e"rs @ 1e"rs A 1e"rs More t("n 1e"rs

:= =C =A < 86 @B

m ore than : y ers d5;N

% y ers a3%N a- % y ers 5 y ers b%=N 8 y ers c%8N b- 5 y ers c - 8 y ers d- m ore than : y ers

Inter/ret"t%on ! Ma imum customers pre!er the more than : years duration !or personal loan because o! long duration monthly installment can be a!!ordable by the customers.

T.; /onsideration on policies o! bank regarding personal loan by customers.

"E

YES

?= 87

$E

NO

=C

*9 b%=N

a- Q0+ b- *9 Q0+ a<%N

Inter/ret"t%on ! $s per the my study when any customers planning !or taking personal loan they consider the policies o! bank regarding personal /ustomers want to about the all !ormalities and close related with loan process.

J.? R"t%n& o' HDFC $"n#. "E $E ,E *E Goo* Ver1 &oo* A2er"&e Be+o) "2er"&e AA @> 88 =B >

b e lo w a ve ra g e a ve ra g e d ?N c%;N good a88N a- good b - ve ry g o o d c - a ve ra g e d - b e lo w a ve ra g e ve ry g o o d b5?N

Inter/ret"t%on ! $ccording to my study <:N customers are agree that H(./ bank is very good M good because o! good services, more numbers o! scheme.

T.= 6ating the +#I bank. "E $E ,E *E Goo* Ver1 &oo* A2er"&e Be+o) "2er"&e <> A> 89 :> >

average c3?N

below average d?N good a:?N a- good b- very good c- average d- below average

very good b8?N

Inter/ret"t%on ! >?N o! customers agree that +#I bank is very good M good. because o! good image, public sector bank, low interest rate. /ompression to H(./ bank more customers agree that +#I bank is very good.

J.; O2er "++ /re'eren,e on t(e $"s%s o' %nterest r"te6 %-"&e "n* s,(e-e. 9

"E $E

HDFC SBI

@< B<

H( ./ a5:N a- H ( ./ b- +#I +#I b;:N

Inter/ret"t%on ! ;:N o! customers pre!er the +#I bank and 5: N pre!er H(./ bank on the basis o! interest rate, image and schemes. The main reason is that the +#I bank is public sector bank so customers trust on +#I bank more than H(./ bank.

91

J.:> Co--ent on $"n# 'or-"+%t%es re&"r*%n& to /erson"+ +o"n.

Inter/ret"t%on ! Ma imum numbers o! customers give the comment that the bank !ormalities should be reduce. They agree that the bank !ormalities are very struck so it must be easy. +ome o! the comments are !ollows 3. 6educe the loan !ormalities. %. #ank !ormalities are very high.

92

S8OT ANALYSIS Stren&t(s ! Br"n* N"-e ! +#I #ank has earned a reputation in the market over the period o! time,#eing the oldest bank in India tracing history back to 3=?;M"r#et Le"*er2' +#I is ranked at 5=? in %??= .ortune @lobal :?? list, and ranked %3> in %??= .orbes @lobal %???. )ith an asset base o! R3%; billion and its reach, it is a regional banking behemoth. )ide (istribution *etwork2 0 cellent penetration in the country with more than 3???? core branches and more than :3?? branches o! associate banks ,subsidiaries-. D%2ers%'%e* Port'o+%o +#I #ank has all the products under its belt, which help it to e tend the relationship with e isting customers #ank has umbrella o! products to o!!er their customers, i! once customer has relationship with the bank. +ome Products, which +#I #ank is o!!ering are2 6etail #anking #usiness #anking Merchant 0stablishment +ervices ,0(/ Machine- Personal loans M /ar loans Insurance Housing 4oans Go2ern-ent O)ne*2' @overnment owns ;?N stake in +#I. This gives +#I an edge over private banks in terms o! customer security. 4ow Transition /osts'+#I o!!ers very low transition costs which attracts small customers.

8e"#nesses ! 93

3. The e isting hierarchical management structure o! the bank, although strength in some respects, is a barrier to change. %. Though +#I cards are the %nd largest player in the credit card industry, it has the highest non per!orming assets ,*P$s- in the industry, which stand out to be at 3;.%= N ,(ec %??<-. 5. Modernisation2 +#I lags with respect to private players in terms o! modernisation o! its processes, in!rastructure, centralisation, etc.

O//ort0n%t%es ! 3. Merger o! associate banks with +#I2 Merger o! all the associate banks ,like

+#H, +#M, etc- into +#I will create a mega bank which streamlines operations and unlocks value. %. Planning to add %??? branches and 5??? $TMs in %??='%??>. This will reach.

!urther increase its 5.

Increasing trade and business relations and a large number o! e patriate

populations o!!ers a great opportunity to e pand on !oreign soil.

Threats:-

94

3.

$dvent o! M*/ banks2 4arge numbers o! M*/ banks are mushrooming in

the Indian market due to the !riendly policies adopted by the government. This can increase the level o! competition and prove a potential threat !or the market share o! +#I bank. % /onsumer e pectations have increased many !olds in last !ew years and

the bank has not been responsive enough to meet them on time. 5 Private banks have started venturing into the rural and semi'urban sector,

which used to be the bastion o! the +tate #ank and other P+7 banks 8. 0mployee +trike2 There was an employee strike in the year %??; which

disrupted +#Is activities. This can be repeated in the !uture.

S8OT ANALYSIS OF SBI BANK

95

STRENGTH #6$*( *$M0 M$6B0T 40$(06 @9O06*M0*T 9)*0(. (IO06+I.I0( P96T.94I9

8EAKNESSES 40++ M9(06*I+$TI9* HI@H06 *P$ /7+T9M06 H$O0 *9T .744

I*.96M$TI9* $#97T @0TTI*@ .$/I4ITI0+

OPPURTUNITIES HI@H $PP69/H 9. $TM %??? #6$*/H0+ /9MI*@ 9* O$6I97+ 49/$TI9* M06@0( )ITH #$*B $++9/IT0(

THREAT 0MP49Q00 +T6IB0 9TH06 *$TI9*$4IW0( #$*B

$*( P6IO$T0 #$*B+ $(O0*T 9. M*/ #$*B

S8OT ANALYSIS OF HDFC BANK

96

STRENGTH +0@M0*T$TI9* P69(7/T .0$T760+ )96B 0*OI69*M0*T 49) (9/7M0*T$TI9*

8EAKNESSES TIMI*@ +H96T M$I*T0*$*/0 /H$6@0+ HI@H HI@H I*T060+T 6$T0 /7+T9M06 H$O0 *9T .744

I*.96M$TI9* $#97T @0TTI*@ .$/I4ITI0+ OPPURTUNITIES M06@0( #$*B 35?? #6$*/H0+ /9MI*@ 9* O$6I97+ 49/$TI9* *$M0 $*( 49@9 )I44 #0 *0) )ITH /0*T76I$* THREAT +#I #$*B 9TH06 P6IO$T0 #$*B

,I/I/I,$X+I+ etc-

CONCLUSION Are"s %n Rese"r,( ! In my report I have tried to show the basic di!!erent between the Personal 4oan o! H(./ M +#I #anks. #oth the #anks are good in terms o! customer satis!actions has an edge because it is the leading @overnment regulated bank in India. H(./ is new to this segment ,when compared to +#I- .+#I is 97

pre!erred because its a government bank. Procedure o! loan !inancing is easy in H(./ #ank. .amily members M increasing standard o! living plays an important role in in!luencing the decision o! taking home loan.

3. +#I #ank is 4eading #ank in the country, it provides a variety o! products and services to di!!erent segments o! customers. %. The #ank aims to serve customers !rom teenagers to senior citi"ens, hence di!!erent products designed to suit speci!ic re&uirements o! the above. 5. $ims to serve all classes o! the society !rom the salaried middle class to the high income business class. /ustomers are categori"ed and segmented according to their re&uirements and needs. .or 0 ample , the +aving 6egular and Plus $ccount aims to serve middle class customers so minimum balance re&uired to be maintained is 6+.:,???1' or 6+. 3????. )hile the +aving Ma $ccount is targeted at high income customers, the minimum balance re&uirement is 6+.%:,???. 8. +#I #ank provides personal loan at low interest rate which good !or customers. :. The #ank prides itsel! with the ability to provide di!!erentiate products in the crowed market o! saving accounts. #ank o!!ers !ree insurance, special co'branded debit cards which makes its product uni&ue. APPENDIX Person"+ Det"%+s2 *ame2 ' YYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYY $ddress2 YYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYY 98 '

YYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYY YYYY $ge2 ' YYYYYYYYYYYYYYYYYY 9:E Pro'%+e o' res/on*ent ,a- #usinessman ,c- )orking pro!essional ,b- +el! employed ,d- @overnment +ervice 0mployee contact no2 ' YYYYYYYYYYYYYYYYYY

9=E 8(%,( $"n# )o0+* 1o0 /re'er 'or /erson"+ +o"nP ,a- H(./ #ank ,b- +#I #ank ,c- 9thers 9@E 8("t -"#e 1o0 $e+%e2e to t"#e t(e /erson"+ +o"n 'ro- "n1 /"rt%,0+"r $"n#P ,a- $dvertisement ,c- .amily member ,b- !riend ,d- others

9AE 8("t )%++ 1o0 ,ons%*er )(%+e t"#%n& +o"nP ,a- Interest rate ,c- (uration ,b- scheme ,d- others

9<E For )("t t%-e %nter2"+ 1o0 ("2e t"#en +o"nP ,$- 3'% years ,c- 5'8 years ,b- %'5 years ,d- more than 8 years

99

9BE.Do 1o0 '0++1 ,ons%*er t(e /o+%,%es o' t(e $"n# re&"r*%n& /erson"+ +o"n P)(en t"#%n& +o"n. ,a- Qes ,b- no

9?E.R"te t(e (*', $"n# "-on& 'o++o)%n& on t(e $"s%s o' $"n# s,(e-e "n* ser2%,esP ,a- @ood ,b- very good ,c- average ,d- below average

,CE.R"te t(e s$% $"n# "-on& 'o++o)%n& on t(e $"s%s o' $"n# s,(e-e "n* ser2%,esP ,a- @ood average ,b- very good ,c- average ,d- below

9;E.Ho) )%++ 1o0 see t(e 'or-"+%t%es o' t(e $"n# )(%+e t"#%n& t(e /erson"+ +o"nP Co--ent

,:>E On t(e $"s%s o' %nterest r"te6 ser2%,es6 %-"&e6 s,(e-e. 8(%,( $"n# 1o0 /re'er HDFC I SBI "n* )(1P

BIBLIOGRAPHY

MAGA4INES 1

#usiness world #usiness today

NE8SPAPER 0conomic times Times o! India The Hindu

8EBSITES www.hd!cbank.com www.sbibank.com www.google.com

KNO8LEDGE THROUGH T.V. ! )atched $ds o! #oth the #anks, they helped us in Bnowing about the banks M raised our interest in the topic. This $ds were the !irst source o! in!ormation about the banks. They helped in choosing the topic.

TELEVISION *(TO P69.IT W00 #7+I*0++ TIM0+ *9) I#*<

1 1