Organization Strcture

Organizational Study
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1.1Executive Summary
The Course of MFA Offered by Bangalore City College, Bangalore has its syllabus affiliated to Bangalore University which requires its students to undertake any internship with any of the leading business organization for a period of 4 weeks for the 3rd semester. The purpose of this internship is to enable the students to appreciate and understand the practical business the application theoretical input administered during regular academic session. This help in creating managers who are well equipped with the experience of linking the theoretical inputs with those of practical environment. In a partial fulfillment of MFA degree of Bangalore University. I undertook the internship in Karnataka Bank Limited relating Organizational Study. The experience of these four weeks was really a great exposure in the business world. I have learned a lot regarding the working of banks related to mentoring and notice various problems which they face and strategies used to overcome them during mentoring period. It was really great working with this prestigious organization of Karnataka Bank Limited.
1.2Title of report
Organizational Study of Karnataka Bank Limited.
1.3Objectives of the Study

To get practical exposure of an organization. To get acquainted with the real working environment of the organization. To get an overall idea about the industry and in depth comprehension of the firm selected for extensive study. To study the organization Structure of Karnataka Bank Limited To know and analyze the strength and weakness of the organization and the forthcoming opportunities and threats of it. To suggest to the bank on the areas of improvement, based on findings of the study.
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1.4Scope of the Study

The study provides an overview of Indian banking industry. The study gives a detailed picture of Karnataka bank limited its history, structure, functional departments and other aspects. The study identifies various products and services offered by Karnataka Bank Limited. The study states the various strengths, weakness, opportunities and threats of the bank. The study identifies various findings and provides suggestions for the improvement of the bank.
1.5Data Collection Primary data collection technique

Discussions with the Regional Manager Discussions with the Employees in regional office
Secondary data collection. Annual reports of the company Company website Books 1.6Limitation of the study
Extensive interaction with the officers would not be possible as they will be busy with banking activities. The study is very specific to Karnataka bank Ltd. Hence we could not compare this study with other similar banks. Due to the shortage of time and other constraints financial analysis of the bank was not considered. Primary data is collected as per knowledge of the executives and employees. Due to the limited period, study was a brief one and other banks were in the industry were taken into consideration.
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2. Industry Profile
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2.1Introduction
A bank is a financial institution that provides banking and other financial services to their customers. A bank is generally understood as an institution which provides fundamental banking services such as accepting deposits and providing loans. There are also nonbanking institutions that provide certain banking services without meeting the legal definition of a bank. Banks are a subset of the financial services industry. A banking system also referred as a system provided by the bank which offers cash management services for customers, reporting the transactions of their accounts and portfolios, throughout the day. The banking system in India should not only be hassle free but it should be able to meet the new challenges posed by the technology and any other external and internal factors. For the past three decades, Indias banking system has several outstanding achievements to its credit. The Banks are the main participants of the financial system in India. The Banking sector offers several facilities and opportunities to their customers. All the banks safeguards the money and valuables and provide loans, credit, and payment services, such as checking accounts, money orders, and cashiers cheques. The banks also offer investment and insurance products. As a variety of models for cooperation and integration among finance industries have emerged, some of the traditional distinctions between banks, insurance companies, and securities firms have diminished. In spite of these changes, banks continue to maintain and perform their primary roleaccepting deposits and lending funds from these deposits.
2.2Need of the Banks

Before the establishment of banks, the financial activities were handled by money lenders and individuals. At that time the interest rates were very high. Again there were no security of public savings and no uniformity regarding loans. So as to overcome such problems the organized banking sector was established, which was fully regulated by the government. The organized banking sector works within the financial system to provide loans, accept deposits and provide other services to their customers.
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Organizational Study The following functions of the bank explain the need of the bank and its importance: To provide the security to the savings of customers. To control the supply of money and credit To encourage public confidence in the working of the financial system, increase savings speedily and efficiently. To avoid focus of financial powers in the hands of a few individuals and institutions. To set equal norms and conditions (i.e. rate of interest, period of lending etc.) to all types of customers.
2.3History of Indian Banking System

The first bank in India, called The General Bank of India was established in the year 1786. The East India Company established The Bank of Bengal/Calcutta (1809), Bank of Bombay (1840) and Bank of Madras (1843). The next bank was Bank of Hindustan which was established in 1870. These three individual units (Bank of Calcutta, Bank of Bombay, and Bank of Madras) were called as Presidency Banks. Allahabad Bank which was established in 1865, was for the first time completely run by Indians. Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. In 1921, all presidency banks were amalgamated to form the Imperial Bank of India which was run by European Shareholders. After that the Reserve Bank of India was established in April 1935. At the time of first phase the growth of banking sector was very slow. Between 1913 and 1948 there were approximately 1100 small banks in India. To streamline the functioning and activities of commercial banks, the Government of India came up with the Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No.23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as a Central Banking Authority. After independence, Government has taken most important steps in regard of Indian Banking Sector reforms. In 1955, the Imperial Bank of India was nationalized and was given the name "State Bank of India", to act as the principal agent of RBI and to handle banking transactions all over the country. It was established under State Bank of India Act, 1955. Seven banks forming subsidiary of State Bank of India was nationalized in 1960. On 19th July, 1969, major process of nationalization was carried out. At the same time 14 major Indian commercial banks of the country were nationalized. In 1980, another six banks were Page 6
Organizational Study nationalized, and thus raising the number of nationalized banks to 20. Seven more banks were nationalized with deposits over 200 Crores. Till the year 1980 approximately 80% of the banking segment in India was under governments ownership. On the suggestions of Narsimhan Committee, the Banking Regulation Act was amended in 1993 and thus the gates for the new private sector banks were opened.
2.4Important Milestones of the Banking Industry
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2.5Nationalization
Despite the provisions, control and regulations of Reserve Bank of India, banks in India except the State Bank of India or SBI, continued to be owned and operated by private persons. By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy. At the same time, it had emerged as a large employer, and a debate had ensued about the nationalization of the banking industry. Indira Gandhi, the then Prime Minister of India, expressed the intention of the Government of India in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalization." The meeting received the paper with enthusiasm. Thereafter, her move was swift and sudden. The Government of India issued an ordinance ('Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969') and nationalized the 14 largest commercial banks with effect from the midnight of 19 July 1969. These banks contained 85 percent of bank deposits in the country. Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August 1969. A second step of nationalization of 6 more commercial banks followed in 1980. The stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the Government of India controlled around 91% of the banking business of India. Later on, in the year 1993, the government merged New Bank of India with Punjab National Bank. It was the only merger between nationalized banks and resulted in the reduction of the number of nationalized banks from 20 to 19. After this, until the 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy. The nationalized banks were credited by some including Home Minister P. Chidambaram, to have helped the Indian economy withstand the global financial crisis of 2007-2009.
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2.6Liberalization
In the early 1990s, the then government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce, UTI Bank (since renamed Axis Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, revitalized the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been set up with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%,at present it has gone up to 74% with some restrictions. The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 464 method (Borrow at 4%, Lend at 6%, Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this led to the retail boom in India. People not just demanded more from their banks but also received more. In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be voted by them.
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2.7Structure of the Financial Sector in India
2.8Who regulates the Financial Sector in India?
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2.9Structure of the Indian Banking Industry
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2.10Major Players in the Banking Industry

List of Public Sector Banks in India
Allahabad Bank Bank of India Central Bank of India Indian Bank Punjab & Sind Bank UCO Bank Vijaya Bank Andhra Bank Bank of Maharashtra Corporation Bank Indian Overseas Bank Punjab National Bank Union Bank of India IDBI Bank Limited Bank of Baroda Canara Bank Dena Bank Oriental Bank of Commerce Syndicate Bank United Bank Of India (UBI)
List of State Bank Group Banks in India

State Bank of India State Bank of Mysore State Bank Of Bikaner & Jaipur State Bank of Patiala State Bank of Hyderabad State Bank of Travancore
List of Private Sector Banks in India

Catholic Syrian Bank Federal Bank Karnataka Bank Ltd The Ratnakar Bank South India Bank IndusInd Bank Axis Bank Development Credit Bank (DCB Bank) City Union Bank ING Vysya Bank Ltd Karur Vysya Bank Ltd Nanital Bank Tamilnadu Mercantile Bank HDFC Bank Kotak Mahindra Bank Dhanalakshmi Bank Ltd Jammu & Kashmir Bank Lakshmi Vilas Bank SBI Commercial & International Bank United Western Bank ICICI Bank Yes Bank
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List of Foreign Banks operating in India

ABN-AMRO Bank NV ANZ Grind lays Bank Bank Muscat Saog Bank Of Ceylon Barclays Bank PLC Cho Hung Bank Credit Agricole Indosuez Development Bank Of Singapore KBC Bank NV Oversea-Chinese Banking Corporation Sonali Bank State Bank Of Mauritius The Fuji Bank American Express Bank Arab Bangladesh Bank Bank Of America NV Bank Of Nova Scotia BNP Paribas Citi Bank Credit Lyonnais HSBC Krung Thai Bank Public Co The Sanwa Bank Standard Chartered Bank The Sumitomo Bank The Sakura Bank Abu Dhabi Commercial Bank Bank International Bank Bank Of Bahrain & Kuwait BSC Bank Of Tokyo-Mitsubish China Trust Commercial Bank Commerz Bank AG Deutsche Bank AG ING Bank NV Mashreq Bank Societe Generale Standard Chartered Grind lays Bank The Chase Manhattan Bank The Toronto-Dominion Bank
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2.11Growth Drivers of the Banking Industry
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2.12Key Challenges of the Banking Industry
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2.13The Banking Outlook in 2013 & 2014

Paving the way for New Banks
With the Banking laws (Amendment) Bill cleared on 20th December 2012 in RajyaSabha, it is likely that the RBI may issue 3-4 licenses within the next 12 months. NBFCs like PFC, L&T finance, Shriram group as well as some corporate groups (Reliance, Tata etc.) have applied for the banking licenses. New Entrants in the space may result in price based competition on deposits, loans and human resources and some M&A among the small private banks.
Sparking M&A hopes

Entry of New banks, with the issuance of banking licenses has sparked the hope for M&A. In order to scale up operations rapidly, smaller private banks with larger distribution networks might be the possible targets of the new banks. The potential targets may be Federal Bank, Karur Bank, Dhanalaxmi Bank, Lakshmi Vilas Bank.
Opportunities in the Banking
Wealth Management to be a big business

Rapid growth of branches & ATMs Mobile banking to see huge growth Mortgages to cross Rs.40 lakh crores by 2020 Infrastructure financing to reach over Rs.20 trillion on Commercial banks book by 2020 New Models to serve the Small & Medium Enterprises (SME)
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3. Company Profile
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3.1Overview of the Bank
Type: Industry: Founded:
Private BSE & NSE: Karnataka Bank, Banking 1924 (as The Karnataka Bank Limited) Karnataka Bank Ltd., Mahaveera Circle, Kankanady, Mangalore, India Loans, Credit Cards, Savings, Investment vehicles USD Rs.31,693.01 crore www.karnatakabank.com
Headquarters:
Products: Revenue: Total assets: Website:
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3.2Background and Inception of the Bank

Karnataka Bank Ltd, a leading A Class scheduled commercial Bank in India, was incorporated on Feb 18th 1924 with a registered office at Mangalore. The Bank commenced its business on 23rd May 1924 with an Initial Paid up Capital of Rs.11, 580 contributed by113shareholders.Sri.B.R.Vyasaraya Achar was the first president of the Bank. The Banks Memorandum of Association in its Objective Clause states that the Bank apart from carrying on the general function of Banking business, would set apart and appropriate from the annual net profit towards the general, mental, moral and physical advancement of other beneficial purpose of the members of the Dravidian Brahmin community, Such sums as may be deemed fit. The first three branches of the Bank were at Mangalore Dongerkery, Madras George, and Udupi Car Street. Sri Kalmadi Gopal Krishna had the distinguish ion of becoming the first Branch Manager. At the end of the Banks first year of operations the Banks deposits stood at Rs. 0.68Lakhs and advances were Rs. 1.22 Lakhs. The Bank celebrated its Silver Jubilee in the year 1949 in its Silver Jubilee year of operation the Bank earned a net profit of Rs. 0.75 Lakhs with deposits of Rs.55.59 Lakhs and Advances of Rs. 39.39 lakhs. Sri.K.S.N.Adiga became the chairman of the Bank on 23rd Nov 1958. The First real recognition for the Mangalore based Bank came in the year 1959 with the Bank being elevated from C class to B Class. In the stride of progress and expansion, the Bank got reinforced by the takeover of 3 banks namely Shringeri Sharada Bank Ltd on 1st April1960.,Chitradurga Bank Ltd on December 30th 1964, and Bank of Karnataka Ltd on Dec 29th 1966.,. In the year 1969 the Bank opened its 75th branch where its deposits crossed Rs. 10 Crore mark to reach Rs. 12.63 Crores, Advances were at Rs. 8.90 Crore and Net profits were Rs. 3.05 Lakhs. In year 1971 the Bank opened its first branch in the countrys financial capital. The following year the Bank was elevated to A class by the Reserve Bank of India. In its Golden Jubilee year of its operation the Banks total deposits were Rs. 33.14 Crores and Advances were Rs.22.09 Crore with 146 branches and 126 employees. In 1977 Karnataka Bank Ltd., adopted the star symbol as its unique Page 19
Organizational Study visual identity symbol. A product of Late Dr. Shivarama Karanth, it symbolizes stability, discipline, harmony and confidence. The Staff Training College of the Bank was started at Mangalore Dongerkery on Sept 27th 1977.
In 1977 the foreign exchange Business of the Bank was opened with a separate department was established In Bangalore as central foreign exchange department which was later shifted to Mumbai(1979). The Bank achieved the target of Rs. 100 crores mark in deposits with the aggregate deposits being Rs. 104.24 crores as on 31-12-1979. In 1980 the Madras George Town Branch celebrated its golden jubilee. In the diamond jubilee year of the Bank, the deposits of the bank were Rs. 211.34 Crores and Advances was Rs. 122.22 crores respectively. In 1989 the Banking year was extended from 12 months to 15 months to end on 31st March. The Banks Mumbai Borivili branch was declared as the first Model Branch of the Bank. In 1994-95 the first service branch was opened At Mumbai. The first Industrial Finance Branch was also opened at Bangalore on 20th March 1995.The first Agricultural Development Branch of the Bank was opened on 1stApril 1995. The Bank made it into the stock markets on October 1995 with a public issue of Rs. 81 crores which was oversubscribed by about 2.5 times despite depressed market condition During the year 2003, the Bank has taken up corporate agency for marketing the various life policies of Met Life India Insurance Company Ltd.it has also taken up corporate agency of Bajaj Allianz General Insurance Co.Ltd for marketing general insurance products. The banks all round excellence in the twin parameters of growth and stability has earned it rich laurels in the form of P1+ rating for certificate of deposits from CRISIL.
3.3Nature of the Business Carried

In the words of Late Shri T.A.Pai Some people believe that Banking means money lending and that a Banker is not but a glorified Money lender. But Banking is not money-lending as money lender does not take the risk whereas the Banker does. Bank is into pooling together the savings of the community scattered all over and from the very same pool granting loans to the needy in the society. Thus it acts as a link between the savers and the needy. Thus the two main products of the Bank are Deposits and Loans.
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3.4History & Evolution
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Organizational Study Incorporatedin1924, Karnataka Bank is one of the oldest time tested private sector Banks. Offers wide variety of corporate and retail banking products and services to over 7.2million customers. Forayed into General Insurance business as a JV partner in Universal Sompo General Insurance Company Limited. 1,089 service outlets with 556 branches,4 Extension Counters and 529 ATMs in 360 centers across India as on June30,2013. Business Turnover of`78,000 crore as of August 2013.
3.5India Presence
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3.6Vision, Mission, and Quality Policy

Vision
We believe in total quality at all levels. We are aiming at a total value package, a one-stop shop for all your banking needs. Our motto is to serve you with high standard professionalism with a personal touch built on trust. After all, this is your bank. your family bank. Across INDIA
Mission
The Mission statement of any organization generally represents its long term goals and strategies. Every organization must have its own mission, which describes present business scope of the organization. The mission statement of Karnataka Bank Ltd. is as follows. To be a technology savvy, customer centric progressive bank with national presence, driven by the highest standards of corporate governance and guided by sound ethical values.
Quality Policy
The Quality policy of Karnataka Bank Ltd is of providing Quick and Better service and their by achieving Customer Satisfaction.
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3.7Financial Performance
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3.8Shareholders Value
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3.9Awards
Best bank award for managing IT risks and Best bank award for use of IT for business innovation for 2012-13 among small banks category. Karnataka Bank Ltd has won two IDRBT Banking Technology Excellence awards. D Subba Rao, Governor, Reserve Bank of India presented the awards at a function held at Institute for Development and Research in Banking Technology, Hyderabad. Bank bags two IBA Awards during the current fiscal 2nd Runner-up under Best Financial Inclusion Initiative 2nd Runner-up under Best Risk Management and Facility Initiative Bank has won the Runner-up national award for the BEST BANKER FOR CUSTOMER FRIENDLINESS among the midsized Banks. Bank has been awarded with Operational Excellence Award, instituted by NPCI [National Payment Corporation of India], in recognition of its excellent performance in ATMs and switch connected to NFS [National Financial Switch] ATM Network. The rating symbol,A1+ indicates highest degree of safety for timely payment of principal and interest. CRISIL, Indias top credit rating agency awarded the top P+ to the Banks certificate of deposit programme.
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3.10Recent Activities of KBL

The credit rating agency, ICRA ltd. (ICRA), one of the leading credit rating agencies of the country has accorded A1+ rating to the banks certificate of deposit programme. Karnataka Bank has declared dividend of 40% for the financial year 2012-13 at the 89th Annual General Meeting held on July 06, 2013. The Karnataka Bank is involved in Social activities like Blood donation camp. Encourage social, cultural & educational activities. To protect the interest of all the stakeholders of the Bank. The Karnataka Bank has tied up with Times of Money to offer an internet based online money transfer solution, Remit 2 India, to NRIs on July2, 2013. The Karnataka Bank has entered into a MOU with Reliance Capital Ltd. For financing of MSMEs through co-financing arrangement, on July4, 2013. The Karnataka Bank plans to open another 111 service outlets, including 96 USBs, by the end of March 2014. The Karnataka Bank has the economic survey of Indian banks has accorded the top rank to the bank among all time-tested Indian private banks. The Karnataka Bank is aimed at high growth with superior quality across assets & liabilities portfolio and products & services by Project Tejas. The Karnataka Bank is providing banking services to rural unbanked areas through about 105 outlets, including 26 Ultra Small Branches [USBs]. The bank has registered a jump of 12.87% in its net profit at Rs94.17 crore for first quarter ended June 30, 2013 as compared to Rs83.43 crore for the same quarter in the previous year. Total income of the bank has increased by 21.76% at Rs1203.80 crore for FY14 as compared Rs988.66 crore for the corresponding quarter previous year.
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3.11Photo Gallery of KBL
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4. Product & Service Profile
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4.1Introduction
At Karnataka Bank, They understand that all customers are different in unique ways, which is why, regardless of the size of your business or your aspirations. They treat everyone as individual and special. This means offering you choices, not only in relation to their products and services but also in the way you interact with them. They understand the changes in your lifestyle recognize these changes and support you with a high standard of professionalism and service. As a premier bank, they have developed comprehensive range of customized products & services suitable for every kind of market, trade or perceived need Business or Personal. They include, borrowing facilities, deposits, providing optimum returns on surplus funds or helping with overseas transactions. They believe in total quality at all levels. They have deployed the most modern information technology to deliver products & services for your benefit with an aim to develop an effective long-term relationship. But most of all, Technology is matched to your expectations of service, for today & for the future. Throughout the years, they have focused on one task, one mission - To Give You the Best in Services and In Products. Among other Banks, it was Karnataka Bank who first realized the importance of having a Centralized Banking system and was among the first to deploy the Core Banking System in the year 2000. These systems enabled us to store and process all the customers' accounts from one single place - the Data Centre at Bangalore. To ensure that you have the Best, They have deployed the State-Of-Art technology from the best players in the Industry like Infosys, Sun and Wipro. These systems provide the highest reliability thus enabling us to offer to you Non-Stop services of the highest order. They have taken a lead and implemented a Disaster Recovery Centre. This center will replicate the Banks Centralized Banking system and all its data. This center will also be the backup for the ATM operations. In the event of a natural disaster at Bangalore, this center will immediately come into force and provide full continuous service. Leaving nothing to chance. At Karnataka Bank, Business never stops. They have ensured your business is protected by NonStop Banking
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4.2Products Profile
1. Savings Bank Accounts: - Karnataka Bank presents an array of Saving Bank Products, ideally designed to suit the needs of various segments of the Society. Their product suite include the following a. KBL Vanitha - SB Account for Women. b. KBL Kishore - SB Account for the students between the age of 12 years and 18 years. c. KBL Tarun - SB Account with Any Branch Banking for the students between the age of 18 years and 25 years. d. KBL Salary Privilege - SB Account for salaried Persons with the convenience of Any Branch Banking. e. SB GEN (General) - SB Account with added benefits and Any Branch Banking Facilities. f. SB Money Sapphire - A specially Designed SB Account with a Host of Free Facilities. g. SB Money Platinum - SB Account Scheme loaded with Maximum Benefits. h. Insurance Linked Savings Bank Account - SB Account with Accident / Hospitalization Insurance Coverage at the bank's cost.
i.
SB Sugama - SB Account with 'No Frills'.
2. Current Accounts: - Karnataka Bank presents Power Packed KBL Current Account with Five options to suit your business Needs. Their product suite include the following a. CA General b. CA Money Pearl c. CA Money Ruby d.CA Money Diamond e.CA Money Platinum Page 33
Organizational Study 3. Deposit Products:-Life is one big journey of discovery especially when you're just starting out. In your personal finances, as in life, it is important to make astute decisions when you face new challenges. And the bank can help you get off to a good start. We aim to help you build on a strong foundation by maximizing returns on your investments and increasing your assets. As their privileged customer, you can make use of their customized products to take care of your specific banking needs. Their basket of financial products include a. Tax Planner: New tax saving deposit Schemes. The schemes provide dual benefits of high returns and tax exemption under Section 80(C) of the Income Tax Act 1961. b. Abhyudaya Cash Certificate: A growth oriented scheme with maximum returns. Money invested multiplies after the specified period. The minimum period of deposit is 6 months and the maximum period is 120 months. This is a re-investment plan and has a maturity value based on interest compounded on quarterly basis. c. Fixed Deposits: A high interest deposit scheme for specified periods ranging from 15 days to 10 years with interest payments made monthly, quarterly, half-yearly or yearly as required by the depositor. d. Soulabhya Deposit: A flexible 'twin gain' Deposit Scheme that allows withdrawal of deposits in units of Rs.1,000/- each in case of need, without affecting the interest payable on the remaining units. Minimum amount of deposit is Rs.5,000/- and in multiples of Rs.1,000/- thereto. e. Cumulative Deposit: A monthly deposit scheme whereby a fixed amount is to be contributed monthly for a minimum period of 6 months and a maximum of 10 years. This is an ideal scheme to save a fixed amount for future plans such as education, buying a home etc. The maturity value of the investment is calculated based on the interest cumulated over the period of investment. f. Insurance linked Savings Bank Deposit: Free accident insurance coverage with your savings account! By maintaining a stipulated minimum balance in SB account, you become entitled to free accident insurance coverage of up to Rs.2 lakh and Rs.10,000/- towards reimbursement of hospitalization expenses arising out of accidents.
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Organizational Study g. Resident Foreign Currency (Domestic) Account: Foreign currency in USD, GBP and Euros may be deposited. This account can be opened as a current account only. The account carries no interest with it and there is no minimum amount for opening the account. Foreign exchange acquired in the form of currency notes, travellers cheques, gifts, honorarium received outside India, gifts received from relatives and earnings through the export of goods and services, can be credited to this account. h. NRI products: Wide range of Deposit schemes for Non-Resident Indians. It includes Non-Resident Rupee Account (NRE), Foreign Currency Non- Resident (Bank) Scheme (FCNR[B]) and Non Resident (Ordinary) Account (NRO) with very attractive and competitive rates. Resident Foreign Currency (RFC) (Domestic) Account for returning Indians is also available. i. Senior Citizens Deposit Scheme: Respecting our elders through additional interests for their savings and other benefits. 4. Loans: - A family man has different financial needs at different stages in his life. By understanding your changing financial needs, They have developed products that cater to your every step in life, be it luxury or providing quality standard of life to your family. The products they offer to you are honest in intent and quality in content. It offers you the individuality with respect to your needs and to your earnings. And most of all, it comes with understanding you and your special individual needs. Their product suite include a. KBL Vidyanidhi (Education Loan Scheme) b. KBL Easy ride ( For Two Wheelers) c. KBL Car finance (For New and Second Hand Cars) d. KBL Salaried Persons Loan (Scheme for Financing Salaried persons) e. K-Power (Personal Loans) f. KBL Insta Cash (For Consumption Purposes) g. KBL Apna Ghar (Home Loan) h. KBL Niveshan Scheme (Purchase of House site) i. Krishi card (Agriculture) Page 35
Organizational Study 5. Cards: - Karnataka Bank introduces a range of cards depending upon your requirement. These cards gives you access to your account whenever you want, wherever you are. a. Money Plant Debit Cards: Money Plant International Debit Card allows you to purchase goods at Merchant Establishment and also gives freedom to withdraw cash from ATMs in India and abroad. This card gives you the freedom of making the purchases without the hassle of paying in cash. your purchase will be debited to your account instantly. You can use your Debit card as a credit card with credit facility of maximum limit of Rs. 25000/- for 45 days under K Power Scheme.
Visa Debit Card
Visa Gold Debit Card
b. KBL Gift Card: The KBL Gift Card has been specially designed to make it easy for people to choose a gift for their loved ones. The card can be used as an elegant way of gifting to your near and dear ones, who in turn can use this card to shop, dine, party or to purchase online items of their choice. It allows freedom of choice to the receiver. It can be used for any occasion including Marriage, Birthday, Diwali, Holi, New Year, etc.
KBL Gift Card
c. KBL Travel Card: At Karnataka bank Ltd., our priority is to make your leisure trips a hassle free experience. Hence we bring you KBL Travel Card that offers you easy Forex access. So while you travel abroad, our card makes your trip convenient and free from Forex hassles.
KBL Travel Card
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Organizational Study 6. Working Capital Finance:- Fund Based credit facilities such as Cash Credit, Overdraft, and Discounting & Purchasing of Bills etc. Export and Import Finance. Non-fund Based credit facilities such as Letter of Credit, Bank Guarantees (Performance / Financial) etc. Subject to loan policy of the bank and SCC of RBI. 7. Term Loans:- Fund Based finance for capital expenditure / acquisition of fixed assets towards setting up / capacity expansion of a business or industrial unit. Non-fund Based finance in the form of Deferred Payment Guarantee (DPG) for acquisition of fixed assets towards setting up of / capacity expansion of a business or industrial unit Finance under Technology up gradation scheme. Subject to loan policy of the bank and SCC of RBI. 8. Infrastructure Finance:- Financing for all kinds of infrastructure projects, such as, Power Generation, Transmission & Distribution, Road constructions, Construction of Bridges on the Road / Railway Lines, Air/ Sea Portdevelopment activities, Telecom, Water supply system, Urban Development etc. Subject to loan policy of the bank and SCC of RBI. 9. Business Finance Products:a. Retail trade - Helping your Retail Business Grow. Finance for every business entrepreneur in the retail trade. b. Finance to small scale Industry - Helping you to start your own small industry. c. Project finance - Helping to start a larger Business. Either short or long term you have flexible options. d. Finance to Medium and Large scale Industries - Need based finance for acquiring assets and raw materials at attractive interest rates. e. Export finance - Finance to help your export business. Timely assistance to perform your export obligation. f. Agriculture Finance - Finance for various Agriculture activities. Come to the pioneers in many agro based credits.
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4.3Services Profile
1. Multi Branch Banking:- Multi Branch Banking facility is a value added service to our customers taking advantage of "Core Banking Solution". It is a 'technology driven-anywhere banking' facility and 'at par' facilities for Savings Bank and Current account with structured schedule of services and charges. Now the customer can access his account at all branches of the Bank. The salient features of the scheme are as under: 1. The concept of 'anywhere' banking is extended to all domestic SB and Current Accounts except NO Frills Accounts. Even SB-General and Current-General accounts are eligible for MBB facility with Multicity Cheques. 2. SB-General (SBGEN),SB-Money Sapphire, SB-Money Platinum, Current A/c General (CAGEN),CA- Money Pearl, CA - Money Ruby, CAMoney Diamond, CA-Money Platinum, are MBB accounts with structured free services and Multicity Cheque facility with cheques payable at par at all Branches. Facilities available under MBB: a. Payment Services: Anywhere Cash withdrawal for self cheques only Multicity Cheques Funds Transfer Funds Transfer through RTGS/NEFT b. Collection Services: Anywhere Cash Deposit- By self only Collection of out station cheques Anywhere Deposit of cheques for collection c. Other Facilities: Internet Banking Mobile Banking (SMS alerts) Demat Account 'Money Plant' Visa International Debit Card
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Organizational Study 2. E-mail statements:- Karnataka Bank Ltd introduces Email Statements for all its Savings (Resident & Non-Resident accounts) & Current account holders. You can now receive your statements via email without any delays. You also have the option to maintain the statement on email, print it or save it on a CD. Essentially, you will receive the same information you would normally receive by mail, but now at the click of a button. The features and benefits are as follows Features & Benefits: Email Statements are FREE If you have a savings account/ current account you will get monthly Email Statements. Physical statements will be discontinued if you opt for Email Statements. Get information on our new products and mandatory information online. 3. Money Plant ATM:- In a major step towards ushering in convenienceBanking for the Customers, Karnataka Bank has entered into ATM sharing arrangement with NPCI-NF Sand . The NFS network with NPCI has 74 Member Banks and 75 sub member banks and covers around 1,18,660 ATMs . All Debit & Money plant International Visa Debit Card holding customers of Karnataka Bank can avail the facility of Withdrawal through Banks' Money Plant ATMs and shared network ATMs. Additionally, the customers can also avail the facility of "Mini Statement and Pin Change" in the NPCI-NFS network ATMs. Customers can avail Cash Withdrawal and Balance Inquiry facility in the following ATMs. The Official logos of the networks shown above can be used to identify the Member Bank ATMs. All The Member Banks' customers of both networks can avail of acquirer services at all Karnataka Bank ATMs across the country. The bank has NFS ATM sharing network with 150 banks and 67000plus ATMs across the country.
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Organizational Study 4. Internet Banking:- Our Internet Banking facility Money Click lets you to manage your finances in the comfort of your home or your office as per your convenience. Money Click is a Self-Service Channel, which is available 24 hours a day and 365 days a year in an absolutely simple, friendly but secured environment. In Money Click, a mere touch of a button or click of a mouse makes you accessible to a host of Banking Services, called Fingertip Banking. You can carry out your banking transactions safely and with total confidentiality by enjoying online banking without wasting your time or losing your peace of mind. a. Money Click - Retail: It offers different online services to our retail/individual customers, like balance enquiry, requests for Cheque books, recording stop-payment instructions, balance transfer instructions, account opening and other forms of traditional banking services. This also offers utility bill payment services to our valued customers for payment of BSNL Mobile, Electricity, Water bills etc. b. Money Click - Corporate: In addition to the above services, our Corporate Customers can avail Trade Finance Facilities such as Import/ Export Credit facilities, Requests for Forward Contracts, Inland Trade, Bank Guarantee etc. Also Money click facilitates access control at Corporate User level wherein various users at different hierarchy levels have varying powers to operate a corporate account. c. Money Click Cyber kids: Children between 12-18 years who are having Account with us are eligible for this special e-banking facility. 5. Mobile Banking:- It is to accomplish our endeavor to create additional delivery channels to the customers, our Bank is launching yet another product by name KBL Mobile where a host of Banking services, within the specified limits, are made available at the pre-registered Mobile Phone Handsets. The Mobile Banking Services was launched on 25th September 2012.
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Organizational Study Services offered to the customer a. b. c. Enquiry Balance Enquiry Mini Statement Cheque Status IFSC Code Customer Care Details Deposit Account Enquiry Loan Account Enquiry Request Change Primary Account Stop Payment of Cheque (On line) Request Cheque Book Request Debit Card Request Debit Card PIN Request New Account Request Fixed Deposit
Fund Transfer Own Account - Fund transfer between the accounts. Within KBL- Fund transfer to any other account with Karnataka Bank Other Bank- Inter Bank Fund transfer through NEFT with IFS Code. Inter Bank Mobile Funds Transfer through NPCI using Mobile Money Identifier (MMID) Person to person Manage my MMID Regenerate MMID MMID transfers are enabled only for transfers between the persons d. Payee Create Payee within KBL Create Payee Other Bank Create Payee Immediate Payment Services (IMPS) View Payee
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Organizational Study e. KBL- ATM / Branch Locator ATM Locator Branch Locator f. M-Commerce Airline Ticket booking Mobile Recharge M-Shopping DTH Top up
g. Payments Utility Bill Payments
6. Money Transfer:a. Real Time Gross Settlement (RTGS): RTGS is a payment system in which both processing and final settlement of fund transfer instructions take place on real time basis. It is a gross settlement system where fund-transfers are settled individually, i.e. without netting debits against credits. RTGS effects final settlement continuously and the settlements are immediate, final and irrevocable. Each Bank branch participating in the RTGS is identified by a unique Indian Financial System Code (IFSC). With the advancement of the Technological changes in the Banking industry the RTGS introduction has become a boom in settling the interbank funds instantaneously. The Customer can avail this facility and make instantaneous transfer of funds to beneficiary`s account Karnataka Bank became a member of Real Time Gross Settlement (RTGS) System from 16th July 2004 and has been settling Inter-Bank transactions in Mumbai since then. Money Quick services can be accessed by customers which uses RTGS service. This Money Quick facility provides INTERBANK funds transfer. The minimum amount for Interbank funds transfer facility for customers under MoneyQuick is fixed at Rs. 2,00,000 (Rupees Two Lakh only).Service Charges for outward customer transactions - Rs.2 lakh to Rs.5 lakh is Rs.25/- and for Above Rs.5 lakh is Rs.50/- per transaction plus service tax. Service Charges for Inward customer transactions - FREE. Page 42
Organizational Study b. Western Union Money Transfer (WUMT): Western Union Financial Services International has a legacy of public trust built through more than 150 years of extra ordinary continuous service. This international money transfer system facilitates quick, secure, reliable and convenient transfer of funds all over the world. Neither the sender nor the receiver has to have a Bank account with us and the receiver pays no fee. The person who remits you the money will fill in a prescribed form giving details of beneficiary and deposit the money along with the requisite service charges (fee) at its agent abroad. The remitter will give one Test Question and its answer for identification of beneficiary. The remitter then gets a receipt with Money Transfer Control Number (MTCN) which he will inform to you as the beneficiary of the transfer. The amount so deposited will be available to you within 10 seconds. You walk into any of the branches of our Bank offering this facility in India, fill in the form giving information available with you including MTCN, test question etc., along with proof of identification like ration card / driving license / voter identity card / credit card etc. The paying branch will access the Western Union System for authorization and make payment. 7. Insurance Service:- In conformity with their endeavor to become a financial supermarket and to provide total financial solutions to their customers, they have diversified into the marketing of life insurance products of PNB MetLife India Insurance Co. Ltd., an affiliate of MetLife Inc, which is one of the leading providers of insurance, annuities and employee benefit programs, serving 90 million customers across the world. They offer a wide range of solutions to help you plan for your various financial needs like your children's education & wedding, your retirement, protection of your housing loan repayments, protection for your family etc. They have forayed into General Insurance business by promoting a Joint Venture company called Universal Sompo General Insurance Co. Ltd. and entered into a Corporate Agency arrangement for distribution of their General Insurance products through their branches. You can now get your assets insured against fire, burglary and a host of other eventualities. You can also cover yourself as well as your near and dear ones against the contingencies of accidental death, hospitalization etc. Page 43
4.4Various Rates of the Bank

KARNATAKA BANK LIMITED
Interest Rates at a Quick Glance
(As per format prescribed by RBI/2008-09/166 DBOD.No.Leg.BC.42 /09.07.005/2008-09 dated 12-09-2008) Rates at a Quick Glance as on 01-07-2013.
Deposit Accounts
Interest Rates on Term Deposits Domestic, NRE and FCNR Minimum Balance Rate of Interest (% p.a.) Rural Semi Urban Urban Metropolitan
Nature
1. Savings Bank A/c ( including NRE & NRO A/c) a. With cheque book facility
Rs.1,000/-
b. Without cheque book facility 2.No frill SB Account
Rs.200/-
Rs.50/-
Rs.100/-
Rs.150/-
Rs.200/-
Rate Of Interest of Savings Bank A/c(Including NRE& NRO A/c) 3. Term Deposits W. E. F. 16-08-2013
4.00 (w.e.f 10.07.2012)
Senior Citizens General A. Domestic For Deposits less than Rs. 1 crore 7 days to 45 days 46 days to 90 days 91 days to 120 days 121 days to 180days 3.50 6.50 7.75 8.25 (For FD and ACC only) For Deposits of For For Deposits up above Rs. 2 Deposits to & inclusive crore upto of above of Rs.2 crore & inclusive Rs. 5 of Rs. 5 crore crore 4.00 7.00 8.25 8.75 3.50 6.50 7.75 8.25 3.50 6.50 7.75 8.25
For Deposit of Rs. 1 Crore and above and upto and inclusive of Rs 5 Crore 3.50 6.50 7.75 8.25
For Deposits of above Rs. 5 crore 3.50 6.50 7.75 8.25
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181 days 8.25 8.25 to 364 days 1 year to 2 9.25 9.25 years Above 2 9.00 9.00 years to 3 years Above 3 9.00 9.00 years to 5 years Above 5 8.75 8.75 years to 10 years B. NRE Account W.E.F. 16.08.2013 One year to 2 years Above 2 years to 3 years Above 3 years to 5 years Above 5 years to 10 years C. FCNR(B) Accounts W.E.F. 15.08.2013 8.25 9.00 8.75 8.75 9.75 9.50 9.50 8.25 9.25 9.00 9.00 8.25 9.00 8.75 -
--
9.25
8.75
--
9.25 9.00 9.00 8.75
Period 1 Year Only Above 1 year but less than 2 Years. 2 years and above but less than 3 Years. 3 Years and above but less than 4 years 4 years and above but less than 5 Yrs 5 years only
USD 2.67 2.67 2.48 4.78 5.17 5.56
GBP 2.86 2.86 2.71 4.87 5.11 5.41
EUR 2.47 2.47 2.56 4.74 4.96 5.20
CAD 3.37 3.37 3.55 5.78 6.03 6.26
AUD 4.48 4.48 4.65 6.89 7.19 7.42
JPY 2.41 2.41 2.28 4.32 4.38 4.46
CHF 2.24 2.24 2.20 4.34 4.52 4.73
SEK 3.28 3.28 3.45 5.67 5.89 6.11
HKD 2.51 2.51 2.65 4.93 5.31 5.70
SGD 2.48 2.48 2.71 5.00 5.41 5.80
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Loans Rates
Loans 1. Housing Loan (KBL-Apna Ghar ) Upto Rs.25 Lakh Interest rates (W.E.F. 10.11.2012) Above 25 Lakh and Upto Rs.100 Lakh 11.25 Above Rs.100 Lakh and Upto Rs.200 Lakh 11.75 Above Rs.200 Lakh upto Rs.500 Lakh 12.25 0.25% with a minimum of Rs 250.00 Processing Charges
0.25% with a minimum of Rs 250.00
10.75 2. Personal Loans a. Consumer Durable Loans b. Senior citizen Loan Scheme
BR+5.00% No such scheme
0.50% with a minimum of Rs 250.00 c. Personal Loan Scheme BR+6.50%
3. Vehicle Loan a. Two wheeler loans (KBL-Easy Ride) New-Up to Rs.5.00 lakh New-Above Rs.5.00 lakh and up to Rs 50.00 lakhs. Without CGTMSE Old Vehicles(Max Rs 100 lakhs) New Cars-Max upto Rs 50 Lakh For Old Cars (Max Rs 20 Lakh) Up to Rs 4 Lakhs Girls - up to Rs. 4 lakhs Above Rs. 4 lakhs Girls - above Rs. 4 lakhs Maximum Rs.1 lakh(New Vehicles Only) 13.75 11.75 12.75 0.25% with a minimum of Rs 250.00 + Up front asset verification/inspection charges of Rs 1000.00. 0.25% with a minimum of Rs 250.00 + Up front asset verification/inspection charges of Rs 250.00.
b. Other vehicle Loan (KBL MSE SchemeNormally with CGTMSE Cover)
15.50
11.25 0.25% with a minimum of Rs 250.00 + Up front asset verification/inspection charges of Rs 1000.00.
c. Cars Loans(KBL Car Finance)
15.00
4. Educational Loans (repayable in 5 to 7 years after commencement of repayment)
14.25 13.75 14.75 14.25
-NIL-
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4.5Overveiw products & services Statistics

Deposits
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Advances & Loans
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Investments
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5. Organization Structure
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5.1Organization Structure of Karnataka Bank Ltd.
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5.2Hierarchical Structure
MD/CEO
General Manager
Deputy Gen. Manager
Assistant Gen. Manager
Manager
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5.3Functional Structure
HO
Treasury & Accounts
HR & IR
IT
Credit
Legal
5.4Reporting Structure
Head office
Regional office Branches
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5.5Scalar Chain in a Branch
Manager
Asst. Branch Manager
Officer
Spl. Assistant
Clerk/Cashier
Sub-staff
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5.6Division of Work
Work is divided into various sections in the Head Office. Each regional office reports to the Head Office with respective sections. Each branch across various regions reports to the concerned regional office. Within a branch all report to the branch manager.
5.7Span of Control
Manager to associate: 1:5 in small branches or extension counter. OR Manager to associate: 1:20 in large branches and corporate office.
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5.8Present Management Team
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6. Functional Departments
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6.1Introduction
A functional department is used to develop synergies for a number of entities that are operating and help them implement their strategies. They also assist the management committees in defining and implementing the groups strategy. They also monitor performance of various operating entities, business unit and subsidiaries. The structure of functional organization The inter-related functions are allotted to each department. An activity is allotted to each functional department. An activity allotted to each department can-not be allotted to another department. Functional authority is confined to functional advice. It provides expert service at each functional department.
Departmentation
Departmentation is the process of dividing the work of an organization into departments or either into manageable units. Department are classified on the basis of grouping of activities.
Basic purpose of Departmentation

To make the size of each department unit manageable. To secure the advantage of specialization. To delegate responsibility. To facilitate administrative control.
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6.2Functional Department in Karnataka Bank Ltd
Departments
Accounts Dept. Risk Mgmt. Dept.
HR & IR Dept.
Credit Dept.
The various other departments that assist in the smooth functioning of the banking activities are namely: Advance Department Treasury Department Inspection and Audit Department Recovery Department Investment Department Planning and Development Department Vigilance cell Management Information System Department Legal Department IT Department Company Secretariat
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6.3Human Resource and Industrial Relation Department

The quality of Human resource in any organization will have an important effect on quality of services rendered by the organization. HR department provides necessary and adequate training to the staff members to upgrade their skill and knowledge. The HR and IR Department of Karnataka Bank Ltd. have the authority to monitor all sorts of HR functions of the bank. It is leaded by the DGM who is supported by 30 staff numbers including 2 chief managers.
Structure of HR & IR Department
Staff Chief Mgr. (HR) Deputy Gen. Manager Chief Mgr. (IR) Staff
1. List of activities being carried out by the HR department: Salaries across bank branches/offices Recruitment, promotions, transfers Staff provident Fund Pension and gratuity Staff quarters Leave position/man power Travelling allowance sanctioning Hospitalization and medical facilities.
Staff Staff
2. Activities being carried out by the IR department Enquiries Matters related to complaints Legal Matters
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6.4Accounts Department
The part of an organization that manages its money. The business functions of the department typically include planning, organizing, auditing, accounting for and controlling its company's finances. The department also usually produces the company's financial statements.
Structure of Accounts Department
Deputy Gen. Manager Assistant Gen. Manager
Staff Chief Manager Staff Staff Chief Manager Staff
The accounts department is one of the most important departments in a bank, as it helps to provide the financing and accounting information necessary to make various decisions. However, this department has a role that encompasses a number of duties which are given below: Book Keeping Profit & loss and Balance sheet Update Managers Financing Considerations
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6.5Credit Department
Credit department is a department in a bank that evaluates the financial condition of applicants and maintains a log of loan payments on currently outstanding loans. Credit information is gathered on a confidential basis and stored for future reference. It also responds to requests by other lenders for credit information on a particular borrower. The main function of this department is lending of loans and advances to the borrowers, recovery of non-performing assets, settling of dues, providing various loan schemes like housing loan scheme etc.
Credit (Policies & priority) Division:

Formulating credit policy guidelines. Monitoring performance with regard to retail credit. All work relating to priority sector and rural development. Liaison with NABARD. Submission of related data to various outside agencies.
Credit (Operations) Division:

Processing of credit proposal coming under HO powers. Monitoring and control of performance credit.
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Structure of Credit Department
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6.6Risk Management Department

Effective risk management is essential for the success of the bank. The bank has already formed committees of executives for identification, measurement, monitoring and management of risks.
Structure of Risk Management Department
Deputy Gen. Manager
Chief Manager
Staff
Functions of the Department

Developing policies and procedures for management of credit risk. Identify, Measure and Monitor the overall risk profile of the bank, generally grouped credit, market and operation risks. Finding the investment avenues with low risk and high returns. Ensuring the liquidity of the funds invested in the portfolio.
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6.7Other Department
Treasury Department
Treasury operations mainly comprises of surplus statutory liquidity ratios, the non-statutory liquidity ratios investment.
Inspection and Audit Department

The audit committee of Board of Directors is supervising the internal audit and compliances functions. The system of regular inspection, short term inspection and credit inspection of branches forms part of system of internal control.
Recovery Department
Main function of this department is to recover all dues. They make a list of all the Non-performing assets and take follow up measures thereafter.
Investment Department
This department deals with how the surplus amount has to be invested in particular sectors or areas with regard to RBI regulations.
Advance Department
The activities undertaken by the advance department are general advance, specialized advance, large advance, forex division, lease finance.
Planning and Development Department

Main function is to plan the development of the organization which includes launching of new products, offering ATM services, deposits, insurance, mutual funds etc.
Vigilance Cell
The functioning of this department is similar to that of the inspection department. Inspection department looks into the general aspect while the Vigilance department concentrates on the specific problem area.
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Management Information System Department

The important function of this department is to collect information from various branches for onward functioning of the bank.
Legal Department
In the organization if there are any legal complications like filing a suit etc., any advice required in relation to these matters can be obtained from the legal section headed by the legal specialists.
IT Department
Information technology follows the core banking systems. Management of information technology is the main function of this department.
Company Secretariat
The Secretarial department heads the general meeting. The main function of this department is issuing of shares, transfer of shares and conducting annual meetings.
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SWOT Analysis
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Karnataka Bank
Parent Company Category Sector Tagline/ Slogan USP Karnataka Bank Banking and Financial Services Banking and finance Your family bank across India Customer centric services
STP
Segment Target Group Positioning Individual and Industry banking Urban Sector Complete Banking solutions
SWOT Analysis
1. Over 470 branches across 20 states and 2 Union Territories 2. Emphasis on customer satisfaction 3. Have over 5844 employees and 4.84 million customers, including farmers and artisans in villages and small towns throughout the country 4. Quick Remit, a facility to make money transfer easy for NonResident Indians living in Canada, USA and the UK 1. Less reach across country in terms of ATMs, branches as compared to bigger banks 2. Brand visibility is less due to lack of advertising Opportunity 1. International banking in areas with good pockets of Indian population 2. Rural banking and more services for the rural areas 1. Economic slowdown 2. Highly competitive environment 3. Stringent Banking Norms
Strength
Weakness
Threats
Competition
1. 2. 3. 4. 5. 6. Indian bank Union Bank of India Federal bank Dhanalakshmi Bank Lakshmi vilas Bank Karur Vysya Bank
Competitors
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8. Findings
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8.1Findings
The Karnataka Bank has a very good customer relationship. The Bank gives high quality services to its customers. Karnataka Bank has introduced mobile banking and online trading services. Bank has 529 ATM and 556 Branches across the country. Bank uses new technologies in products and services to meet customer needs and providing quick services. Growing customers base for the bank. Deposits of the bank on 30th June 2013 Rs.36,915crs. Advances of the bank on 30th June 2013 Rs.25,244crs. Investment of the bank on 30th June 2013 Rs.14,558crs. Bank has a widely spread distribution network in all southern region of the country. Customer friendly products and plans offered by the banks. Bank has developed its products in such way that it can meet different needs customers. Earnings per share on 30th June 2013 were Rs.20 and Dividend per share as on 31st march 2013 was 40%.
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9. Suggestions
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9.1Suggestions
The Karnataka Bank can come up with affordable and feasible policy for younger and retired people. The Karnataka Bank should reach across the country in terms of ATM, branches as compared to other private sectors banks. The Karnataka Bank should concentrate for more operations in the north India. The Karnataka Bank should concentrate on Customer awareness programs to reach across the country. The Karnataka Bank should introduce products for lower income group. The Karnataka Bank should open an ATM and Branches in rural areas. The Karnataka Bank should concentrate on advertisement their products and their convenience to reach across the country. The Karnataka Bank should concentrate for more agriculture and small scale industries purpose. The Karnataka Bank should update new technologies to make customer long term relationships and offer total quality service at all levels. The Bank should be in par with competitors to have edge in the market.
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10. Learning Experience
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10.1Learning Experience
It was a great learning experience for me during the course of the internship. The duration of one month doing the internship in an organization has taught a lot of things which will be valuable and useful for me in the near future to come. Here are some of the many things which I have learnt during the course of this internship: Practical knowledge of how day to day activities are carried out in a bank. Information and knowledge of Indian banking industry. About Karnataka bank its history and evolution over the years. About various products and services offered by Karnataka bank to its customer and general public. The organization structure and working of various functional departments of Karnataka bank. Practical application of SWOT analysis to the bank. Preparation of a report and collection of data & information for the report. Interpretation on financial statements. Various banking rules and norms to be followed by a bank. Application of theoretical knowledge into practical aspects of business and banking.
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11. Annexure
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11.1 Balance sheet of Karnataka Bank for 5yrs

Balance Sheet of Karnataka Bank Mar '13 12 mths ------------------- in Rs. Cr. ------------------Mar '12 Mar '11 Mar '10 Mar '09 12 mths 12 mths 12 mths 12 mths
Capital and Liabilities: Total Share Capital 188.35 188.29 188.20 133.99 121.58 Equity Share Capital 188.35 188.29 188.20 133.99 121.58 Share Application 0.00 0.00 0.00 0.00 0.00 Money Preference Share 0.00 0.00 0.00 0.00 0.00 Capital Reserves 2,668.73 2,409.92 2,240.89 1,698.76 1,445.44 Revaluation 0.00 0.00 0.00 0.00 0.00 Reserves Net Worth 2,857.08 2,598.21 2,429.09 1,832.75 1,567.02 Deposits 36,056.22 31,608.32 27,336.45 23,730.65 20,333.29 Borrowings 1,579.76 1,147.07 1,086.33 341.64 3.97 Total Debt 37,635.98 32,755.39 28,422.78 24,072.29 20,337.26 Other Liabilities & 1,033.32 967.96 841.14 1,130.11 953.52 Provisions 41,526.38 36,321.56 31,693.01 27,035.15 22,857.80 Total Liabilities Mar '13 12 mths Assets: Cash & Balances with RBI Balance with Banks, Money at Call Advances Investments Gross Block Accumulated Depreciation Net Block Capital Work In Progress Other Assets Total Assets Contingent Liabilities Bills for collection Book Value (Rs) 1,717.96 235.84 Mar '12 12 mths 1,704.75 160.82 Mar '11 12 mths 1,939.81 46.25 Mar '10 12 mths 1,743.10 62.45 Mar '09 12 mths 1,364.98 95.75
25,207.68 20,720.70 17,348.07 14,435.68 11,810.05 13,432.48 12,841.23 11,506.34 9,992.05 8,961.49 166.96 334.55 328.91 313.85 292.41 0.00 182.32 183.38 165.77 153.92 166.96 0.00 152.23 0.00 145.53 0.00 148.08 0.00 138.49 0.00
765.46 741.85 707.01 653.80 487.05 41,526.38 36,321.58 31,693.01 27,035.16 22,857.81 5,618.16 9,624.53 8,278.58 9,445.63 9,598.35 2,349.29 151.70 2,194.84 137.99 1,720.12 129.08 1,705.85 136.80 1,373.32 128.89
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11.2 Profit & Loss Account of Karnataka Bank for 5yrs

Profit & Loss account of ------------------- in Rs. Cr. ------------------Karnataka Bank Mar '13 Mar '12 Mar '11 Mar '10 Mar '09 12 mths 12 mths 12 mths 12 mths 12 mths Income Interest Earned 3,764.29 3,112.88 2,370.85 2,043.42 1,917.40 Other Income 397.64 334.39 291.76 311.26 353.15 4,161.93 3,447.27 2,662.61 2,354.68 2,270.55 Total Income Expenditure Interest expended 2,860.56 2,368.87 1,758.36 1,707.79 1,443.83 Employee Cost 375.08 324.95 345.08 206.80 190.41 Selling and Admin 0.00 220.82 195.61 184.05 132.41 Expenses Depreciation 24.03 21.91 22.99 22.23 19.84 Miscellaneous Expenses 554.18 264.64 135.96 66.69 217.35 Preoperative Exp 0.00 0.00 0.00 0.00 0.00 Capitalized Operating Expenses 666.03 651.93 630.18 474.61 393.50 Provisions & 287.26 180.39 69.46 5.16 166.51 Contingencies 3,813.85 3,201.19 2,458.00 2,187.56 2,003.84 Total Expenses Mar '13 Mar '12 Mar '11 Mar '10 Mar '09 12 mths 12 mths 12 mths 12 mths 12 mths 348.08 246.07 204.61 167.12 266.71 0.00 0.00 0.00 0.00 0.00 0.03 0.03 0.02 0.03 0.10 348.11 246.10 204.63 167.15 266.81 0.00 0.00 0.00 0.00 0.00 75.38 65.90 56.46 53.63 72.94 12.81 10.69 8.95 9.11 12.40 18.48 40.00 151.70 197.14 62.69 88.19 0.09 348.11 13.07 35.00 137.99 129.57 39.91 76.59 0.03 246.10 10.87 30.00 129.08 102.55 36.65 65.41 0.03 204.64 12.47 40.00 136.80 101.38 3.01 62.74 0.02 167.15 21.94 60.00 128.89 174.43 7.00 85.34 0.03 266.80
Net Profit for the Year Extra ordinary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualized) Earnings Per Share (Rs) Equity Dividend (%) Book Value (Rs) Appropriations Transfer to Statutory Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt Balance c/f to Balance Sheet Total
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11.3 Results of Karnataka Bank for 5yrs

Yearly Results of Karnataka Bank
------------------- in Rs. Cr. -------------------
Mar '13 Mar '12 Mar '11 Mar '10 Mar '09 Interest Earned (a) Int. /Disc. on Adv/Bills 2,817.72 2,373.80 1,707.65 1,388.98 1,390.93 (b) Income on Investment 938.43 736.33 642.22 633.46 513.83 (c) Int. on balances With 3.67 0.99 0.60 0.58 5.52 RBI (d) Others 4.47 1.76 20.37 20.40 7.12 Other Income 397.64 334.39 291.76 311.26 353.15 EXPENDITURE Interest Expended 2,860.56 2,368.87 1,758.36 1,707.79 1,443.83 Employees Cost 375.08 324.95 345.08 206.80 190.41 Other Expenses 290.96 243.24 203.87 179.25 156.10 Depreciation -----Operating Profit before 635.33 510.21 355.29 260.84 480.21 Provisions and contingencies Provisions And 171.15 221.62 120.35 71.08 80.50 Contingencies Exceptional Items -----P/L Before Tax 464.18 288.59 234.94 189.76 399.71 Tax 116.10 42.52 30.33 22.64 133.01 P/L After Tax from 348.08 246.07 204.61 167.12 266.70 Ordinary Activities Prior Year Adjustments -----Extra Ordinary Items -----Net Profit/(Loss) For the 348.08 246.07 204.61 167.12 266.70 Period Equity Share Capital 188.35 188.29 188.20 133.99 121.58 Reserves Excluding 2,668.73 2,409.92 2,240.89 1,698.76 1,445.44 Revaluation Reserves Equity Dividend Rate (%) -----ANALYTICAL RATIOS a) % of Share by Govt. -----b) Capital Adequacy Ratio 11.95 11.95 12.91 12.37 27.02 - Basel -I c) Capital Adequacy Ratio 13.22 12.84 13.33 --- Basel -II EPS Before Extra-Ordinary Basic EPS 18.48 13.07 15.23 --Diluted EPS 18.46 13.06 15.20 --EPS After Extra Ordinary Basic EPS 18.48 13.07 15.23 --Diluted EPS 18.46 13.06 15.20 --NPA Ratios :
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i) Gross NPA ii) Net NPA i) % of Gross NPA ii) % of Net NPA Return on Assets % Public Share Holding No Of Shares (Crores) Share Holding (%) 638.86 377.75 2.51 1.51 0.89 18.83 100.00 684.72 435.20 3.27 2.11 0.73 18.83 100.00 702.17 280.34 3.97 1.62 0.72 18.82 100.00 -----13.40 100.00 -----12.16 100.00
11.4 Cash Flow of Karnataka Bank for 5yrs

Cash Flow of Karnataka Bank
------------------- in Rs. Cr. ------------------Mar '13 12 mths 465.30 102.74 -39.88 25.37 88.23 Mar '12 12 mths 287.78 -121.56 -27.59 28.66 -120.49 Mar '11 12 mths 235.45 -589.39 -19.72 789.63 180.51 Mar '10 12 mths 193.05 301.74 -31.47 74.54 344.81 Mar '09 12 mths 406.15 -53.02 -38.53 -69.15 -160.70
Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents
1865.57 1986.06 1805.55 1460.74 1621.43 1953.80 1865.57 1986.06 1805.55 1460.74
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11.5 Progress over a Decade
Page 83
12. Bibliography
Page 84
12.1Books & Reports

Banking theory and practices- B.S.Raman Research Methodology- C.R.Kothari Marketing Research- Nargundkar Karnataka Banks 88th & 89th annual report
12.2Websites
www.karnatakabank.com www.moneycontrol.com www.wikipedia.com www.reportjunction.com
Page 85

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Organizational Study

1.3Objectives of the Study

1.4Scope of the Study

1.5Data Collection Primary data collection technique

2.2Need of the Banks

2.3History of Indian Banking System

2.4Important Milestones of the Banking Industry

2.7Structure of the Financial Sector in India

2.8Who regulates the Financial Sector in India?

2.9Structure of the Indian Banking Industry

2.10Major Players in the Banking Industry

List of State Bank Group Banks in India

List of Private Sector Banks in India

List of Foreign Banks operating in India

2.11Growth Drivers of the Banking Industry

2.12Key Challenges of the Banking Industry

2.13The Banking Outlook in 2013 & 2014

Sparking M&A hopes

Opportunities in the Banking

Wealth Management to be a big business

3.1Overview of the Bank

Type: Industry: Founded:

Products: Revenue: Total assets: Website:

3.2Background and Inception of the Bank

3.3Nature of the Business Carried

3.4History & Evolution

3.6Vision, Mission, and Quality Policy

3.10Recent Activities of KBL

3.11Photo Gallery of KBL

4. Product & Service Profile

SB Sugama - SB Account with 'No Frills'.

Visa Debit Card

Visa Gold Debit Card

KBL Gift Card

g. Payments Utility Bill Payments

4.4Various Rates of the Bank

b. Without cheque book facility 2.No frill SB Account

4.00 (w.e.f 10.07.2012)

For Deposits of above Rs. 5 crore 3.50 6.50 7.75 8.25

9.25 9.00 9.00 8.75

USD 2.67 2.67 2.48 4.78 5.17 5.56

GBP 2.86 2.86 2.71 4.87 5.11 5.41

EUR 2.47 2.47 2.56 4.74 4.96 5.20

CAD 3.37 3.37 3.55 5.78 6.03 6.26

AUD 4.48 4.48 4.65 6.89 7.19 7.42

JPY 2.41 2.41 2.28 4.32 4.38 4.46

CHF 2.24 2.24 2.20 4.34 4.52 4.73

SEK 3.28 3.28 3.45 5.67 5.89 6.11

HKD 2.51 2.51 2.65 4.93 5.31 5.70

SGD 2.48 2.48 2.71 5.00 5.41 5.80

0.25% with a minimum of Rs 250.00

BR+5.00% No such scheme

0.50% with a minimum of Rs 250.00 c. Personal Loan Scheme BR+6.50%

b. Other vehicle Loan (KBL MSE SchemeNormally with CGTMSE Cover)

c. Cars Loans(KBL Car Finance)

4. Educational Loans (repayable in 5 to 7 years after commencement of repayment)

14.25 13.75 14.75 14.25

4.5Overveiw products & services Statistics

Advances & Loans

5.1Organization Structure of Karnataka Bank Ltd.

Deputy Gen. Manager

Assistant Gen. Manager