You are on page 1of 100

Executive summary

The last decade has seen many positive developments in the Indian banking sector. The policy makers, which comprise the Reserve Bank Of India (RBI). inistry of finance and related government and financial sector reg!latory entities, have made several notable efforts to improve reg!lations in the sector. The sector now compares favo!rably with banking sectors in the region of metries like growth, profitability and non performing assets ("#$s). $ few banks have established an o!tstanding track record of innovations, growth and val!e creation. This is reflected in their market val!ation. %owever improved reg!lations, innovations growth and val!e creation in the sector remain limited to a small part of it. The cost of banking intermedation in India is higher and bank penetration is far lower than in other markets. Indian&s banking ind!stry m!st strengthen itself significantly if it has to s!pport the modern and vibrant economy which Indian aspires to be. 'hile the onces for this change lies mainly with bank management can enabling policy and reg!latory framework will also be critical to their s!ccess. The st!dy involves the different types of services offered b banks for corporate. The

essence of banking b!siness is the f!nction of accepting deposits from p!blic with the facility of withdrawal of money by che(!e. Besides from the !s!al services, banks now have started giving additional services right from working capital needs to investment banking.'orking capital is the core area of banking ind!stry today. This pro)ect contains both primary and secondary data

1.INTRODUCTON

*orporate banking represents the wide range of banking and financial services provided to domestic and international operations of large local corporate and local operations of m!ltinational corporations. +ervices incl!de access to commercial banking prod!cts, incl!ding working capital facilities s!ch as domestic and international trade operations and f!nding channel financing in foreign and overdrafts as well as domestic and international payments, I"R term loans (incl!ding e,ternal commercial borrowings in foreign c!rrency), letters of g!arantee etc *orporate banking services are an integral part of the corporate investment, Banking and markets (*IB ) str!ct!re, which foc!ses on offering a f!ll range of services to m!ltinational, large domestic corporate and instit!tional clients. The investments banking and markets division brings together the advisory and financing, e(!ity sec!rities, asset management, treas!ry and capital markets, and private e(!ity activities of the gro!p to the complete the *IB financial prod!cts to the clients. *lients are serviced by sector based clients services teams that combine the relationship managers, prod!ct specialists and ind!stry specialists to develop c!stomi-ed financial sol!tions. These form the relationship team along with the Investments banking and advisory division. .ach team s!pports the client&s worldwide operations, ens!ring a f!ll !nderstanding of the company&s b!siness and financial needs. str!ct!re and provide a complete range of

1.1OBJECTIVES

To !nderstand the concept!al framework of corporate banking

To !nderstand the several areas !nder corporate banking.

To learn abo!t the lending proced!re of the banks to the corporate.

To find o!t the vario!s prod!cts and services offered by banks.

To !nderstand the f!t!re growth prospect!s in corporate banking

1.2Research Meth ! " #y$

/. #rimary data collected thro!gh 0!estionnaire filled by both bank and corporate.

1. +econdary data collected from books and websites.

2. %RO&I'E O& &EDER(' B(N)


4

Tho!gh initially it was known as the Travancore 2ederal Bank, it grad!ally transformed into a f!ll3fledged bank !nder the able leadership of its 2o!nder, head(!arters nestled on the banks on the river #eriyar.. r. 4 # %ormis. The name 2ederal Bank 5imited was officially anno!nced in the year /678 with its

2.1Visi *$

Become the dominant 9n!mero !no: bank in 4erala and a leading player in target markets. Be the ;tr!sted& partner of choice for target (+ ., Retail, "RI) c!stomers. Be a c!stomer3centric organi-ation setting the benchmarks for service. Offer innovative yet simple prod!cts s!pported by the state3of3the art technology. %ave a dynamic and energi-ed workforce with a strong sense of belonging. <eliver top tier financial performance and s!perior val!e to stakeholders. Be a role model for corporate governance and social responsibility

2.2Missi *
6

<evote balanced attention to the interests and e,pectations of stakeholders, and in partic!lar= Shareh "!ers$ $chieve a consistent ann!al post3ta, ret!rn of at least 1>? on net worth. Em+" yees$ <evelop in every employee a high degree of pride and loyalty in serving the Bank. Cust mers$ eet and even e,ceed e,pectations of target c!stomers by delivering

appropriate prod!cts and services, employing, as far as feasible, the single3window and 173ho!r3seven3day3week concepts, leveraging strengthened branch infrastr!ct!re, $T s, and other alternative distrib!tion channels, cross3selling a range of prod!cts and services to meet c!stomer needs varying over time, and ens!ring the highest standards of service at all times. <evelop, adopt, and review a well3conceived b!siness plan for achieving realistic targets of growth, profitability, and market share over the medi!m term. Operate within a well3defined, diversified, risk profile and adopt pr!dent risk3 management norms and processes and effective control practices. .mploy and leverage appropriate modern information technology to= enhance the (!ality, speed, and acc!racy of prod!ct@service deliveryA provide ;anytime3anywhere& banking facilityA strengthen management information and control systems and processesA improve prod!ctivityA and red!ce costs. Increase awareness of the B2ederal BankB brand among targeted c!stomer gro!ps thro!gh cost3effective marketing. $dopt a rob!st corporate governance code emphasi-ing a high degree of professionalism of the Board and the management, and acco!ntability and disclos!re to shareholders. <ecentrali-e decision making with acco!ntability for decisions made, and assign
7

cascading profit responsibilities to middle and )!nior management.<evelop a cond!cive and transparent work environment that fosters staff commitment, competence, initiative, innovation, teamwork and service3orientation. &uture$ 'e are the fo!rth largest bank in India in terms of capital base and can easily boast of a *apital $de(!acy Ratio of /8.1C ?, one of the highest in the ind!stry. This along with the e,istence in a highly reg!lated environment has helped the bank to tide over the recession with minim!m impact to its financial stability. In fact we have been e,panding organically over the past few months. 'e believe in e,tending o!r reach to o!r c!stomers by making o!r services available to all, 17,8. 'e have Branches and $T s across India in addition to the Representative Office at $b! <habi that serves as a nerve centre for the "RI c!stomers in D$.. 'e are transforming o!rselves, keeping o!r principles in tact, into an organisation that offers service beyond par.Being in the service ind!stry we are conscio!s of o!r s!rro!ndings and what happens in the society. O!r 5arge *orporate team offers c!stomi-ed str!ct!red prod!cts to meet the speciali-ed re(!irements of corporates, instit!tions and b!siness clients. .ach member of o!r *orporate 2inance team brings with him a wealth of transaction e,perience across transaction varieties and sectors to cater to yo! better. 'e have emerged as one of the leading private sector banks in the co!ntry, in providing a gam!t of prod!cts for ind!stry, trade and infrastr!ct!re sectors. 'e serve a wide range of c!stomers across varying ind!stries, segments and regions.

2.,%r !ucts a*! Services

Term ' a*s 'e can str!ct!re credit sol!tions to meet yo!r specific short3term or long term f!nding re(!irements. 'e provide str!ct!red term financing sol!tions for infrastr!ct!re, pro)ect f!nding, real estate and other corporate p!rposes. The loans are provided at competitive rates and are str!ct!red to enhance yo!r profitability by sched!ling the repayment to match the cash flow available to repay the debt. C r+ rate ' a*s 2or a variety of b!siness related p!rposes to corporates - r.i*# ca+ita" /i*a*ce 'e offer working capital finance by way of cash credit, overdraft or working capital loans s!itably str!ct!red to yo!r needs and yo!r risk profile as a part of consorti!m or as a sole banker. These prod!cts are designed to ease the li(!idity position of the client. Bi"" &i*a*ce Trade finance by disco!nting bills .,portE import finance
9

#re and post shipment finance, forward covers, b!yer&s credit and finance in foreign c!rrency. 'etter / Cre!it 'e provide for opening inland and import letter of credit facility to facilitate proc!rement of inventory and capital goods. Ba*. 0uara*tees 'e offer to iss!e vario!s types of g!arantees 3 performance, financial, bid bond etc. O!r g!arantees are well accepted by government agencies, *apital ma)or corporate arket $gencies and all

2.1 Vari us /acets / 2a*.i*#.

(! +t 2est i*!ustry +ractices.

10

<evelop, adopt, and review a well3conceived b!siness plan for achieving realistic targets of growth, profitability, and market share over the medi!m term.

Operate within a well3defined, diversified, risk profile and adopt pr!dent risk3 management norms and processes and effective control practices.

.mploy and leverage appropriate modern information technology to= enhance the (!ality, speed, and acc!racy of prod!ct@service deliveryA provide ;anytime3 anywhere& banking facilityA strengthen management information and control systems and processesA improve prod!ctivityA and red!ce costs.

Increase awareness of the B2ederal BankB brand among targeted c!stomer gro!ps thro!gh cost3effective marketing.

$dopt a rob!st corporate governance code emphasi-ing a high degree of professionalism of the Board and the management, and acco!ntability and disclos!re to shareholders.

<ecentralise decision making with acco!ntability for decisions made, and assign cascading profit responsibilities to middle and )!nior management.

<evelop a cond!cive and transparent work environment that fosters staff commitment, competence, initiative, innovation, teamwork and service3 orientation.

,.1 C r+ rate Ba*.i*# +erati *s$

11

The bank mostly lend against appropriate tangible sec!rities s!ch as deposits, shares, debent!res, proprety,g!arantees, s!pported by tangible sec!rities, life policies, goods, gold or other precio!s metal. The bank may also lend against intangible sec!rities s!ch as !ns!pported g!arantees or assignment of s!ms d!e to the borrower by the third parties. It is essential that the bank follows the proper proced!res in order to obtain good title when taking a sec!rity. There is a difference between possession and ownership. The vario!s forms of doc!ments !sed for obtaining different types of sec!rities are also important. Inade(!ate doc!mentation may well ca!se the losses to the bank and is partic!larly time for the Trade 2inancing doc!mentation and the sec!rities agreement relating to goods. <oc!ments are primary evidence. If any laccina is fo!nd in doc!mentation, this will )eopondi-e the interest of the bank and may even adversely affect the right of recovery of the doc!ments e,ec!ted properly and correctly. 2!rther, the doc!ments sho!ld be stamped, wherever re(!ired. The bank m!st also follow proper proced!res to realise sec!rities otherwise losses may be inc!rred. The corporate operations divisions are normally responsible for maintaining sec!rities otherwise losses may be inc!rred. The corporate operations divisions are normally responsible for maintaining sec!rities doc!mentation and !pdating the c!stomer&s mandates with fresh acco!nt doc!mentation acco!nt statements, financial statements and relationship reviews. %andling and treatment of delin(!ent acco!nts is also an important area of operations. Frading of bad and do!btf!l debts for an effective delin(!ency policy is essential to avoid !nnecessary financial losses.

12

,.2C3(N0IN0 &(CTS O& COR%OR(TE B(N)IN0 STR(TE04$


$s a res!lt of the advent of the internet banks and other financial inst!tions are rethinking their corporate banking strategy. The internet opens a new channel for delivering services to corporate clients and helps these instit!tions remove c!mbersane and e,pensive paper process. It is significantly cheaper and m!ch more fle,ible. 'ith the internet, large m!ltinational companies that always !sed .<I(.lectronic <ata Interchange) can save more money by eliminating the old systems, e,pensive private networks and e,pand reach to incl!de more b!siness on the s!pply chain. +mall to medi!m si-e companies, too, can cond!ct b!siness to b!siness transactions. The internet simply provides a two way electronic linkage that never e,isted before. +o, banks can now offer tr!sted sol!tions to their corporate c!stomers via the low cost delievery channel. i.e, The I"T.R".T. $nd corporations will en)oy the ability to manage cash held by their strategic banking partners in real time. Gia a sec!re, efficient, web3enabled comm!nication system. The e,pected shift in vol!me from paper3 based transactions to electronic ones wo!ld determine the path of f!t!re technology investments in banks and orient it towards electronic payment delivery systems. This shifts is also driven by 9B$"4+: perceptation that electronic transactions contrib!te higher

13

,.,IM%ORT(NCE O& &EE5B(SED SERVICES

<ereg!lation and new technology have eroded banks& comparative advantages and made it easier for non3bank competitors to enter into hitherto e,cl!sive banks& domains. In response, banks have shifted their sales mi, toward non3interest income by selling ;non3bank& fee3based financial services by charging e,plicit fees for services. $ccording to another st!dy titled ;2ee3Based 2inancial +ervices

arkets= "ew

Opport!nities and Threats In the Internet $ge& by 4illen $ssociates again, the market for retail and commercial fee3based financial services will e,ceed that for interest3based services by 1>>H, reaching nearly a staggering IH>> billion by 1>>7 globally. Banks want s!ch services to be their primary profit so!rce for certain reasons. This reven!e is more stable over time, ass!res a steady income and more importantly, leads to a strong relationship with the corporate client.

14

,.1T3E (CCOUNT RE'(TIONS3I% M(N(0EMENT$

ME(NIN0$ The acco!nt relationship managers are those who negotiate with

the targeted corporate c!stomers with the terms acceptable to the banks and 9$cco!nt Relationship anagement $cceptance *riteriaB or the so called B*redit F!idelines.B It sho!ld be internally placed and distrib!ted to every credit manager@officer. These g!idelines set the minim!m acceptance standards, in simple words, the g!idelines are aimed to let the acco!nt relationship managers@officers know e,actly what they sho!ld be selling, to whom, at what price and !nder which conditions (sec!rities and other terms).

DECISION M()IN0$ aking a so!nd decision to e,tend credit to a corporate c!stomer is a comple, process. This is beca!se corporate c!stomers are normally engaged in a wide range of activities and are affected by a host of e,ternal and internal factors that have direct impact on their ability to meet financial obligations. The credit decision making sho!ld, therefore, be directed by an internal lending policy that takes into acco!nt s!ch factors and aims to protect the bankJs assets, preserve its rep!tation and optimi-e the relationship profitability. Based on the credit g!idelines, the acco!nt relationship e,ec!tive will have to s!bmit a credit proposal eval!ating the whole relationship. The *redit .val!ation
15

process m!st be done systematically and within acceptable standards to maintain a high (!ality credit portfolio. The preparation of the credit proposal m!st be g!ided by common sense and sensible )!dgement. The amo!nt of details the proposal sho!ld contain nat!rally depends on several elements, namely the si-e and strength of the c!stomer, the si-e of the bankJs c!rrent and proposed e,pos!re, the socio political environment, the economy, the ind!stry and the bankJs position in relation to other.

CREDIT EV('U(TION$ The bank m!st place a system of credit eval!ation which is based on assessment of historical, c!rrent and pro)ected elements stated here!nder=

a. &IN(NCI(' (N('4SIS$ +ales, #rofitability, #erformance, 2!nds 2low, working *apital balance sheet conditions...etc anagement, li(!idity,

2. O%ER(TIN0 (N('4SIS 6O%ER(TIN0 RIS)S7 Owners, anagement, *ompany, Ind!stry, arkets. In s!mmary, the credit proposal

(review) m!st highlight the 2inancial Risks and Operating Risks. It sho!ld state the magnit!de and likelihood of s!ch risks i.e. B'hat ifB scenarios, and how will they be managedK BInstr!ction ost global banks maintain their credit eval!ating standards in an internal an!alB containing the bankJs management instr!ctions regarding each and

every aspect of the credit e,tension or review process. It sets the management standard of credit eval!ation to eliminate risks and prevent the decline in profit margins on credit facilities.
16

,.8 COR%OR(TE SERVICES %ROVIDED B4 INDI(N B(N)S

ME(NIN0$ *orporations, the world over are )ettisoning anti(!ated cash management practices and opting to p!t in place sophisticated cash management str!ct!res to garner the associated economic benefits and d!e to reasons of e,pediency.

*onversely, banks have taken note of the enormo!s reven!e potential in the fee3based services segment to prop !p their sagging bottom lines. 'hile appreciating the initiatives taken by the $dministrative +taff *ollege of India in organi-ing the 'orkshop. The some of the relevant iss!es, which the banks need to address are as follows. OBJECTIVE O& C(S3 M(N(0EMENT$ The f!ndamental ob)ective of cash management is ;optimi-ation of li(!idity thro!gh an improved flow of f!nds.& In today&s highly competitive environment, where time is considered as money, deployment of staff to render basic ro!tine tasks does not make economic sense. $s a se(!el, cash management today is not what it !sed to be. .lectronic banking, which began as a passive desktop access to bank balances, is emerging into comple, processes of li(!idity management thro!gh n!mero!s techni(!es. $lmost all of the corporations in advanced co!ntries are now planning to !se the services of banks to help them collect payments on monthly bills they iss!e to cons!mers and other types of cash management services.

17

IM%ORT(NCE O& C(S3 M(N(0EMENT &OR ( COR%OR(TE ENTIT4$ Food cash management is a conscio!s process of knowing when, where, and how a company&s cash needs will occ!rA knowing what the best so!rces for meeting additional cash needsA and being prepared to meet these needs when they occ!r by keeping good relationships with bankers and other creditors. +cientific cash management res!lts in significant savings in time, decrease in interest costs, less paper work and greater acco!nting acc!racy. #roper cash management creates more control over time and f!ndsA provides timely access to informationA enables easy employee related paymentsA s!pports electronic paymentsA prod!ces faster electronic reconciliationA allows for detection of bookkeeping errorsA red!ces the n!mber of che(!es iss!ed and earns interest income or red!ces interest e,pense. *orporations with s!bsidiaries worldwide, can pool everything internationally so that the company can offset the debts with the s!rpl!s monies from vario!s s!bsidiaries. The end res!lt will transform treas!ry f!nction as a profit3centre by optimi-ing cash and p!t it to good !se. *reative and pro3active cash management sol!tions can contrib!te dramatically to a company&s profitability and to its competitive edge. The !ltimate p!rpose of proper management of li(!idity, needless to emphasi-e, is to improve the overall prod!ctivity of f!nds.

18

,.9T4%ES O& C(S3 M(N(0EMENT SERVICES$


The men! of cash management services offered by banks abroad is indeed diverse and tempting. The services broadly fall !nder collection services, <isb!rsement services, Information and control services, services related to .lectronic data interchange (.<I), *ommercial web banking services, +weep services, 2ra!d detection sol!tions, Flobal trade sol!tions and Investment sol!tions. *ollection +ervices accelerate receipt of payments from sales and (!ickly t!rn them into !sable cash in acco!nts. <isb!rsement +ervices make efficient payments by red!cing or eliminating idle balances in company&s acco!nts. Information and *ontrol +ervices receive the data and provide the management capability needed to monitor company cash pict!re, control costs, reconcile and a!dit bank acco!nts, and red!ce e,pos!re to fra!d. 2inancial .lectronic <ata Interchange (.<I) is a comp!teri-ed e,change of payments between a company&s b!siness and its c!stomers and vendors. *ommercial 'eb Banking +ervices give a wide range of services from any Internet connection, which can help streamline banking process (!ickly and efficiently. +weep +ervices maintain li(!idity and increase earnings witho!t having to actively monitor acco!nts and move money in and o!t of them Information reporting sol!tions assist companies, which need to receive acco!nt data that is timely, precise, and easy to access and interested in initiating online transactions. Investment sol!tions help to minimi-e e,cess balances and ma,imi-e ret!rn on

19

C(S3 M(N(0EMENT SERVICES 5 INDI(N SCEN(RIO$

It is apposite to review the Indian scenario in this regard. $s we are well aware, banks& desire for f!nds has lost !nder the onsla!ght of the c!rrent slowdown. <espite the offer of very soft terms corporates are ref!sing to borrow, while bank deposits have been ballooning. *ompelled to service the b!rgeoning liabilities, b!t !nable to lend hastily and allow their non3performing assets ("#$s) to grow, bankers are forced to compete for the handf!l of safe bets among their borrowers. Banks chose to !se the opport!nity to refoc!s their activities, seeking clearly defined identities in terms of services and c!stomer segments. ost of them concentrated on cleaning !p their books by peeling down their "#$s. $ll of them attempted free-ing of costs, improving operational efficiencies, and boosting prod!ctivity.The strategy of the banks, which performed well, is to !se fee3based services to maintain earnings growth.

'ith interest rates falling, non3interest income was, !ns!rprisingly, the fastest3growing component of the banks& total income. 2ee3based activities will complement tho!gh not s!bstit!te the core b!siness of lending .It is gratifying to note that a n!mber of banks in India are offering wide3ranging cash management services to their corporate clients.

$ll the three categories of banks vi-., nationali-ed banks, private banks, and foreign banks operating in India are active in the cash management segment. +BI, #"B, I*I*I Bank, FTB, %<2* Bank, *ent!rion Bank and Gysya Bank, are some of the active Indian banks in this segment.

20

*iti Bank, +tandard *hartered Bank, $B" $mro Bank, B"#, $"L Frindlays and %+B* are the foreign banks operating in India, which are prominent among the cash management services providers. *!rrently, the t!rnover of cash management services in Indian market is estimated over Rs.1H, >>> crore per month.

+tate Bank of India alone is estimated to handle over Rs./1,>>> crore per month thro!gh its prod!ct called +BI32$+T. Indian banks are offering services like .lectronic f!nds transfer services, provision of cash related I+ reports, cash pooling services, collection services, debit transfer services, g!aranteed credit arrangements, sweep prod!cts, ta, payment services, receivables and payables management. 2oreign banks operating in India are offering regional and global treas!ry management services, li(!idity management services, card services, electronic banking services, e3commerce sol!tions, acco!nt management services, collection management services, cash delivery management services and investment sol!tions.

The cash management services offered to Indian corporate are comparable to what their co!nterparts are getting in advanced co!ntries. Banks reali-ed that if they do not offer the services re(!ired by corporate c!stomers it wo!ld res!lt in a net loss of clientele, ret!rns and goodwill. Banks in India need to contin!o!sly monitor international trends in innovations taking place in providing cash management services and swiftly offer similar services to their corporate clients.

21

RESERVE B(N)S INITI(TIVE IN C(S3 M(N(0EMENT The Reserve Bank of India has been taking a n!mber of initiatives, which will facilitate the active involvement of commercial banks in the sophisticated cash management segment. One of the pre3re(!isites to ens!re faster and reliable mobility of f!nds in a co!ntry is to have an efficient payment system. *onsidering the importance of a rob!st payment system to the economy, the RBI has taken n!mero!s meas!res since mid .ighties to strengthen the payments mechanism in the co!ntry.

Introd!ction of comp!teri-ed settlement of clearing transactions, !se of

agnetic Ink

*haracter Recognition ( I*R) technology, provision of inter3city clearing facilities and high val!e clearing facilities, .lectronic *learing +ervice +cheme (.*++), .lectronic 2!nds Transfer (.2T) scheme, <elivery vs. #ayment (<v#) for Fovernment sec!rities transactions, setting !p of Indian 2inancial "etwork (I"2I".T) are some of the significant initiatives which highlight the serio!sness with which the Reserve Bank has taken !p the reforms in #ayment systems. Introd!ction of a *entrali-ed 2!nds anagement +ystem (*2 +), +ec!rities +ervices +ystem (+++), Real Time Fross +ettlement +ystem (RTF+) and +tr!ct!red 2inancial essaging +ystem (+2 +) are the top priority items on the agenda to transform the e,isting systems into a state3of3the3art payment infrastr!ct!re in India by the Reserve Bank. The c!rrent vision envisaged for the payment systems reforms is one, which contemplates linking !p of at least all important bank branches with the domestic payment systems network thereby facilitates cross boarder connectivity. 'ith the help of the systems already p!t in place in India and which are coming into being, both banks and corporates can e,ercise effective control over the cash management.

22

SOURCIN0 C(S3 M(N(0EMENT SERVICES It is normally the client3bank relationship, which is a main consideration in choosing a bank for cash management. #ricing, obvio!sly, is a very dominant factor . aking a choice between the local banks and the more highly priced foreign banks !s!ally depends on how cost savings are presented by the banks. creative sol!tions !ltinational corporates with comple, treas!ry operations admire their respective banks& e,pertise and ability to offer 2le,ibility, reliability, sec!rity and stability have been cited as vital parameters for any electronic banking system. The systems sho!ld be tailored to provide pertinent reports and the ability to !pgrade easily in f!t!re. The technology sho!ld allow real3time cash partners. It sho!ld integrate easily management with strategic banking

with legal framework in place. It sho!ld lower

operating costs and resolve disp!tes (!ickly by providing sec!re and legally enforceable a!dit trails. It sho!ld be capable of red!cing risk of fra!d in electronic f!nds transfers and other treas!ry activities. It sho!ld also be able to !se a low3cost p!blic network infrastr!ct!re like Internet, which eliminates the need for dedicated leased lines. C3(N0IN0 C(S3 M(N(0EMENT %ROCESSES (ND :E5B(N)IN0;$

I""OG$TIO"+= The enlightened participants in this 'orkshop are aware that the cash management techni(!es have been !ndergoing a metamorphosis as a res!lt of the e,tensive technological advancements. #ositioning finance as a val!able part of a b!siness organi-ation means re3engineering of b!siness processes.

.lectronic Bill #resentment and #ayment (.B##) is now widely accepted in 'estern
23

co!ntries. It replaces the slow and costly process of preparing and mailing paper bills and receiving che(!es as payment. *orporations look to electronic bill presentment and payment as an opport!nity to e,pand marketing and sales efforts, enhance c!stomer care and increase efficiency, while red!cing costs. $s technologies evolve with ama-ing speed, the IT choices facing treas!rers are becoming more intricate sim!ltaneo!sly increasing their e,pectations too. Today, a m!ltinational company has tall demands from its banker. 'hen the treas!rer sits at his desk, he e,pects that his comp!ter has to a!tomatically !pdate his files with real3time information on the company&s acco!nt balances. 'itho!t moving, he wants to mane!ver f!nds between acco!nts to capt!re more interest from pooled acco!nts, he demands to lag his payments to mak his cash work to the f!llest and he desires to get an !p3to3date report on the progress of his collections.

$s the Internet e,plodes into life, companies want to be among the first to !se the Internet to market their prod!cts, receive orders, deal with s!ppliers and settle transactions *orporates vis!ali-e technology as a tool to c!t their costs and improve efficiency.

COR%OR(TE C(S3 M(N(0EMENT TO BENE&IT &ROM E'ECTRONIC %(4MENTS$

24

The new electronic payment prod!cts and services offer the corporate clients an improved bottom line by helping manage cash re(!irements. It helps corporate to make the best !se of their f!nds and provides an effective means of managing their financial re(!irements +everal of the trends in cash flow forecasting favor the !se of electronic payment prod!cts like RTF+, .lectronic 2!nds Transfer (.2T) and card payments. Improved technology and systems integration makes it more attractive to !se electronic payment prod!cts beca!se these methods of payment can be incorporated into firm3wide comp!ting systems. The new forecasting techni(!es also s!ggest !se of electronic payments, beca!se they offer disaggregated reven!e and spending data that can easily be categori-ed and st!died. .lectronic payments and cards provide control over incoming f!nds, and allow companies to limit access to these f!nds to a!thori-ed parties. In addition, limiting corporate p!rchases to electronic payments makes it easier for firms to monitor cash o!tflows and prevent !na!thori-ed e,pendit!res, beca!se these payments are easier to doc!ment and provide an a!dit trail.

2rom the perspective of a *orporate, the electronic payment systems ens!re speed and sec!rity of the transaction processing chain, from verification and a!thori-ation to clearing and settlement. $lso it gives a great deal of freedom from more costly labor, materials, and acco!nting services that are re(!ired in paper3based processing, better management of cash flow, inventory, and financial planning d!e to swift bank payments.

25

C3(''EN0ES TO COM%(NIES IN (V(I'IN0 TEC3NO'O045ORIENTED C(S3 M(N(0EMENT SERVICES &ROM B(N)S$


a. E"ectr *ic C mmu*icati * <ith a Ba*.$ The first challenge facing a treas!ry is how to comm!nicate electronically with a bank, altho!gh this is often dictated by cost limitations, sec!rity concerns and the infrastr!ct!re pec!liarities of different co!ntries. It is likely that the company itself may be lacking the necessary e,pertise to choose an appropriate form of comm!nication where the company needs banker&s advice.

2. Ec * mic C *si!erati *s$ *osts associated with the new services do pose a challenge to small and medi!m companies. $ host3to3host connection is a sophisticated, direct, two3way link between the bank&s and the c!stomer&s comp!ters, which is e,pensive to set3!p and maintain. %owever, it is highly a!tomated and allows the corporate to !se more of the banks& services. +mall companies, !nfort!nately, may not be able to afford host3to3host connection. *oncerns associated with high costs may be effectively addressed once the Internet&s sec!rity apprehensions have been resolved.

c. Decisi *s Re#ar!i*# S urci*# / S /t<are$ The three so!rces of software applications for on3line banking and on3line cash management in partic!lar are 5arge banks prefer to b!ild applications in3ho!se owing to their belief that it provides them with competitive advantage Bo!ght from independent software vendors=
26

,.='IMIT(TIONS O& T3E SERVICES$


$ll said and done, the Internet as it operates today has its limitations as a medi!m for banking and finance. 2or this reason, the conventional means of delivering electronic banking services will be maintained in parallel with on3line systems at least in the medi!m term. 'e all agree that the technology is only as good as its !nderlying services. There is no s!ch thing as one3si-e3fits3all when it comes to electronic banking prod!cts. "o one prod!ct can provide an absol!te sol!tion to all the c!stomers. $n electronic banking prod!ct is a means of delivering banking services to the c!stomer and is only as good as all the operations and processes that !nderpin those services.

1. %r visi * / CMS 2y Ba*.s 5 Cha""e*#es a*! Issues$

The conventional formal line between treas!ry and control and between cash and acco!nting strategies is fading. "ow, bankers and controllers are working together closely in seeking sol!tions in the comple, cash management f!nction. In today&s world, the key differentiator between a s!ccessf!l bank and other bank is the stress each lays on technology. $s s!ch, let me t!rn yo!r attention to the n!mero!s challenges bankers need to address s(!arely, while gearing !p to provide cash management services in a technology dominated environment.

2. %r visi * / Cust mi>e! Services$


27

One important ingredient of a treas!ry system is ;c!stomi-ation&. Bank&s ability to c!stomi-e a treas!ry system is critical. The ;!ser interface& is very personal and !sers want to be comfortable with the look and feel of the system. "ew system <eployment, config!ration and database options need to be fle,ible. (.R#) and other corporate systems.

sho!ld be capable of easily getting synchroni-ed with enterprise reso!rce planning

,. Nee! t C m+rehe*! the C"ie*t;s 'i*e / (ctivity$

Bankers need to really !nderstand the acco!nting and control side of its client b!siness. The bankers sho!ld see themselves as strategic partners in company&s growth and need to spend a lot of time learning abo!t the concerned ind!stry. ' They have to !se that knowledge to propose sol!tions that never wo!ld have occ!rred to the client 1. %r visi * / Other (!vis ry Services t C"ie*ts$ *ompanies wo!ld like to see banks solve certain other related problems. 2or instance, a company may like someone to tell it e,actly what is wrong with their I+ department. *hanging systems is a ma)or initiative with far3reaching implications to the companies so banker cannot afford to make a mistake. $s the technology changes almost monthly, companies do e,pect bankers to tell them what to do and where to spend their money. Bankers cannot b!ild a standard sol!tion always, beca!se the c!stomers do not pose standard problems

8. Shi/t t -e25e*a2"e! Services$

28

'eb3enablement may be fashionable, b!t what treas!rers really want is the f!nctionality in prod!cts that help them perform optimally. $fter all, the web is only a delivery channel. ost corporate electronic banking systems c!rrently !sed are based on old technology architect!re.

9. S+ecia" C *si!erati * t Sma"" a*! Me!ium C m+a*ies$

'hen the corporate scene in India is dominated by a m!ltit!de of small and medi!m companies, a legitimate (!estion that arises is, are the high3tech banking cash management services )!st for the large companies or do they have any immediate practical val!e for smaller companies alsoK

$ltho!gh technology and si-e may not go together banks have to cost3)!stify the cash management services companies !se. "o do!bt, banks did invest a lot in the technology3based services. B!t with the advent of the Internet and other tools, banks sho!ld strive to make accessible cash management services to middle and small companies witho!t totally phasing o!t their e,isting hardware.

=. Nee! t - r. as a Team$

29

'hen banks develop cash management sol!tions, they have to necessarily work directly with corporate financial controllers and their staff. 'hen o!tso!rcing is involved, with something as comple, as payables or receivables the corporate teams get bigger and more varied. Besides financial controllers, banks have to work with systems people and sometimes marketing people.

?. Nee! t - r. <ith Tech* " #y Ve*! rs$ $ growing n!mber of non3bank vendors also offer payment3related services to corporate clients in 'estern co!ntries. Banks bring the strong relationships with c!stomers that they have b!ilt over time. "o single player can do it alone in the f!t!re beca!se there are so many dimensions to technology and different ind!stries need different sol!tions. $lliances will have to be forged, so that vendors with different technological pieces will work together to provide integrated sol!tions.

,.?-OR)IN0 C(%IT(' &IN(NCE


30

ME(NIN0$ 'orking *apital facility is provided to the ind!stry to finance day3to3day prod!ction M sales. 2or prod!ctionA f!nds are generally re(!ired for p!rchase of raw materials, stores, f!el, for payment of labor, power charges, for storing finished goods till they are sold o!t M for financing the sales by way of s!ndry debtors @ receivables.

*ash *redit facility is granted to the c!stomers to bridge working capital gap. The Bank also provides short term loan facility for a period of !p to / year for the p!rpose of bridging temporary cash flow mismatches arising d!e to vario!s reasons like non3 reali-ation of receivables in time, ro!tine cape, etc. The finance e,tended !nder this category wo!ld be for meeting the f!nds re(!irements for day to day operations of the !nits i.e., to meet rec!rring e,penses s!ch as ac(!isition of raw material, the vario!s e,penses connected with prod!cts, conversion of raw materials into finished prod!cts, marketing and administrative e,penses, etc.. The working capital limits wo!ld be considered only after the pro)ect nearing completion and after ens!ring f!ll tie3!p of the term loan re(!irements of the borrower. These limits wo!ld be either in the form of fi,ed loans or r!nning acco!nts and @ or bill financing facility.

SECURIT4$

31

The credit facilities shall be sec!red by inventories and debtors as may be re(!ired (!ant!m and d!ration of the credit and risk perception.

)E4 BENE&ITS$

2!nded facilities, i.e. the bank provides f!nding and assistance to act!ally p!rchase b!siness assets or to meet b!siness e,penses. "on32!nded facilities, i.e. the bank can iss!e letters of credit or can give a g!arantee on behalf of the c!stomer to the s!ppliers, Fovernment <epartments for the proc!rement of goods and services on credit. It is $vailable in both Indian as well as 2oreign c!rrency. 'IMIT(TIONS O& -OR)IN0 C(%IT(' &IN(NCE$

The working capital limits wo!ld re(!ire s!ch sec!rity and personal@ third party g!arantees as applicable to general lending norms of the bank and risk perception in respect of individ!al borrowal acco!nt.

.ligible 'orking *apital 5imits wo!ld be assessed by adopting vario!s methods s!ch as #ro)ected T!rnover and "et Owned 2!nds ethod, #ermissible Bank 2inance ethod, *ash B!dget ethod ethod, depending !pon the type of borrower, the aggregate

working capital facility en)oyed from the banking system, the scale of operation, nat!re of activity@enterprise and the d!ration@ length of the prod!ction cycle, etc.

RBI 0UIDE'INES ON 'O(N &OR -OR)IN0 C(%IT(' %UR%OSE$


32

In t!ne with the Reserve Bank of India g!idelines on 5oan +ystem for delivery of bank *redit for working capital p!rposes to larger borrowers, the same wo!ld be e,tended in the form of fi,ed loan (working capital <emand loan) and cash credit (r!nning acco!nt) in the ratio of N>=7> in respect of borrowers en)oying aggregate working capital limits of Rs./> crore and above from the Banking system.

The working capital demand loan facility shall be for a minim!m fi,ed term of 8 days s!b)ect to roll over at the option of the borrower concerned

S3ORT

TERM

COR%OR(TE

&IN(NCE

MET3ODS

O&

'ENDIN0$

5ike many other activities of the banks, method and (!ant!m of short3term finance that can be granted to a corporate was mandated by the Reserve Bank of India till /667. This control was e,ercised on the lines s!ggested by the recommendations of a st!dy gro!p headed by +hri #rakash Tandon. The st!dy gro!p headed by +hri #rakash Tandon, the then *hairman of #!n)ab "ational Bank, was constit!ted by the RBI in O!ly /687 with eminent personalities drawn from leading banks, financial instit!tions and a wide cross3section of the Ind!stry with a view to st!dy the entire gam!t of BankJs finance for working capital and s!ggest ways for optim!m !tili-ation of Bank credit. This was the first elaborate attempt by the central bank to organi-e the Bank credit. The report of this gro!p is widely known as Tandon *ommittee report. ost banks in India even today contin!e to look at the needs of the corporates in the light of methodology recommended by the Fro!p. $s per the recommendations of Tandon *ommittee, the corporates sho!ld be disco!raged from acc!m!lating too m!ch of stocks of c!rrent assets and sho!ld move towards very lean inventories and receivable levels. The committee even s!ggested the

33

ma,im!m levels of Raw corporate operating in

aterial, +tock3in3process and 2inished Foods which a an ind!stry sho!ld be allowed to acc!m!late.

These levels were termed as inventory and receivable norms. <epending on the si-e of credit re(!ired, the f!nding of these c!rrent assets (working capital needs) of the corporates co!ld be met by one of the following methods=

&IRST MET3OD O& 'ENDIN0$ Banks can work o!t the working capital gap, i.e. total c!rrent assets less c!rrent liabilities other than bank borrowings (called a,im!m #ermissible Bank 2inance or #B2) and finance a ma,im!m of 8H per cent of the gapA the balance to come o!t of long3term f!nds, i.e., owned f!nds and term borrowings. This approach was considered s!itable only for very small borrowers i.e. where the re(!irements of credit were less than Rs./> lacs

SECOND MET3OD O& 'ENDIN0$

Dnder this method, it was tho!ght that the borrower sho!ld provide for a minim!m of 1H? of total c!rrent assets o!t of long3term f!nds i.e., owned f!nds pl!s term borrowings. $ certain level of credit for p!rchases and other c!rrent liabilities will be available to f!nd the b!ild !p of c!rrent assets and the bank will provide the balance ( #B2). *onse(!ently, total c!rrent liabilities incl!sive of bank borrowings co!ld not e,ceed 8H? of c!rrent assets. RBI stip!lated that the working capital needs of all borrowers en)oying f!nd based credit facilities of more than Rs./> lacs sho!ld be appraised (calc!lated) !nder this method. T3IRD MET3OD O& 'ENDIN0$

34

Dnder this method, the borrowerJs contrib!tion from long term f!nds will be to the e,tent of the entire *OR. *DRR."T $++.T+, which has been defined by the +t!dy Fro!p as representing the absol!te minim!m level of raw materials, process stock, finished goods and stores which are in the pipeline to ens!re contin!ity of prod!ction and a minim!m of 1H? of the balance c!rrent assets sho!ld be financed o!t of the long term f!nds pl!s term borrowings. (This method was not accepted for implementation and hence is of only academic interest)

35

,.@EAIM B(N)
.,port3Import Bank of India is the premier e,port finance instit!tion of the co!ntry, set !p in /6P1 !nder the .,port3Import Bank of India $ct /6P/. Fovernment of India la!nched the instit!tion with a mandate, not )!st to enhance e,ports from India, b!t to integrate the co!ntry&s foreign trade and investment with the overall economic growth. +ince its inception, .,im Bank of India has been both a catalyst and a key player in the promotion of cross border trade and investment. *ommencing operations as a p!rveyor of e,port credit, like other .,port *redit $gencies in the world, .,im Bank of India has, over the period, evolved into an instit!tion that plays a ma)or role in partnering Indian ind!stries, partic!larly the +mall and edi!m .nterprises, in their globalisation efforts, thro!gh a wide range of prod!cts and services offered at all stages of the b!siness cycle, starting from import of technology and e,port prod!ct development to e,port prod!ction, e,port marketing, pre3shipment and post3shipment and overseas investment.

EAIM &IN(NCE )E4 BENE&ITS$ E//icie*t service t ur im+ rterBex+ rter c"ie*ts.

*onnectivity with the *!stoms <epartment to facilitate payment of c!stom d!ty and receipt of d!ty draw back by the importer@e,porter clients thro!gh the electronic media. Dnder this system of .lectronic <ata Interchange (.<I), *!stom $!thorities process the shipping bills and also effect on line payment of d!ty drawback for e,porters. 2!rther, they !ndertake processing of Bill of .ntry and deposit of c!stom d!ty for imports. EAC3(N0E E(RNERS &OREI0N CURRENC4 6EE&C7 DE%OSITS SC3EME$

36

The .,change .arners 2oreign *!rrency (..2*) <eposits +cheme was started by RBI in the year /661 with the introd!ction of 5iberali-ed .,change Rate +ystem. Dnder this scheme, the recipient of inward remittances, e,porters and other eligible bodies are allowed to keep a portion of their inward remittances @ e,port proceeds in foreign c!rrency with the banks in India which can later be !tili-edfor permissible p!rposes. SERVICES O&&ERED TO EA%ORTERS$ #re3shipment finance in foreign c!rrency and Indian r!pees.#ost3shipment finance in foreign c!rrency and Indian r!pees. %andling e,port bills on collection basis.O!tward remittances for p!rposes as permitted !nder .,change *ontrol g!idelines. Inward remittances incl!ding advance payments. 0!oting of competitive rates for transactions. aintenance of .,change .arners 2oreign *!rrency (..2*) acco!nts. $ssistance in obtaining credit reports on overseas parties 2orfeiting for medi!m term e,port receivables. anagement

SERVICES O&&ERED TO IM%ORTERS$

.stablishment of Import 5etters of *redit covering import into India and handling of bills !nder 5etter of *redit. %andling of import bills on collection basis. Remittance of advance payment against imports. Offering !tili-ation of #*2* ( pre3shipment credit in foreign c!rrency) for imports.

37

,.1C %ROJECT &IN(NCE

ME(NIN0$ #ro)ect finance is the financing of long3term infrastr!ct!re and ind!strial pro)ects based !pon a comple, financial str!ct!re where pro)ect debt and e(!ity are !sed to finance the pro)ect. Ds!ally, a pro)ect financing scheme involves a n!mber of e(!ity investors, known as sponsors, as well as a syndicate of banks which provide loans to the operation. The loans are most commonly non3reco!rse loans, which are sec!red by the pro)ect itself and paid entirely from its cash flow, rather than from the general assets or creditworthiness of the pro)ect sponsors, a decision in part s!pported by financial modeling. The financing is typically sec!red by all of the pro)ect assets, incl!ding the reven!e3prod!cing contracts. #ro)ect lenders are given a lien on all of these assets, and are able to ass!me control of a pro)ect if the pro)ect company has diffic!lties complying with the loan terms.

SE'ECTION O& ( %ROJECT B4 B(N)$

The proposals for pro)ect finance wo!ld be considered by the bank on a selective basis in view of the larger o!tlay of f!nds an longer d!ration of credit which may have an adverse impact on bankJs $sset35iability anagement system and strain on its li(!idity. Ds!ally s!ch pro)ects wo!ld be operationalised thro!gh consorti!m arrangement along with the Term 5ending 2inancial Instit!tions and other p!blic@ private sector Banks. The pro)ect wo!ld be appraised by the 5ead Bank of the consorti!m and all other banks wo!ld accept the appraisal made by the lead bank. Before e,tending finance for #ro)ects, the economic feasibility and financial viability of the pro)ect in relation to the
38

macro economic conditions prevailing at the time of concept!ali-ation of the pro)ect and also the likely scenario that may prevail d!ring the normal life span of the pro)ect sho!ld be established. The pro)ect sho!ld be able to withstand reasonable levels of variation in cr!cial parameters which sho!ld be established by sensitivity analysis of the cash flows.

The means of finance for the pro)ect along with provisions to meet contingencies s!ch as cost@ time overr!n sho!ld be established. The entire so!rce of f!nds for the pro)ect from so!rces other than that by the promoters shall be f!lly tied3!p before sanction@ disb!rsement of the limits.

'herever the pro)ect is one of !n!s!ally longer d!ration s!ch as infrastr!ct!re development, the involvement of agencies s!ch as 2inancial Instit!tions and ways of red!cing the blockage of bankJs f!nd that are so!rced mainly o!t of short term lending instit!tions, take3o!t financing, sec!riti-ation, Inter3Bank participation *ertificates, etc. wo!ld be resorted to.

The disb!rsements !nder pro)ect 2inance wo!ld be made strictly in t!ne with the sanction terms, only after ens!ring the end !se of f!nds already disb!rsed by the consorti!m, meeting the re(!ired margin at each stage of pro)ect implementation and certification by the competent cons!ltants@ specialists as per the proced!re in vog!e from time to time and as decided by the consorti!m.

39

R(TE O& INTEREST$

The rate of interest on s!ch credit facilities wo!ld be determined based on the borrower gradation and the interest rate policy of the bank from time to time.

SECURIT4$ The credit facilities shall be sec!red by tangible assets and collaterals as may be re(!ired based on the nat!re of pro)ect, (!ant!m and d!ration of the credit, anticipated ret!rn on investment and risk perception.

ST(TE B(N) O& INDI(


40

COR%OR(TE B(N)IN0 O& ST(TE B(N) O& INDI( INTRODUCTION$ +tate Bank of India (+BI) is the largest bank in India. It is also, meas!red by the n!mber of branch offices and employees, the largest bank in the world. .stablished in /P>N as Bank of Bengal, it remains the oldest commercial bank in the Indian +!bcontinent. It provides a range of banking prod!cts thro!gh its vast network in India and overseas, incl!ding prod!cts aimed at "RIs. 'ith an asset base of I/1N billion and its reach, it is a regional banking behemoth. The Fovernment of India nationali-ed +BI in /6HH with the Reserve Bank of India having a N>? stake. +BI has laid emphasis on red!cing the h!ge manpower thro!gh Folden handshake schemes and comp!teri-ing its operations.

BO(RD O& DIRECTORS

41

'ist / Direct rs * the Ce*tra" B ar! / State Ba*. / I*!ia 6(s * 1th (u#ust 2C117

+r. "o. / 1 C 7 H N 8 P 6 />

"ame

<esignation

Dnder +ection of +BI $ct /6HH

+hri #ratip *ha!dh!ri +hri %emant F. *ontractor +hri <iwakar F!pta +hri $. 4rishna 4!mar +hri <ileep *. *hoksi +hri +. Genkatachalam +hri <. +!ndaram +hri #arthasarathy Iyengar +hri F. <. "adaf <r. Ra)iv 4!mar

*hairman anaging <irector anaging <irector anaging <irector <irector <irector <irector <irector Officer .mployee <irector <irector

/6 (a) /6 (b) /6 (b) /6 (b) /6 (c) /6 (c) /6 (c) /6 (c) /6 (cb) /6 (d)

TR(NS&ORM(TION JOURNE4 IN ST(TE B(N) O& INDI(

The +tate Bank of India, the co!ntry&s oldest Bank and a premier in terms of balance sheet si-e, n!mber of branches, market capitali-ation and profits is today going thro!gh
42

a momento!s phase of *hange and Transformation Q the two h!ndred year old #!blic sector behemoth is today stirring o!t of its #!blic +ector legacy and moving with an ability to give the #rivate and 2oreign Banks a r!n for their money.

The bank is entering into many new b!sinesses with strategic tie !ps Q #ension 2!nds, Feneral Ins!rance, *!stodial +ervices, #rivate .(!ity, initiatives having a h!ge potential for growth. obile Banking, #oint of +ale erchant $c(!isition, $dvisory +ervices, str!ct!red prod!cts etc Q each one of these

The Bank is forging ahead with c!tting edge technology and innovative new banking models, to e,pand its R!ral Banking base, looking at the vast !ntapped potential in the hinterland and proposes to cover />>,>>> villages in the ne,t two years.

It is also foc!sing at the top end of the market, on whole sale banking capabilities to provide India&s growing mid @ large *orporate with a complete array of prod!cts and services. It is consolidating its global treas!ry operations and entering into str!ct!red prod!cts and derivative instr!ments. Today, the Bank is the largest provider of infrastr!ct!re debt and the largest arranger of e,ternal commercial borrowings in the co!ntry. It is the only Indian bank to feat!re in the 2ort!ne H>> list. The Bank is changing o!tdated front and back end processes to modern c!stomer friendly processes to help improve the total c!stomer e,perience. 'ith abo!t PH>> of its own />>>> branches and another H/>> branches of its $ssociate Banks already networked, today it offers the largest banking network to the Indian c!stomer. The Bank is also in the process of providing complete payment sol!tion to its clientele with its over

43

1/>>> $T s, and other electronic channels s!ch as Internet banking, debit cards, mobile banking, etc. 'ith fo!r national level $pe, Training *olleges and H7 learning *enters spread all over the co!ntry the Bank is contin!o!sly engaged in skill enhancement of its employees. +ome of the training programs are attended by bankers from banks in other co!ntries. The bank is also looking at opport!nities to grow in si-e in India as well as internationally. It presently has P1 foreign offices in C1 co!ntries across the globe. It has also 8 +!bsidiaries in India Q +BI *apital arkets, +BI*$# +ec!rities, +BI <2%I, +BI 2actors, +BI 5ife and +BI *ards 3 forming a formidable gro!p in the Indian Banking scenario. It is in the process of raising capital for its growth and also consolidating its vario!s holdings. Thro!gho!t all this change, the Bank is also attempting to change old mindsets, attit!des and take all employees together on this e,citing road to Transformation. In a recently concl!ded mass internal comm!nication programme termed ;#arivartan& the Bank rolled o!t over CC>> two day workshops across the co!ntry and covered over /C>,>>> employees in a period of />> days !sing abo!t 7>> Trainers, to drive home the message of *hange and incl!siveness. The workshops fired the imagination of the employees with some other banks in India as well as other #!blic +ector Organi-ations seeking to em!late the programme.

EVO'UTION O& SBI

The origin of the +tate Bank of India goes back to the first decade of the nineteenth cent!ry with the establishment of the Bank of *alc!tta in *alc!tta on 1 O!ne /P>N. Three years later the bank received its charter and was re3designed as the Bank of Bengal (1
44

Oan!ary /P>6). $ !ni(!e instit!tion, it was the first )oint3stock bank of British India sponsored by the Fovernment of Bengal. The Bank of Bombay (/H $pril /P7>) and the Bank of adras (/ O!ly /P7C) followed the Bank of Bengal. These three banks remained at the ape, of modern banking in India till their amalgamation as the Imperial Bank of India on 18 Oan!ary /61/. #rimarily $nglo3Indian creations, the three presidency banks came into e,istence either as a res!lt of the comp!lsions of imperial finance or by the felt needs of local .!ropean commerce and were not imposed from o!tside in an arbitrary manner to modernise IndiaJs economy. Their evol!tion was, however, shaped by ideas c!lled from similar developments in .!rope and .ngland, and was infl!enced by changes occ!rring in the str!ct!re of both the local trading environment and those in the relations of the Indian economy to the economy of .!rope and the global economic framework.

COR%OR(TE B(N)IN0 +BI is a one shop providing financial prod!cts @ services of a wide range for large, medi!m and small c!stomers both domestic and international.

45

The +BI&s powerf!l corporate banking formation deploys m!ltiple channels to deliver integrated sol!tions for all financial challenges faced by the corporate !niverse. The *orporate Banking Fro!p and the "ational Banking Fro!p are the primary delivery channels for corporate banking prod!cts. The *orporate Banking Fro!p consists of dedicated +trategic B!siness Dnits that cater e,cl!sively to specific client gro!ps or speciali-e in partic!lar prod!ct cl!sters. 2oremost among these speciali-ed gro!ps are the *orporate $cco!nts Fro!p (*$F), foc!sing on the prime corporate and instit!tional clients of the co!ntry&s biggest b!siness centers. The others are the #ro)ect 2inance !nit and the 5easing !nit. The "ational Banking Fro!p also delivers the entire spectr!m of corporate banking prod!cts to other corporate clients, on a nationwide platform.

COR%OR(TE (CCOUNTS 0ROU% 6C(07 C(0 5 ( +er/ect strate#ic /it D Mar.et "ea!er ima#e D & cusse! atte*ti *

46

D &"exi2"e E Cust mer 5 /rie*!"y cre!it + "icies D Structure! %r !ucts 5 &u*! 2ase! E /ee 2ase! D Time"yF c m+rehe*sive a*! assure! !e"ivery D C m+etitive +rici*# D 3i#h"y s.i""e! cre!it ex+ertise

C(0 5 SBIGs %r active res+ *se t emer#i*# mar.et *ee!s

*$F is +trategic B!siness Dnit of +BI, set !p e,cl!sively to cater to the specialised banking needs of top corporate clients of the co!ntry. It was the direct o!tcome of +BIJs str!ct!ral reorgani-ation in the light of <ereg!lation, Flobali-ation M 5iberali-ation of the Banking Ind!stry. *reated in the year /66H, *$FJsJJ mission is to= R 2oc!s on top corporate clients R .stablish itself as the most professional o!tfit of its kind in the co!ntry R Render world class and cost effective financial services R .volve new prod!cts on a s!stained basis3c!stomi-ed to the changing needs of the corporate R +tay ahead of competitors C(0 5 ( Sym2 " / exce""e*ce R 0!ality Relationship Banking .,cl!sive, highly skilled Relationship teams of dynamic and motivated personnel, each attending to a select gro!p of top *orporate
47

providing a one3stop3shop for financial services presently at *alc!tta, *hennai and $hmedabad. R <elivered *redit process

!mbai, "ew <elhi,

Only two stage credit process consisting of appraisal and assessment by the Relationship team and sanction by the *redit *ommittee@*entral Board, leading to (!ickest response time in the ind!stry. R Offer of wider and sophisticated prod!cts $part from a variety of core credit prod!cts incl!ding str!ct!red finance and m!lti3p!rpose short term corporate loan, *$F offers an array of c!stomer specific prod!cts like *ash prod!cts and +BI Filts 5td. and other s!bsidiaries of +BI. *$F 3 One point contact $cco!nt anagement Teams will aid yo! in sec!ring any anagement #rod!ct, Treas!ry M 2ore, arkets 5td., erchant Banking prod!cts in association with +BI *apital

prod!ct from any of o!r vario!s associates and s!bsidiaries as listed below 2or leasing re(!irements thro!gh o!r 5easing +BD 5arge +cale #ro)ect 2inance thro!gh #2 +BD *apital arket Re(!irements thro!gh +BI*$#+

CORE CREDIT %RODUCTS

#!rposeType R!pee 5oans

of 5oan

#ricing Based on credit risk rating of the *ompany designed on the lines of

'orking *apital *ash *redit facility

48

internationally accepted models, ranging from o!r #rime 5ending Rate(#5R) !pwards. #ro)ect M *ape, loans edi!m Term 5oans H38 +ame as above 3 years or longer e,ceptional cases .,port *redits #acking *redit, RBI <efined 5IBOR linked and arket <etermined edi!m Term

in 5ending Rate ( T5R)!pwards.

#ostshipment , 2orfaiting 2oreign 5oans #ro)ects M .,ternal

*ommercial 5IBOR linked

*!rrency 'ork. *ap

Borrowings(.*Bs) which incl!de +yndicated loans, +tand3alone loans,B!yersJ*redit loans in all and ma)or +ellerJs *redit, Bilateral c!rrencies.

OT3ER STRUCTURED %RODUCTS

49

TR(DE &IN(NCES

Iss!ance and advising of <omestic and 2oreign 5etters of *redit.

#!rpose

#ricing

+hort Term *orporate 5oans 2or +horing !p "et 'orking *apital, Based on the *redit Ongoing capital e,pendit!re, risk rating 3 Repayment of high cost debt, RM< 5inked to o!r #5R e,pendit!re, implementation of GR+

+ec!ritised

loans3

in Dpfronting of ass!red cash flow Based on risk rating emanating from f!t!re receivables vi-. rentals, Royalties, debtors, 5ease rentals etc.

association with +BI*$#

*hannel branches

2inancing3

in 2inancing of downstream marketing Based on the *redit risk rating 3 5inked to o!r #5R

association with other +BI channels

2ee Based #rod!cts 3 like 2or import of goods incl!ding capital 5arge val!e b!siness 3 5etter #ayment of *redits(5*s), goods participation in international negotiable. <efferred bids, performance g!arantees etc. F!arantees,

F!arantees(<#Fs)

and 5etter of *omfort

50

R R R R R India. R R R R R R R R R R R R

*onfirmation of .,port 5etter of *redit. Iss!ance of F!arantees on behalf of <omestic *!stomers In favo!r of <omestic Beneficiaries and 2oreign Beneficiaries. Iss!ance of g!arantees on behalf of foreign correspondent banks to beneficiary in

<eferred #ayment F!arantees. <omestic and 2oreign Bills disco!nting. +'I2T Interface. (e3Trade +BI) 2ront3end interface (Internet Based) at the c!stomer place. To iss!e 5etter of *redit and handle related bill transactions To iss!e Bank F!arantee To send advice on 5etters of *redit received from others To lodge .,port *ollection Bills To en(!ire stat!s of Trade 2inance transactions 2or negotiation of bills and track negotiated bills 2or $dvance against .,port Bills on *ollection 2or 5odge of Bills where 2!ll $dvance #ayment has been received

51

<elivery #latforms at all N *$F branches having speciali-ation to provide Trade 2inance +ervices, adhering to +i, +igma principles.

'hile +BI is the most widely accepted Indian Bank across the world with

correspondent relationship e,tending to a spectr!m of international banks n!mbering P8N at present o!r 5*s, F!arantees and <#Fs are iss!ed at the most competitive rates. R +BI is the only Indian Bank whose g!arantee is accepted by most of the .,port

*redit $gencies globally witho!t seeking confirmation. R +BIJs *lean M <oc!mentary *ollections are made at most competitive rates

thro!gh o!r Flobal 5ink +ervices. R 'e also provide trade related information to Indian corporates, their overseas

partners@b!yers thro!gh o!r foreign offices.

%RODUCTS (ND SERVICES

+BI O22.R+=3
52

- r.i*# ca+ita" /i*a*ci*# R $ssistance e,tended both as 2!nd based and "on32!nd based facilities to

*orporates , #artnership firms , #roprietary concerns R 'orking *apital finance e,tended to all segments of ind!stries and services sector s!ch as IT

Term ' a*s To s!pport capital e,pendit!res for setting !p new vent!res as also for e,pansion, renovation etc. 'ease &i*a*ce R $n e,cl!sive !nit providing one s shopping to *orporates R $ dedicated set !p specialised in financing of infrastr!ct!re and other large pro)ects R .,cl!sive set !p for handling large ticket leases. R +BIJs #rime 5ending Rates (#5R) are among the lowest R #resently Bank has two #5RJs R +B$R for loans payable on demand and !pto one year R +B T5R for loans payable beyond one year

R 2 Si"ic * %rivate 'imite!

53

C r+ rate Overvie< Robo +ilicon #rivate 5imited commenced operations in the year 1>>/ and is head(!artered in %yderabad, $ndhra #radesh, India. Robo +ilicon, for the first time in India, introd!ced 9man!fact!red sand:. It not only is the perfect s!bstit!te to the precio!s and fast depleting nat!ral reso!rce 3 river sand, b!t is also a viable, cost3effective and eco3friendly prod!ct. In a very short span, Robo+and has earned the respect and patronage of leading Ind!stry, real estate and constr!ction giants in the co!ntry. %aving weathered initial resistance Q a fate common to every innovative idea in a change3resisting environment, Robo+andS has (!ickly fo!nd acceptance and is today preferred by all (!ality3conscio!s constr!ction ind!stry leaders. The pillars of faith stand firmly on Robo+andS beca!se it protects the environment, promotes ethical and legal constr!ction activities and also eliminates the many disadvantages of !sing river sand for p!rposes of constr!ction. $dditionally, !sing Robo+andS in concrete and masonry res!lts in the s!bstantial saving of cement, th!s slashing constr!ction costs considerably.

Robo +ilicon began operations in 1>>/ by setting !p a cr!shing plant and (!arry in %yderabad to s!pply man!fact!red sand to the constr!ction ind!stry. Robo was the first
54

in the co!ntry to introd!ce the concept of man!fact!red sand. .,tensive marketing efforts co!pled with the consistent s!pply made 9Robosand: a generic name for man!fact!red sand in the constr!ction ind!stry. $t the time of ac(!isition, Robo +ilicon had H (!arries.

'ith IG2$, Robo has been rapidly e,panding across India to locations s!ch as Gi-ag, <elhi, Bengal!r!, Oamnagar, #!ne, angalore and <avanagere and is c!rrently the largest organi-ed player in the stone aggregates ind!stry in India. Robo +ilicon has s!ccessf!lly attracted high (!ality talent and b!ilt a deep management team. It is in the process of in)ecting state3of3the3art mining technologies M processes, which will meet global standards for safety and environment protection. Robo +ilicon now has a range of constr!ction materials that are collectively referred to asRobo$ggregates 3 fine and coarse aggregates that confirm to I+ CPC specifications. $ggregates are a component of composite materials s!ch as concrete and asphalt concrete. It is a proven fact that fine and coarse aggregates play a key role when combined with cement in concrete and asphalt (bit!men) for road works. $ggregates are also !sed as base material !nder fo!ndations, roads, and railroads. To p!t it differently, aggregates are !sed as a stable fo!ndation or road@rail base with predictable, !niform properties (e.g. to help prevent differential settling !nder the road or b!ilding), or as a vital e,tender that binds with more e,pensive cement. Identifying a need for Brick and #laster work, Robo +ilicon is pro!d to introd!ce Robo#last3 a blend of specific fine aggregates in >31mm. Robo#last provides complete masonry sol!tions at site and improves workability. It is a ready3to3!se prod!ct that eliminates the sieving process at site thereby saving yo! precio!s time.

I*vest r %r /i"e

55

I*!ia Va"ue &u*! India Gal!e 2!nd (JIG2J) is a premier private e(!ity investment f!nd. It has in e,cess of D+ I / Billion (R!pees 7> billion) !nder management committed by high (!ality Indian and international instit!tional investors and family offices. IG2 makes available financial and intellect!al capital to growing middle3market companies in India. IG2 has invested in promising companies, partnered progress, and has seen s!ccessf!l e,its. In each pr!dently selected investment, IG2 developed resilient partnerships with management teams based on m!t!al respect, integrity, and transparency. This, along with an ability to deliver appropriate s!pport in b!ilding b!sinesses has created great val!e for all stakeholders. IG2 investments incl!de a diverse range of ind!stries s!ch as healthcare, retailing, o!tso!rced services, media M entertainment and precision engineering. Ma*u/acture! Sa*! 5 ( %ers+ective

.vol!tion of 2ine $ggregate Ind!stry in India The attempts to prod!ce cr!shed or man!fact!red sand in India co!ld be traced to early H>Js primarily in ma)or dam works. The foc!s was on !sing different si-e red!ction techni(!es with available reso!rces like rod mills, roller 3cr!shers, and cone cr!shers. The absence of research in the rep!ted *ivil .ngineering Instit!tions abo!t man!fact!red sand aided a lot of !nscr!p!lo!s (!arry operators to perpet!ate the myth that (!arry d!st can be !sed in prod!ction of concrete either by complete or partial replacement of river sand. .arly so!rces of fine M coarse aggregates (1>mm and />mm)=

56

The river sand, pebbles and gravel so!rced from river beds were !sed as fine and coarse aggregates. The ins!fficient (!antities and inconsistent (!ality forced the constr!ction ind!stry to e,plore the possibility of si-ing down the locally available rock formations !sing the cr!shers to prod!ce coarse aggregates of 1>mm and />mm. The type of machinery !sed was single stage cr!shers and later !pgraded to two stage cr!shers. The waste prod!ct generated in the process is (!arry d!st which was being given free in the early days is being offered today as a replacement for river sand.

Emer#e*ce / Ma*u/acture! Sa*! The progress in the b!ilding material research and identification of role of particle shape and gradation of fine aggregates triggered the !se of man!fact!red sand in the prod!ction of concrete. The comple,ity of constr!ction and !se of high strength concrete in large n!mber of b!ildings is the prime mover along with the scarcity of river sand in many cities. Tech*ica" %ers+ective The !se of man!fact!red sand as a replacement for river sand is increasing with the ban on sand mining implemented by different states. The other factors are the general decline in the availability of river sand and press!re from active environmental gro!ps to protect the nat!re. Ur2a* #r <th$
57

The phenomenal rise in the constr!ction activity in the last decade has contrib!ted to the wide gap between the s!pply and demand of river sand. $ lot of damage has been ca!sed to the eco3systems by carrying o!t dredging operations on the sand beds leading to the depletion of gro!nd water levels in the co!ntry. R "e / /i*e a##re#ates i* c *crete$ It is accepted fact that sand plays a very important role in the prod!ction of concrete. The feat!res of workability, strength and d!rability are directly dependent on the properties of the sand !sed in the making of concrete. C *ce+t / ma*u/acture! sa*!$ $ccording to ind!stry reports there is a ma)or shift in the mindset of the *onstr!ction Ind!stry towards e,ploring s!bstit!tes for river sand. $cross the 'orld there is growing s!pport for the increased !se of man!fact!red sand !sed in the prod!ction of concrete. The properties of particle shape, consistent gradation and -ero imp!rities are the reason for the preference by str!ct!ral cons!ltants and concrete technologists. The imperative need for clean sand, eliminating the constraints of river sand like availability, price fl!ct!ation etc, have made man!fact!red sand the perfect s!bstit!te for river sand. Ma*u/acturi*# +r cess a*! its sta*!ar!s$ The sand is man!fact!red in a three stage cr!shing process. The raw material is either granite or basalt rock. The G+I which is also referred as sand making machine is in the Tertiary +tage. The process adopted is similar to the river sand generation by nat!re. The G+I applies the principle of rock on rock collision at a high velocity shaping the sand particles. The plant works on the principle of contin!o!s feed in closed circ!it and adopts the techni(!e synonymo!s and comparable to nat!reJs prod!ction of river sand. The

58

complete man!fact!ring process takes min!tes when compared to the nat!re which happens over millions of years. The prod!ct is prod!ced to I+ CPC standards. %r cess O!r (!arrying process typically begins with drilling and blasting the rock into smaller pieces. Bore holes are drilled in the blast site and filled with e,plosives. The blast breaks !p the rock into smaller pieces that are loaded and ha!led to the plant. The plant consists of three circ!its namely #rimary circ!it, +econdary circ!it and Tertiary circ!it wherein a three3stage cr!shing takes place. $ H>> mm down si-e granite rock that is bro!ght from the (!arry via operations which involve (deleted ;involves&) drilling, blasting, segregation, secondary breaking and transportation to the plant, is fed into to the #rimary *irc!it consisting of one Oaw *r!sher that si-es down this granite rock to prod!ce /H>mm down si-e aggregate. This /H> mm down si-e rock is fed into the +econdary *irc!it consisting of one *one *r!sher to prod!ce a 7> mm down si-e aggregate which in t!rn is fed into the Tertiary *irc!it consisting one Gertical +haft Impactor that prod!ces +and and $ggregate of the re(!ired Fradation M +hape. The installed capacity of the plant is 1>> T#% (Tons@%r.) of Robo+and and Robo shaped $ggregate of 1> mm M /> mm si-e.

%"a*t E Machi*ery

59

The river sand, pebbles and gravel so!rced from river beds were !sed as fine and coarse aggregates. The plant works on the principle of contin!o!s feed in closed circ!it River sand is prod!ced by flowing of stones in big floods from mo!ntains to streams to big rivers by the coll!sion of rock3on3rock thereby forming a mechanism of impact3 clearage3attrition3abrasion by which h!ge deposits are created The Gertical +haft Impactor applies a similar principle of rock3on3rock coll!sion for cr!shing The Barmac Rock3on3Rock Impactor !ses a feild proven rock lined rotor that acts as velocity stone h!rling a contin!o!s rock stream into a tightly packed rock lined cr!shing chamber

60

The rotor contin!o!sly discharges energi-ed stone particles into a highly t!rb!lent particle clo!d contained within the cr!shing chamber where red!ction occ!rs primarily by Rock3on3Rock impact, attrition and abrasion

Th!s the process is very synonymo!s to nat!res process of creating san

Hua"ity Testi*#

The +ieve $nalysis tests are cond!cted on Robo+andS 1>mm and />mm everyday on samples collected from conveyor belts, stock piles and loaded tr!cks

The following e(!ipment is re(!ired and is available at all o!r plants

Sieves / !i//ere*t si>es Sieve Sha.er

61

Ove* Sam+"i*# C *es

$ll o!r sales officers are alos trained to carry o!t these tests at c!stomer locations The Gertical +haft Impactor applies a similar principle of rock3on3rock coll!sion for cr!shing

The sand is classified into fo!r -ones as per I+ CPC norms

%"a*t ' cati *s

62

HUESTION(IRE &OR T3E B(N)S 6&EDER(' B(N)7


INTERVIE-ER$ MR5 JOSE
63

1.-hat are the !i//ere*t +r !ucts a*! services //ere! u*!er c r+ rate 2uyi*# 2y y ur 2a*.sI $ns= 2D"< B$+.< /.T.R 5O$" "O" 2D"< B$+.< /. 5.TT.R O2 *R.<IT 1. B$"4 FD$R$"T..

1.'OR4"F *$#IT$5

2.-hat is the /eesB*terest char#e! 2y the 2a*. / r the services //ere! 2y the 2a*.I $ns= 2..+ /.#RO*.++"F 2..+ 1.5.F$5 2..+ C.$< I"I+TR$TIG. 2..+ I"T.R.+T /.*D+TO .R R$TI"F

,.'ist the cust mers that the 2a*. caters t I $ns= /.T$T$ FROD#
64

1.BO B$T +TO*4 .U*%$"F. C.*I$5 Q *O*%I" "T.R"$TIO"$5 $IR#ORT 5I IT.<

1.-h is the 2i##est c"ie*t / the 2a*.I $ns=$IR I"<I$ $"< R.5I$"*..

8.3 < ma*y em+" yers are < r.i*# i* this !e+artme*tI $ns= "D B.R . #5OT..+ N> O2 TOT$5 $5.+ 7H "D B.R O2 TOT$5 "D B.R O2

2. $5.+ /H

9.-hat is the aca!emic 2ac.#r u*! !e+artme*tI $ns= <.+IF"$TIO" O2 T%. . #5OT..+ I<<5. 5.G.5 $"$F.R++

/ the sta// /r m the c r+ rate 2a*.i*#

$*$<. I* B$*4FROD"< B.T.*%V B$ OR *$ OR I*'$


65

*hanges in the rate of interest @ fiscal policy monetary policy. *ompetition from other bank. $sset liability mismatch.

=.-h is the c r+ rate 2a*.i*# !e+artme*t hea!I $ns=<F (<.#DTT F.".R$5 $"$F.R) BR$"*% %.$<.

?. -hat is the heirecy / the c r+ rate 2a*.i*# !e+artme*tI $ns=

.U.*DTIG. <IR.*TOR (G.RTI*$5 %.$< i.e F.".R$5 $"$F.R( R.FIO"$5 %.$<)

*F)

66

<.#DTT F.".R$5

$"$F.R %.$< (BR$"*% $"$F.R <.#DTT F.".R$5

$"$F.R)

$++I+T$"T F.".R$5 $++I+T$"T (BR$"*%

$"$F.R $"$F.R)

$"$F.R

%.$<

@.Si*ce <he* is the 2a*. +r vi!i*# these c r+ rate 2a*.i*# servicesI $ns= 2or the last C1years

1C.<hat are the +r 2"ems /ace! 2y the 2a*.I $ns= "onperforming assets

HUESTION(IRE &OR B(N)S 6SBI7

1.-hat are the !i//ere*t +r !ucts a*! services //ere! u*!er c r+ rate 2uyi*# 2y y ur 2a*.sI $ns
67

2D"< B$+.< /.T.R 5O$"

"O" 2D"< B$+.< /.5.TT.R O2 *R.<IT 1.B$"4 FD$R"T.. C.TR.$+DRT #RO<D*T+ <. $"< 7.*$+% $"$F. ."T +T+T. +

1.*OR#OR$T. 5O$" C.*$+% *R.<IT 7.'OR4I"F 5O$"+ H.BI55 2I"$"*. *$#IT$5

H.T$U$TIO" #$T ."T+@ 2R$"4"F O2 +T$ #+

2. -hat is the /eeB i*terest char#e! 2y the 2a*. / r the services //ere! 2y the 2a*.I $ns= *OR#OR$T. O22.R.< /.$<G$"*.+ (5O"F T.R ) B$"4I"F +.RGI*.+ 2.. R$T.+ $"< I"T.R.+T

*%$RF.< B#5R p.a

68

1.$<G$"*.+ (+%ORT T.R )

+T5 R$T.+ $##5I*$B5. TI . TO TI .

5@* BF

*O *O

I+IO" I" T%. R$"F. O2 /?p.a I+IO" I" T%. R$"F. O2 /?p.a

69

,.'ist the cust mers that 2a*. catersI $ns= R.5I$"*. I"<D+TRI.+ $IR "<I$ O.T $R5".+ 5I IT.< BO B$T <T.I"F T$T$ T.5.*O R.5I$"*. *O D"I*$TIO" GG2 "<D+TRI.+ 5T< OB2 "<D+TRI.+ 5 IT.< C/ I"2OT.*% 5I IT.<

TOT(' 11C C'IENTS

70

1.-h is the 2i##est c"ie*t / the 2a*.I $ns= $IR I"<I$ $"< R.5I$"*..

8.3 < ma*y em+" yers are < r.i*# i* this !e+artme*tI $ns= "D B.R . #5OT..+ N> O2 TOT$5 $5.+ 7H "D B.R O2 TOT$5 "D B.R O2

2. $5.+ /H

9.-hat is the aca!emic 2ac.#r u*! !e+artme*tK $ns= <.+IF"$TIO" O2 T%. . #5OT..+ I<<5. 5.G.5 $"$F.R++

/ the sta// /r m the c r+ rate 2a*.i*#

$*$<. I* B$*4FROD"< B.T.*%V B$ OR *$ OR I*'$

71

=.-h is the c r+ rate 2a*.i*# !e+artme*t hea!I $ns=<F (<.#DTT F.".R$5 $"$F.R) BR$"*% %.$<.

?.-hat is the heirecy / the c r+ rate 2a*.i*# !e+artme*tI $ns= .U.*DTIG. <IR.*TOR (FROD# %.$<) .U.*DTIG. <IR.*TOR (G.RTI*$5 %.$< i.e F.".R$5 $"$F.R( R.FIO"$5 %.$<) $"$F.R %.$< (BR$"*% $"$F.R $"$F.R) *F)

<.#DTT F.".R$5

$++I+T$"T F.".R$5 $"$F.R $++I+T$"T $"$F.R

72

G.RTI*5. %.$<

/. I< *OR#OR$T. 1.5$RF. *OR#OR$T. FROD# C.I"2R$+TRD*TDR. FROD#

@.Si*ce <he* is the 2a*. +r vi!i*# these c r+ rate 2a*.i*# servicesI $ns=2or the last C1years

1C.<hat are the +r 2"ems /ace! 2y the 2a*.I $ns= "on performing assets *hanges in the rate of interest @ fiscal policy monetary policy. *ompetition from other bank. $sset liability mismatch.

73

HUESTION(IRE SI'ICION7

&OR

T3E

COR%OR(TES

6ROBO

1.'ist the 2a*. /r m <he* the c m+a*y avai"s c r+ rate 2a*.i*# servicesI $ns= "$ . O2 T%. B$"4+ +BI I*I*I I"<I$" OG.R+.$+ B$"4 *ITI B$"4 +.RGI*.+ $G$I5.< 5O$"+ BRI<F. 2I"$"*. I++D. O2 <.BT 2D"<+ 2OR.U TR$"+$*TIO"+

2. -hat are the /eesBi*terest char#e! 2y the 2a*. / r the services +r vi!e! 2y themI
74

$ns= *OR#OR$T. B$"4I"F +.RGI*.+ 2D"< B$+.< /.RD#.. 1.2OR.IF" *DRR."*T C..U#ORT RBI "OR + ".FOTI$T.< O" *$+. TO *$+. B$"+ I+ 7.OT%.R HH?*O"*.++IO" +.RGI*.+ *%$RF.+ H.5.TT.R FD$R$"T.. O2 *R.<IT@B$"4 TO "OR $5 #5R3/>>bps. 2..+ I"T.R.+T *%$RF.<

,.-hat are the measure ta.e* t c *tr " the 2a*. char#eBc mmissi * 2 r*e 2y the c m+a*yI $ns= inim!m !sage of 5* ro!te large vol!me of transation timely retirement of

obligations.

75

1.-hat are the *e# tiati *s tactics use! 2y the c m+a*y t uti"isati * / 2a*. /aci"itiesI.

2tai* maximum

$ns= 'e offer vol!me b!siness which works as a sweeter to the banks.

8. 'ist the 2e*e/its #ive* 2y the 2a*.sI $ns= 2D"< B.".2IT+ "O"32D"<.< B.".2IT+ 5* $"< BF $T HH? *O"*.++IO"

9. -hich 2a*. ! y u <ish t !ea" <ithI

$ns= /."ationalised banks =3 1. #rivate sector banks=3

76

Reason if so W

8. -hich !e+artme*t !eci!es * the 2a*. <ith <hich the !ea"i*#s have t 2e ! *eI $ns= 2inance department in cons!ltation with the board of directors

P. 3 < /reJue*t"y ! y u visit y ur c *cere! re"ati *shi+ ma*a#erI $ns A$lmost every day or on the time of the calls.

6.-hat are the +r 2"ems /ace! <ith res+ect t the services +r vi!e! 2y the 2a*.I $ns= 5ack of transparency and rigidity in the services

/>. Su##esti *sBRec mme*!ati *s / r the 2a*.I $ns= "o s!ggestions.

HUESTION(IRE &OR T3E COR%OR(TES 63% %(NVE' INDUSTRIES7

/. 'ist the 2a*. /r m <he* the c m+a*y avai"s c r+ rate 2a*.i*# servicesI $ns=

77

"$ . O2 T%. B$"4+ D"IO" B$"4

+.RGI*.+ $G$I5.< <$T TO <$T *OR#OR$T.

TR$"+$*TIO"+ I<BI B$"4 +ODT% I"<I$" B$"4 .UI B$"4 I"<D+TRT 2I"$"*I"F $DTO $T.< #$T ."T+ 5* $"< BF

1. -hat are the /eesB i*terest char#e! 2y the 2a*. / r the services +r vi!e! 2y themI $ns= *OR#OR$T. B$"4I"F +.RGI*.+ /.B$"4 FDR$"T.. 2..@I"T.R.+T *%$RF.< 7H? *O"*.++IO" TO "OR $5

+.RGI*.+ *%$RF.

78

1..U#ORT C.OT%.R+ 7.RD#..

H? H31>? $+ #R. RBI R.2.R$"*. R$T.

C. 'hat are the meas!re taken to control the bank charges@commission borne by the companyK $ns= %!ge transactions and reg!lar retirement obligations.

7. 'hat are the negotiations tactics !sed by the company to obtain ma,im!m !tili-ationof bank facilitiesK

79

$ns='e provide large n!mbers of investors in the correspondent banks so as to get the good benefit from the banks.

H. 5isit the benefits given by the banksK $ns= 2D"< B$+.< B.".2IT+ /.'OR4I"F *$#IT$5 2I"$"*I"F 1.T.R 5O$" "O" 2D"<.< B.".2IT+ 5.TT.R O2 *R.<IT B$"4 FD$R$"T..

N. -hich 2a*. y u <ish t !ea" <ithI $ns= "ationali-ed banks

$s they are operated and reg!lated by the government and the rate of interest is low as compared to private banks.

=. -hich !e+artme*t !eci!es * the 2a*. <ith <hich the !ea"i*# have t ! *eI $ns= The finance department decides with the cons!ltation manager.
80

of the dep!ty general

P. 3 < /reJue*t"y ! y u visit t the c *cer*e! re"ati *shi+ ma*a#erI $ns='e visit in bank on the official call basis.

6. -hat are the +r 2"ems /ace! <ith res+ect t the services +r vi!e! 2y the 2a*.I $ns= Too m!ch formalities and lack of fle,ibility

/>. Su##esti *BRec mme*!ati * t the 2a*.sI $ns="o s!ggestions.

6(%%ENDICES7 HUESTION(IRE &OR T3E B(N)S

'hat are the different prod!cts and services offered !nder corporate b!ying by yo!r banksK $ns=3 'hat is the fees@interest charged by the bank for the services offered by the bankK

81

$ns=3 5ist the c!stomers that the bank caters to =3 $ns=3 'ho is the biggest client of the bankK $ns=3 %ow many employers are working in this departmentK $ns=3

'hat is the academic backgro!nd of the staff from the corporate banking departmentK $ns=3 'ho is the corporate banking department headK $ns=3 'hat is the hierarchy of the corporate banking departmentK $ns=3 +ince when is the bank providing these corporate banking servicesK $ns=3 'hat are the problems faced by the bankK $ns=3

82

HUESTION(IRES &OR T3E COR%OR(TES


5ist the bank from when the company avails corporate banking servicesK $ns=3 'hat are the fees@interest charged by the bank for the services provided by themK $ns=3 'hat are the meas!res taken to control the bank charges@commission borne by the companyK $ns=3
83

'hat are the negotiation tactics !sed by the company to obtain ma,im!m !tili-ation of bank facilitiesK $ns=3 5ist the benefits given by the bankK $ns=3

'hich bank do yo! wish to deal withK $ns=3 'hich department decides on the bank with which the dealings have to be doneK $ns=3 %ow fre(!ently do yo! visit yo!r concerned relationship managerK $ns=3 'hat are the problems faced with respect to the services provided by the bankK $ns=3

/>.+!geetions@Recommendations for the bank $ns=3

84

INTER%RET(TION O& D(T( (ND (N('4SIS

*orporate banking dealings are very c!stomised taking to consideration the c!stomers vol!me of b!siness re(!irements..ach corporates is given concessions keeping in mind the healthy relationship that they maintain and the period since when they deal are dealing with the bank. $s far as the corporate are concerned they preffer dealings with a consorti!m of banks taking advantages the benefits provided by all the banks. The corporates convince the banks by provide a h!ge vol!me of the b!siness for the concession given by them.

85

'hile getting the (!estionaire filled it was noticed that the banks were very skeptical abo!t revelaing the details regarding the fees or the interest charged by them to the corporate. Overall the corporate banking charges are applied on a case an case basic keeping into consideration the RBI reg!lations.

RECOMMEND(TIONS E SU00ESTIONS

If we look at it from the corporate angle then the banks need to speed !p their proced!res and th!s enabling fast f!nctioning of the work.It is seen that the corporates feel that the private banks are rigid in their system and don&t make concessions consedering the !rgency of the sit!ation. $ccording to the banks they need the companies to have credit worthinessand clean chit on stheir financial records. %ence it is s!ggested that the company maintain their
86

financial performance according to the r!les and reg!lations. The corporates also need to pay off their obligations on time which wo!ld help them to create a good impression on the banks and make it easy for them for f!t!re borrowings.

CONC'USION

*orporate banking foc!ses on offering a f!ll range of services to m!ltinationals, large domestic corporate and instit!tional clients. *orporate banking reflects bank&s strength in providing an corporates clients in India, a wide away of commercial, transactional and electronic banking prod!ct developments and a well3 interegated approach to realtionship management.

87

*orporate banking services are an integral part of the corporate, investment banking and markets (*IB ) str!ct!re,which foc!ses on offering a f!ll range of services to m!ltinational, large domestic corporate and instit!tional clients. It can be concl!ded that the banks help corporate in financial needs th!s enabling them to r!n smoothly M effectively

88

89

90

91

92

93

94

95

96

97

98

99

100