OUTLINE OF THE PROJECT

In India, small and medium enterprises (SME) is a generic term used to describe small scale industrial (SSI) units and medium-scale industrial units. The SME sector produces a wide range of industrial products such as food products, beverage, tobacco and tobacco products, cotton textiles, wool, silk, synthetic products, jute, hemp & jute products, wood & wood products, furniture and fixtures, paper & paper products, printing publishing and allied industries, machinery, machines, apparatus, appliances and electrical machinery.SME sector also has a large number of service industries The number of SSI working units (registered & unregistered) in India totaled 11.4 million in 2003-0480.5 per cent

IMPORTANCE OF SMES IN INDIA

SSI is one of the significant segments of the Indian economy, contributing about 7 per cent to the Indian GDP and providing employment to over 28 million people. The Indian SME segments current production value is almost Rs 816,000 crore. It contributes to around 40% of industrial production & exports. The SSI sector targets both domestic as well global markets. Globally, 99.7 per cent of all enterprises in the world are SMEs and the balance 0.3 per cent are large-scale enterprises. According to the Ministry of Small Scale Industries, the number of registered SSI units in India has increased from 11 million units in 2002-03 to 11.4 million units in 2003-04, up 3.6 per cent.

 The fixed investment grew by 5.04 per cent from Rs. 162,533 crore in 2002-03 to Rs. 170,726 crore in 2003-04. About 8,000 products are manufactured in the small-scale sector. The industry groupswith a large share in the total production of SSIs such as textile products, wood, furniture, paper, printing, and metal productshave recorded high growth rates. The industry groups with a large share in exports are hosiery and garments (29.0%), food products (21.4%) and, leather
products (18%).

NEED OF THE STUDY

The market for international payments services is rapidly expanding as SMEs search for a reliable platform that can serve their international payments needs. Yet, even the largest global banks lack the local footprint to deliver a truly global payment solutions. Many payment solutions, designed by the banking community, are aimed at the large, multi-national companies but are not well suited for the SME market. Bank model continues to push customer service through self-service channels despite SME customer need for tailored, high touch service.

Innovative payment solutions such as beneficiary management are not currently supported by any global or regional banks.

SCOPE OF THE STUDY

It aims at delivering quality, innovative and efficient products and services to the SME customers through its professional teams. The bank develops flexible lending policies that meet the market needs. It also continues to streamline the approval procedures to improve SME lending efficiency. It aims to become a first-class domestic bank with leading performance in retail banking, credit card and SME, etc. as well as advanced international standard management. The Bank provides its SME customers with an extensive service platform in helping them solving financial problems and improving efficiency of their capital utilization through integration of service platforms of outlets, Internet banking and phone banking,etc

OBJECTIVES
Primary objectives:
To Study on recent economic slowdown on small and medium enterprises customers and measures taken by banks.

Secondary Objectives:
To identify the level of impact of global recession on economy.

To identify the share of the organization and frame measures

to overcome the recession.

RESEARCH METHODOLOGY
Research design:
A fundamental to the success of any project is research design. It shows a plan of action to be carried out in connection to the proposed research work. There are three types of research design. Descriptive research design Exploratory research design Causal research design In this study the researcher has planned to adopt Descriptive research design

LIMITATION OF THE STUDY.

It is difficult to develop formal method of observation and recording. Due to lack of available time value of execution in the organization. Sufficient discussion was not possible. The responses given by the respondents may be biased. It is difficult for the researchers to convince the respondents during the data collection period. Personal interviews are conducted for obtaining factual data about the study. Most of the questions in the questionnaire are close ended which did not reveal the information.

Descriptive research design: This is undertaken in circumstances when the researcher is interested in describing the characteristics of people of certain group such as age , sex, education., a descriptive study is necessary because the objective of the research is to answer the who, what, when, where, and how of the subject under investigation. Sampling design: Sampling area - INDIAN OVERSEAS BANK Sample size - 70 customers. Sampling technique - In this study, probability/random sampling technique is adopted. Sampling Method - Simple random sampling is used.

o Simple random sampling: In this method, every element in the population has a known and equal chance of being selected as a sample. This sampling is best suited when the generalizability of the findings to the whole population is the main objective of the study. Data collection technique: Both primary and secondary data will be used for this study Methods of data collection: Primary data: is collected through survey technique Questionnaire .

 Secondary data is collected from Journals, Internet, Magazines Company's Record Data analysis: Once the data are collected, the information will be coded and appropriate data analytic techniques will be used to obtain meaningful information from the collected data. It involves editing, coding and tabulating the collected data.

The statistical tools used for data analysis are Percentage analysis Chi square test ANOVA Rank Correlation analysis

PRODUCT PROFILE
MSME ACT 2009 The government of India introduced the Micro, Small and
Medium enterprises act 2009 (MSME ACT 2009) which has been notified on June16, 2009 in the gazette of India and has come into effect from October 2009.

The act defines Micro, Small and medium enterprises, in

both manufacturing and services sector.

In case of enterprises engaged in manufacture or production of goods, it will be called a:

Micro enterprise if its investment in plant & machinery

does not exceed Rs.25 Lakhs.
Small enterprise if the same exceeds RS.25 Lakhs but does not exceed Rs.5 Crore. Medium enterprise if the same exceeds Rs.5 Crore but does not exceed Rs.10 Crore.

In case of enterprises engaged in providing services in relation to any industry it will be called a: Micro enterprise If its investment in equipments does not
exceed Rs.10Lakhs. Small enterprises if same exceed Rs.10 Lakhs but do not exceed Rs.2 Crore.

Medium enterprise if the same exceeds Rs.2 Crore but does not exceed Rs.5Crore.

COMPANY PROFILE
Indian Overseas Bank (IOB) was founded on February 10th 1937, by Shri.M.Ct.M. Chidambaram Chettyar, a pioneer in many fields - Banking, Insurance and Industry with the twin objectives of specializing in foreign exchange business and overseas banking. IOB had the unique distinction of commencing business on 10th February 1937 (on the inaugural day itself) in three branches simultaneously - at Karaikudi and Chennai in India and Rangoon in Burma (presently Myanmar) followed by a branch in Penang.

 During the period, IOB expanded its domestic activities and enlarged its international banking operations. As early as in 1957, the Bank established a training centre which has now grown into a Staff College at Chennai with 9 training centre's all over the country.

IOB was the first Bank to venture into consumer credit. It introduced the popular Personal Loan scheme during this period. In 1968, IOB established a full-fledged department to cater exclusively to the needs of the Agriculture sector.IOB was one of the 14 major banks that was nationalized in 1969.

 On the eve of Nationalization in 1969, IOB had 195 branches in India with aggregate deposits of Rs. 67.70 Crs. and Advances of Rs. 44.90 Crs.

In the same year Bharat Overseas Bank Ltd was created in India with 30% equity participation from IOB to take over IOBs branch at Bangkok in Thailand.

The Bank setup a separate Computer Policy and Planning Department (CPPD) to implement the programme of computerization, to develop software packages on its own and to impart training to staff members in this field.

 IOB got autonomous status during 1997-98. IOB had the distinction of being the first Bank in Banking Industry to obtain ISO 9001. Certification for its Computer Policy and Planning Department from Det Norske Veritas (DNV), Netherlands in September 1999. This Certification covers Design, Development, Implementation and Maintenance of software developed inhouse, procurement and supply of hardware and execution of turnkey projects.

 IOB started STAR services in December 1999 for speedy realization of outstation cheques. Now the Banks has 14 STARS centres and one Controlling Centre for providing this

service.
Mobile banking under SMS technology implemented in Ahmedabad and Baroda. Pilot run of Phase I of the Internet Banking commenced covering 34 branches in 5 Metropolitan

centres.
IOB was one among the first to join Reserve Bank of Indias negotiated dealing system for security dialing online.

PERFORMANCE HIGHLIGHTS
Deposits: Total deposits grew from Rs.70205 crore as on
30th June 2007 to Rs, 85001 crore as on 30th June 2008 registering an increase of Rs.14796 crore and growth percentage of 21.08%. Advances: Gross Advances increased from Rs. 48610 crore as on 30th June 2007 to Rs.63419 crore as on 30th June 2008, recording an increase of Rs 14809 crore and growth percentage of 30.46%. Net profit: Net profit for Q1 of 2008-09 is at Rs,255.97 crore and this figure is lower by Rs.12.52 crores when compared to the net profit of Rs.268.49 crore booked during Q1 of 20082009.

 Total income: Total income for Q1 of 2008-09 is at Rs. 2186.83. Crore while the same was at Rs.1907.79 crore for Q1 of 2008-09. The increase in terms of percentage works out to 14.63%. Interest Income has gone up to Rs.2217.08 crore from 1846.21 crore recording a percentage increase of 20.09%. Other income has gone down due to loss on sale and category transfer loss on investments. Total expenses: Total expense for Q1 of 2008-09 is at Rs.1945.64 crore and the same for the corresponding quarter last year was at Rs.1498.62 crore, recording a percentage increase of 29.83%. The interest expenses have gone up from Rs.1137.20 crore to Rs.1490.91 crore with percentage increase of 31.10%.

 Net interest margin: NIM was at 3.71% for the quarter ended 30th June 2008 and the ratio is at 3.12% for the quarter ended 30th June 2009. Total capital funds: Total capital funds of the bank increased to Rs.8170 crore from Rs.7324 crores over one year period. Book value per share: Book value per share of the bank has gone up to Rs.91.40 from Rs.76.12 over one year period

INDUSTRY PROFILE.
Indian Banking profile:
Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal. In Indian banking system has reached even to remote corners of the country. This is one of the main reason of India's growth process. The government regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14th major private banks of India.

The first bank in India, though conservative was established in 1786. The journey of indian banking system can be segregated into three distinct phases, PHASE-1 Early phase from 1786 to 1969 of indian banks. PHASE-2 Nationalization of Indian banking and up to 1991 prior to indian banking system sector reforms. PHASE-3 New phase of indian banking system with the advent of indian financial & banking sector reforms after 1991.

Vision of Banks: 1. 2. 3. 4. The banking scenario in India has already gained all the momentum, with the domestic and international banks gathering pace. The focus of all banks in India has shifted their approach to cost determined by revenue minus profit. To survive in the long run, it is essential to focus on cost saving. Now banks shifted their approach to the profit model, which meant that banks aimed at higher profit maximization.

Future challenges of banks in India.

The Indian banks are hopeful of becoming a global brand as they are the major source of financial sector revenue and profit growth. As a result of this, the profit for the indian banking industry is also not far behind. The profit pool indian banking industry is probable to augment from 2010 to 2015. The increase in the number of private banks, the domestic credit market of India is established to grow.

REVIEW OF LITERATURE
1.Growth of Small Scale Industries in India AUTHOR: JAILAL SAAW JOURNAL: Industry and Trade, April 2005 The expected growth was not there because of lot of root causes to sickness and underdevelopment in the SME sector. This article discussed about the slow growth rate of SMEs, dues to several problems. Through my study I focused on the one problem that is financial problems faced by the SME segment. I concentrated on the credit facilities offered by the governmental agencies as well as the commercial banks.

2. SMEs Main Bank Choice And Organizational Structure Author:hiba EL HAJJ CHEHADE1 And Ludovicvigneron Source: Economic Times, page no: 2 Nov 2009 Abstract: According to this, small banks that often have a decentralized structure are more attractive when customers are opaque ones. We propose to test this affirmation using a panel of 6.258 couples (main bank/SME) working in the French market. The results of our several regressions show the existence of a strong tie between the firms informational opacity and the choice of a decentralized bank. Moreover, opaque firms are more likely to be credit constrained if they choose a hierarchical bank as their main bank.

3. Comprehensive Legislation Needed AUTHOR: Patnaik, S.M. Article: Economic Times Source: page no: 10 DEC 2008. Abstract: In the year 2004 the author of this article expressed his grief for an enactment to safe guard the SME sector. The Government of India in the year 2006 came with the special law for the protection of SME sector. Really it is a welcome gesture for the safekeeping the SMEs. In my thesis I discussed the intricacies and the implementation of the act by the nodal agencies for the promotion of the SMEs

4. Service Quality Provided By Public Sector Banks to SME Customers: An Empirical Study in the Indian Context AUTHOR: Popil D.N Rao Publisher: King Universities. Source: vol -25 June 1, 2009. Abstract: In banking sector, the quality of customer service plays an important role, particularly in the context of growing competition and sustained business growth. The study is an attempt to ascertain the service quality provided by Public sector Banks to Small & Medium Enterprises which play a key role in Indias economy. The major findings of the study have been that majority of the respondents revealed that the credit flow to SMEs sector is not sufficient and the Government will have to initiate necessary steps for making the required funds available easily on convenient terms. Delay in loan application processing due to unhelpful nature of the staff members, as claimed by the majority of the respondents..

5. Banks Asked To Stem Industrial Sickness AUTHOR: SAHNEY. M Article: INDUSTRIAL INDIA Source: VOL 36, 12 DEC 2005. Abstract: Through this article the author tries to express the need for banks intervention in the promotion of the SMEs. The officials of the banks in India are belong to middle class families and unaware of the industrial promotion and its need. Mere advice to the bankers is not helpful. So for that reason Srimathi Indira Gandhi Nationalized all private banks for the development of agricultural sector in 1971.The MSME act 2006, instigates the banks to provide the credit facilities without any hesitation to the SMEs

6. Financing for priority sectors. AUTHOR: Nambiar, Asst.Manager. Review: S.B.I monthly dec16, 2007 Abstract: The article on the above topic paved the way for the thinking strategy for the financing the small scale and medium scale industries by the bank officers. The government of India through its industrial policy clearly stated that the commercial banks should give priority treatment to the SMEs. The nature of the banking officials also discussed in the article. But that is not sufficient to promote the SME sector because the sector was totally neglected for the last several decades due to invention. By enacting the MSME act, 2006, the government of India clearly indicated the signal to the banking.

7. Reviving Sick Units AUTHOR: Ram Chandra K.S. Article: FINANCIAL EXPRESS Source: page no:5 OCT 9, 2001 Abstract: The above article discussed the reviving the sick SMEs in various aspects, like providing technology, management training, skilled labor, export promotion and giving finance. The root cause for all the above problems is the financial problem. The financial institution should provide sufficient amount at an easy disbursal system to promote the SMEs. The topic which I am preparing focused more on the credit facility awareness and availability of several schemes for SMEs.

8. Customer relationship management in the banking sector: impact of internet usage by the SME customer Author: Jham, Vim Source: International Journal of Business Innovation and Research, Volume 4, Numbers 1-2, 30 November 2009, pp. 93-102(10) Publisher: Inderscience Publishers Abstract: Banks in India have succeeded in promoting new services to its SME customers. Based on extant literature on bank marketing, a questionnaire was designed. Then, in a large-scale survey by means of personal and telephone interviews, data was obtained from bank SME customers. This paper focuses on the adoption of internet banking by existing banks SME customers through an investigation of the factors that influence SME customer's acceptance of internet banking service. The questionnaire was designed from the literature review. It included 29 variables which will help in enhancing the satisfaction of the SME customer. The banks chosen for the purpose of the study were the ones who have strong retail presence and offer comprehensive range of information to the customer.

Questionnaire
DEMOGRAPHIC DETAILS. 1. Name of the Respondents ______________. 2. Gender (a) Male (b) Female 3. Age of the Respondent (a) 25-35 yrs (b) 36- 46 yrs (c) 46-56 yrs (d) above 56yrs. 4. Education Qualification. (a) Diploma/ITI (b) UG (c)PG (d) Any other professional course. 5. Martial Status (a) Male (b) Female 6. Company Name ___________________________.

7. Experience in the particular field (a) 0-3yrs (b) 3-5yrs (c) 5-7yrs (d) Above 7yrs. 8. Nature of Business ______________. 9. Annual Turnover ______________. Other information 10. Are you satisfy with the services offered by INDIAN OVERSEAS BANK? (a)Yes (b) No. 11. How long you have account in INDIAN OVERSEAS BANK? (a) 0-2 yrs (b) 2-4 yrs (c) 4-5 yrs (d) above 5yrs.

12. What is your opinion on the Rate of Interest charged by INDIAN OVERSEAS BANK? (a) High (b) Reasonable c) Low. 13. How the SME customers became aware of SMEs loans? (a) Through Business Associates (b)ThroughNeighborhood (c) Word of mouth (d) Personal enquiry (e) Advertisement in TV/ News Paper. (f) If any other mention_____________. 14. Do you receive sufficient information whenever overdraft services charges are change? (a) Yes (b) No

15. In which mode mostly used for conducting business transaction between Banks & SME customers? (a) Personal visit by the customers (b) Computer/Internet. (c) If any mention ____________. 16. Which is the most common means of receiving and making payment for SME customers in INDIAN OVERSEAS BANK? (a) Cheque (b) Credit card (c) Account transfers (d) On-line (e) If others mention __________. 17. What are the problems faced by SME customers in INDIAN OVERSEAS BANK? (a) Long Q (b) High cost of exchanging money at banks (c) Problem in converting the Accounting transaction system too late (d) Token system (e) if any plz mention ____________

18. Whether SME customers have Business Account with other banks? (a) Yes (b) No If yes why_____________________. 19. What are the services provide by INDIAN OVERSEAS BANK to the customers? (a) Commercial Mortgage (b) Business Loan (c) Business current A/C (d) Business charging cards 20. What are the other Value Added services provided by INDIAN OVERSEAS BANK to the Customers? (a) Insurance (b) Personal A/C (c) Over draft facility (d) Cash credit facility (e) If any others plz mention______________________.

21. Do you agree with the statement? Does the majority of SME customers are having a long lasting relationship with INDIAN OVERSEAS BANK (a) Strongly agree (b) Agree (c) Neutral (d) Dis agree (e) Strongly dis agree

22. The Level of Satisfaction of SME customers with

1. 2. 3. Knowledge about business & requirement to customers. CRM- in handling of complaints & grievance. Availability of funding. (b) satisfied (d) less satisfied

(a) Highly Satisfied (C) neutrally satisfied (e) dis satisfied

23. Due to economic slow down. What are the problems faced by the customers? (a) Shortage of money. (b) Allocation of funds. (c) Credit limit (d) if any plz specify________________________________. 24. What are the problems faced by Bank. Due to economic slow down? Mention the reason ___________________________________. 25. What are the measures taken by INDIAN OVERSEAS BANK to retaining the existing as well as new customers? _____________________________________.

LIMITATION OF THE STUDY.

It is difficult to develop formal method of observation and recording. Due to lack of available time value of execution in the organization. Sufficient discussion was not possible. The responses given by the respondents may be biased. It is difficult for the researchers to convince the respondents during the data collection period. Personal interviews are conducted for obtaining factual data about the study. Most of the questions in the questionnaire are close ended which did not reveal the information.