A

Study on
PROVIDING CORPORATE LOAN
AT
Bank Of India, Mor!i, A"ra#ati$
A Project report submitted to
%ni#&rity of Pun&
BY
MO'AMMAD SAR(RA)
Under the guidance of
Prof$ PORINITA BANER)EE
In partial fulfillment of
Mat&r of Buin& Ad"initration
Poona institute of management studies and Entrepreneurship
Camp PUNE 4!!
S&*t&"+&r ,-./

1
DECLARATION
I hereb" declare that the Project #eport entitled $Pro#idin0 1or*orat& 2oan% &ritten and
submitted b" me to the Uni'ersit" of Pune( in partial fulfillment of the re)uirement for the
a&ard of degree of *aster of Business Administration under the guidance of Prof$ Porinita
Ban&r3&& as m" original &or+ and the conclusions dra&n therein are based on the material
collected b" m"self$



Place, - *ohammad sarfraj
.ate, - *BA
/0inance1
2
AC4NO5LEDGEMENT
I &ish to e2press m" sincere gratitude to our Dir&1tor Dr$ G$ M$ NA6EER%DDIN( and
Prof$ PORINITA BANER)EE, 'OD of Poona institute of management studies and
Entrepreneurship for their 'aluable support during m" project3
I ac+no&ledge the +ind help and guidance rendered b" Prof$ PORINITA BANER)EE
during m" project3 4his project &ould not ha'e been possible &ithour her support3
I &ould also li+e to than+ to Mayur 1!in"ay( &ho spared 'aluable time in responding to the
)uestionnaire and guided me to accomplish the project report3
0inall"( I ac+no&ledge m" indebtedness to each one of them &ho &ere associated &ith this
major summer project for their +ind help and co-operation3
Mo!a""ad arfra3
*BA II
INDE7
3
Sr$no Parti1u2ar Pa0& no
.$ E7EC%TIVE S%MMAR8 9
,$ OB)ECTIVES O( ST%D8 :
/$ RESEARC' MET'ODOLOG8 %SED ;
<$ BAN4 PRO(ILE = INTROD%CTION ..
9$ BOI PROCED%RE (OR PROCESSING A CORPORATE LOAN
PROPOSAL 5IT' RE(ERENCE TO TERM LOANS AND CAS'
CREDIT
,-
>$ INTERPRETATION O( A CORPORATE LOAN PROPOSAL
5IT' RE(ERENCE TO A CASE ST%D8
<9
:$ COMPARATIVE ST%D8 ON CORPORATE LENDING
B%SINESS O( BAN4 O( INDIA 5IT' ICICI BAN4?
(INDINGS@OBSERVATIONS
9;
A$ CONCL%SION = S%GGESTION >/
; BIBLIOGRAP'8 >9
4
C'APTER B .
ECEC%TIVE S%MMAR8
5
I$ EC&1uti#& u""ary
Nationali5ation ga'e a great impetus and also ga'e a ne& orientation to the ban+ing
s"stem3 4he importance of the ban+ing s"stem as an intermediar" for channeli5ing the
sa'ings of communit" and its pi'otal role in the econom" made it necessar"( particularl" in
the conte2t of o'erall usage of the resources in terms of mone" to the industrial sectors3
Alread" &e are in a position &here industries are operating at near pea+ capacities and
sustained demand gro&th &ill re)uire a rapid build up of production capacities and
infrastructure3
Initiall" ban+s used to finance onl" the long term need of industries but &ith changing
scenario and Uni'ersal ban+ing being the need 6of the hour no& ban+s also pro'ide &or+ing
capital finance to fund the dail" business operations3
4hese business loans for short term are ta+en in form of cash credit /for &or+ing capital
finance1and term loans/for purchase of machiner" or e)uipment134hese business loans range
from fe& la+hs to crores of rupees and hence the entire procedure from recei'ing an
application for loan till the disbursement has to be scrutini5ed and underta+en 'er" carefull"
b" s+illed loan officers3 6o m" focus area of stud" is the entire procedure of processing a
corporate loan proposal3 4hough the entire procedure is 'er" 'ast but the main points li+e
.ata re)uired( Anal"sis of financial statements and &or+ing capital assessment /calculation
of permissible ban+ finance for &or+ing capital re)uirement1 and Inspection of Units are all
co'ered in the report3
0urther the case stud" of 7Y8 94. C:*PANY &ill gi'e us an insight into ho& an
actual loan proposal is made the entire format and interpretation3 4his &ill gi'e us an idea on
&hat the ban+s loo+ for in a corporate loan proposal and the basis of sanctioning the loan3
4he final step being a comparati'e stud" of corporate lending business of ban+ of India
and ICICI ban+ &ith reference to rate of interest( processing fees( documents and time
re)uired for sanctioning loans in both the ban+s3 4he limitation of stud" is that the accurac"
of results depends on the authenticit" of the secondar" data and personal 'ie&s3
6
C'APTER B ,
OB)ECTIVES O( ST%D8
7
II$ OB)ECTIVES O( ST%D8D
4o stud" the procedure adopted b" the ban+ for processing a corporate loan &ith
reference to cash credit and term loans3
Interpretation of a corporate loan proposal &ith reference to a Case 6tud"3
Comparati'e 6tud" on Corporate lending business of Ban+ of India &ith ICICI
Ban+3
SCOPE O( T'E ST%D8D
:'er the period of time( &ith the tremendous increase in the gro&th pattern of industrial
de'elopment( the need for the corporate loans ha'e increased more than e'er3 6o( the
increasing trend urges the ban+s and financial institutions to focus on corporate ban+ing as a
separate di'ision3 6o( I ha'e preferred to stud" the concept of corporate ban+ing and all the
P#:CE.U#A9 aspects attached to it3
8
C'APTER B /
RESEARC' MET'ODOLOG8
9
III$ RESEARC' MET'ODOLOG8 %SEDD
RESEARC' DESIGND
A research design is the arrangement of the condition for collection and anal"sis of data3
Actuall" it is the blueprint of the research project3 4he research t"pe is descripti'e research3
4he main objecti'e of this design is search primar" and secondar" data3
T!& r&&ar1! *ri"ari2y fo1u& on t!& &1ondary our1& and firt !and infor"ation
fro" +ank of India &nior "ana0&r and +ran1! "ana0&r$
DATA COLLECTIOND
As the research t"pe is descripti'e( the method of data collection &as informal
RESEARC' T8PE, 6econdar" research
Ot!&r our1&D
Ban+ *anuals-loans and ad'ances( ;oogle and information based on all latest ne&s on 4imes
of India and Economic 4imes( Business 6tandard etc3

10
C'APTER B <
BAN4 PRO(ILE = INTROD%CTION
11
IV$ INTROD%CTION = BAN4 PRO(ILE
BAN4 O( INDIA
'itory
12
Ban+ of India &as founded on <th 6eptember( =!> b" a group of eminent businessmen from
*umbai3 4he Ban+ &as under pri'ate o&nership and control till ?ul" =>= &hen it &as
nationalised along &ith @ other ban+s3
Beginning &ith one office in *umbai( &ith a paid-up capital of #s3A! la+h and A!
emplo"ees( the Ban+ has made a rapid gro&th o'er the "ears and blossomed into a might"
institution &ith a strong national presence and si5able international operations3 In business
'olume( the Ban+ occupies a premier position among the nationalised ban+s3
4he Ban+ has @<AB branches in India spread o'er all statesC union territories including
speciali5ed branches3 4hese branches are controlled through A! 8onal :ffices3 4here are B=
branchesC offices /including fi'e representati'e offices1and @ subsidiaries and joint 'enture
abroad3
4he Ban+ came out &ith its maiden public issue in ==< and follo& on Dualified Institutions
Placement in 0ebruar" B!!E3
Fhile firml" adhering to a polic" of prudence and caution( the Ban+ has been in the forefront
of introducing 'arious inno'ati'e ser'ices and s"stems3 Business has been conducted &ith the
successful blend of traditional 'alues and ethics and the most modern infrastructure3 4he
Ban+ has been the first among the nationalised ban+s to establish a full" computerised branch
and A4* facilit" at the *ahala2mi Branch at *umbai &a" bac+ in =E=3 4he Ban+ is also a
0ounder *ember of 6FI04 in India3 It pioneered the introduction of the Gealth Code 6"stem
in =EB( for e'aluatingC rating its credit portfolio3
4he Ban+Hs association &ith the capital mar+et goes bac+ to =B &hen it entered into an
agreement &ith the Bomba" 6toc+ E2change /B6E1 to manage the B6E Clearing Gouse3 It is
an association that has blossomed into a joint 'enture &ith B6E( called the B:I 6hareholding
9td3 to e2tend depositor" ser'ices to the stoc+ bro+ing communit"3 Ban+ of India &as the
first Indian Ban+ to open a branch outside the countr"( at 9ondon( in =4>( and also the first
to open a branch in Europe( Paris in =<43 4he Ban+ has si5able presence abroad( &ith a
net&or+ of B= branches /including fi'e representati'e office1 at +e" ban+ing and financial
centres 'i53 9ondon( Ne&"or+( Paris( 4o+"o( Gong-Iong and 6ingapore3 4he international
business accounts for around <3EBJ of Ban+Hs total business
13
Co"*any Ba1k0roundD
B:I pro'ides a &ide range of ban+ing products and financial ser'ices to corporate
and retail customers34he ban+ pro'ides specialised ser'ices for businesses /dealing in foreign
e2change1( N#Is( merchant ban+ing( etc3Apart from this( it also has specialised branches that
deal in asset reco'er"( hi-tech agricultural finance( lease finance and treasur"( and small scale
industries3 #ecentl"( the ban+ has di'ersified into offering products /and ser'ices1 such as
mutual funds( 'enture capital( depositor" ser'ices( bullion trading and credit cards3
B:I is a leading pla"er in retail ban+ing and it &as the first nationalised ban+ to
establish a full" computerised branch and an A4* facilit" in India3 It has a strong net&or+ of
appro2imatel" B<! branches that pro'ide e2port credit3 B:I is among the top ban+s in India
that pro'ide e2port credit to industries such as diamond e2port34he ban+ is among those that
ha'e been offering ban+er ser'ices to the Bomba" 6toc+ E2change and are managing the
latterKs clearing house since =B3
4he Ban+ of India has initiated man" ser'ices to meet the &orld&ide needs of its
clients and le'erage its domestic ban+ing strengths34he ban+ has a global presence through
its branches 9ondon( Birmingham( Eastham(Femble"( 9eicester( and *anchester3 B:I has
also a branch in Channel Islands i3e3( ?erse" Branch3
It underta+es both retail and corporate ban+ing acti'ities34he ban+Ks operations are
primaril" targeted at N#Is34hese operations include pro'iding deposit( credit and remittances
ser'ices3 B:I has also used letter of credit as an effecti'e financial mechanism to offer credit
ser'ices to its clients in the UI3
E%ALIT8 POLIC8D
14
Miion and #iion tat&"&ntD
Our "iionD
$to pro'ide superior and proacti'e ban+ing ser'ices to niche mar+ets globall"(&hile pro'iding
cost-effecti'e(responsi'e ser'ices to others in our role as a de'elopment ban+(and in so
doing(meet the re)uirenment of our sta+eholders3%
Our #iionD
15
$to become the ban+ of choice for corporate(medium businesses and upmar+et retail
customers and to pro'ide cost-effecti'e de'elopmental ban+ing for small business( mass
mar+et and rural ma+ets%
S%BSIDIAR8
Infor"ation a+out u+idiari& 3oint #&ntur& and ao1iat& BOI S!ar&!o2din0 Ltd$
Ban+Hs association &ith Bomba" 6toc+ E2change 9td3 /B6E1 spans o'er a period of more than E decades
&ith the clearing and settlement functions of the Bomba" 6toc+ E2change 9td3( /B6E1 handled b" the
Ban+3 9ater on in =E=( Ban+ set up B:I 6hareholding 9td3 as a joint 'enture &ith B6E to manage the
clearing house acti'ities of the E2change3 4he compan" is carr"ing out the demat rolling settlements on
4LB basis of the E2change through the National 6ecurities .epositor" 6er'ices 9td3 /N6.91 and Central
.epositor" 6er'ices /India1 9td3 /C.691 efficientl" and also the settlement of ;-6ecs through an
integrated computeri5ed s"stem
Fith a 'ie& to optimising use of its trained manpo&er and sophisticated I4 infrastructure( besides
handling settlement related &or+ of the E2change( the compan" also e2tends depositor" ser'ices to
member bro+ers of the stoc+ e2changes and retail in'estors3 .uring B!!4-!A( the compan" commenced
ne& business acti'it" i3e3 fran+ing of stamp documents( &hich has pro'ed to be highl" lucrati'e and has
been contributing significantl" to the re'enues of the compan"3 Fith the corporatisation of the 6toc+
E2change( *umbai and its transformation in to a corporate entit" 'i53 the Bomba" 6toc+ E2change 9td3
during the "ear( the clearing and settlement functions of B:I 6hareholding 9td3 are li+el" to get
transferred to a clearing corporation in future
B:I69 earned a net profit of #s3@!=3BA la+hs during B!!A-!> as against #s3AB3@ la+hs earned during
B!!4-!A3 4he compan" paid an interim di'idend of AJ during 0Y B!!A-!> and final di'idend of 4A J
ta+ing total di'idend for 0Y B!!A-!> to >!J as against BAJ di'idend paid during 0Y B!!4-!A3
16
17
CORPORATE LENDING
INTROD%CTION TO CORPORATE LENDINGD
In the present changing scenario of ban+ing industr" it is the aim of all financial institutions and ban+s to
pro'ide for all sorts of financial problems and needs of its clients3 4herefore in the recent de'elopments
in the financial sector &e ha'e been &itnessing the term institutions3 4he lending institutions &ere earlier
aiming at pro'iding long term credit re)uirement for industr" but no& the" are pro'iding &or+ing capital
finance and also inland as &ell as foreign letter of credit3 Ban+s ha'e also started financing long term
credit needs of the industr"3
Fith the ad'ent of financial sector reforms ushered b" go't3 of India and #BI to pro'ide liberali5ed
en'ironment in ban+ing industr"( it has become imperati'e to create en'ironment to meet financial needs
of a
18
/$Pro1&in0 f&&D BICICI BAN4 9oan processing fees depend on the amount of
loan sanctioned but apart from that ICICI ban+ also has some other charges li+e,
Guarant&& f&& of 3A!J of the sanction amount and annual ser'ice charges of
!3<AJ pa"able e'er" "ear $ Nationa2i&d +ank charge onl" processing fees for loan
&hich are )uite reasonable there are no other such "earl" charges3
Co""iion IN ICICI BANI
6hall be charged on pro rata basis based on the tenure and the amount of non-fund
based facilit" being a'ailed3Nationa2i&d +ank donKt follo& the practice of
commission3
<$Ti"& r&Fuir&d for 2oan an1tion
4he nationalised ban+s ma" sanction loans at branch le'el depending on amount and
t"pe of loan and authorit" of branch manager3If the" donKt fall in the ambit of branch
manager then the" ha'e to be sanctioned b" #3* and further some proposals ma" also
be passed on to head office for appro'als3 4his re)uires a lot of time also
documentation re)uired is 'er" hea'" since the" are totall" under guidelines of #BI3
Pri'ate sector ban+s li+e ICICI ha'e more freedom in operation and all their acti'ities
are decentralised thus facilitating a )uic+ processing of loans3
19
C'APTER B A
CONCL%SION = S%GGESTION
CONCL%SIONS
Cr&dit i a #ita2 *art of any finan1ia2 yt&" of a 1ountry and or0aniation$ A *ro*&r
1ontro2 +y +ank t!rou0! &ff&1ti#& "onitorin0 of unit 1an 2&ad to &ffi1i&nt and af&
uti2iGation of t!& fund of t!& +ank$ T!& Hunit in*&1tionI +y t!& auditor and di1uion
Jit! fun1tiona2 "ana0&r of t!& unit in
t!& *ro1& &nor"ou2y !&2* in und&rtandin0 and a&in0 t!& Jorkin0 1ondition of
t!& unit$Su1! #iit &na+2& +ank to knoJ t!& 2at&t *oition of t!& unit and t!u "ay
2&ad to ti"&2y r&"&dia2 "&aur& if n&&d&d$
S%GGESTIONS
20
T!& nationa2i&d +ank firt and for&"ot n&&d to *&&d u* t!&ir *ro1&in0 and
an1tionin0 of 2oan to 0&t an &d0& o#&r t!& *ri#at& +ank$
RBI 1an furt!&r !&2* t!& nationa2i&d +ank +y d&1&ntra2iin0 t!& *ro1& of 2oan
an1tion and 0i#in0 "or& fr&&do" in o*&ration$
T!& do1u"&ntation r&Fuir&d i !&a#y o t!&r& !ou2d +& a *ro*&r yt&" and o
t!at a22 t!& 2it of r&Fuir&d do1u"&nt ar& inti"idat&d to t!& 1uto"&r in on& #iit
rat!&r t!an a *ro2on0&d *ro1&dur&,J!i1! t!&n r&Fuir& &#&ra2 #iit +y t!&
1uto"&r$
21
C'APTER B ;
BIBILIOGRAP'8
BIBLIOGRAP'8
JJJ$r+i$or0$in
JJJ$+ankofindia$1o$in
JJJ$i1i1i+ank$1o"
JJJ$t!&indian+ank&r$1o$in
JJJ$+uin&?tandard$1o"
22
JJJ$t!&!indu+uin&2in&$in
JJJ$0oo02&$1o"
Bank "anua2 and 2oan *ro*oa2 for r&f&r&n1& $
23