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ProjectStudyReport
On
TrainingUndertakenat
Titled
“ComparativeAnalysisofSBI&HDFCBank
RegardingPersonalLoan”
SubmitedinpartialfulfilmentfortheAwardofdegree
Of
Bachelor'sofBusinessAdministration
2017-2020
Submitedby: SubmitedTo:
SudhanshuKumar MrAviralJaiswal
ACKNOWLEDGEMENT
Thepathtosuccessisneversosmoothandsimpletoachieve.However,our
learning’sandmotivationbyourcloseonesandourmentorshelpsustoreach
beyondourpotential.MyProjectwouldremainpartialwithoutacknowledging
peoplewhoencouragedmetoachieveamilestone.
Iam privilegedtopaymysinceregratitudetowardsMr.AVIRALJAISWALfor
providingtheirvaluableguidanceandencouragementthroughouttheProjectfor
keepingmymoraleupandmakingitpossibletocompleteandsubmitthisreportin
time.Iamequalygratefultoalmyotherteachersfortheircompletesupport.
ItwouldbeunfaironmypartifIdonotthankmycolegesfortheircontinuoushelp
withoutwhichthisworkcouldneverhavebeenaccomplished.Theymademe
realizetheimportanceofteamworkandalsotheleadershipskils.Iamgratefulto
alofthemstandingwithmeandsupportingmeinthisproject.
2
PREFACE
Thisprojectreporthasbeenpreparedaspertherequirementofthesylabusof
BBAcoursestructureunderwhichthestudentsaretherequiredtoundertake project.
Itwasafirsthandexperienceforusasthatwewereexposedtotheprofessional set-
upandwerefacingthemarket,whichwasrealyagreatexperience.
Duringprojectperiod,Ihadverytouchingexperiences.Whenbusinessisinvolved,
experiencescountsalot,asweknow,experienceareaninstrument,whichleads
towardssuccess.
NowItakethisopportunitytopresenttheprojectreportandsincerelyhopethatit
wilbeasmuchknowledgeenhancingtothereadersasitwastouseduringthe
fieldworkandthecompilationofthereport.
3
EXECUTIVESUMMARY
ThershouldbecomparisonbetweentwobiggestbankofIndianamely
StateBankofIndia(SBI)and HousingDevelopmentFinancialCorporation
(HDFC)onPersonalloanprovidedbythem.
TodayPersonalloanisnecessityforfulfiltherequirementoffamilyand
providegoodlife.Everyonewantsalifeinwhichalfacilitiesarepresent
whicharesocostlysotheymovetowardstovariousbanksbothpublicas
welasprivatebankforloan.
SBIbanksisbasicalypreferbymostofthepeoplewhoareingovernment
jobs/publicsectorsbecauseof:-
1. Taxrebate
2. Lackofmuchfunds
3. Interestrate
HDFCBankalsochoiceofpeoplebecauseof:-
1. EasinessandLowdocumentation
2. Services
3. CooperativeandRelationship
Inthisprojectstudypeoplesaresatisfiedbyboththebanksbutalsowants
morethingslikeUpdatingofservices,technologicalenhancementand
ethics.Ifalthebanksfocusonthesethingstheygetbetergrowthin
PersonalloanaswelasbeterresponseofpeopleastodayPersonalloanis
requiredforfulfiltherequirementoflife.
4
TABLEOFCONTENT
Contents:-
1.IntroductiontotheIndustry
2.HistoryofBankinginIndia
3.Introductiontotheorganization
4.ResearchMethodology
TitleoftheStudy
DurationoftheProject
Objectiveofthestudy
TypeoftheResearch
SampleSizeandMethodofselectingSamples
ScopeoftheStudy
LimitationoftheStudy
5.FactsandFindings
6.AnalysisandInterpretation
7.SWOT
8.Conclusion
9.Appendix
10.Bibliography
5
INTRODUCTIONOFBANKINGINDUSTRY
Bank
A bankislicensebyagovernment.Itsprimaryactivityistolendmoney.
Manyotherfinancialactivitieswerealowedovertime.Forexamplebanks
areimportantplayersinfinancialmarketsandofferfinancialservicessuch
asinvestmentfundsInsomecountriessuchasGermany,bankshave
historicalyownedmajorstakesinindustrialcorporationswhileinother
countriessuchastheUnitedStatesbanksareprohibitedfromowningnon-
financialcompanies.InJapan,banksareusualythenexusofacross-share
holdingentityknownasthezaibatsu.InFrance,bancassuranceisprevalent,
asmostbanksofferinsuranceservices(andnowrealestateservices)to theirclients.
Thelevelofgovernmentregulationofthebankingindustryvarieswidely,
withcountiessuchasIceland,theUnitedKingdom andtheUnitedStates
havingrelativelylightregulationofthebankingsector,andcountriessuch
asChinahavingrelativelyheavierregulation(includingstricterregulations
regardingthelevelofreserves).
History
Bankshaveinfluencedeconomiesandpoliticsforcenturies.Historicaly,the
primarypurposeofabankwastoprovideloanstotradingcompanies.
Banksprovidedfundstoalow businessestopurchaseinventory,and
colectedthosefundsbackwithinterestwhenthegoodsweresold.For
centuries,thebankingindustryonlydealtwithbusinesses,notconsumers.
Bankingserviceshaveexpandedtoincludeservicesdirectedatindividuals,
andriskinthesemuchsmalertransactionsarepooled.
6
Originoftheword
SilverdrachmcoinfromTrapezus,4thcenturyBC
Thenamebankderivesfrom theItalianwordbanco"desk/bench",used
duringtheRenaissancebyFlorentinebankers,whousedtomaketheir
transactionsaboveadeskcoveredbyagreentablecloth.However,thereare
tracesofbankingactivityeveninancienttimes.
ABOUTBANKING:-
Section5(b)oftheBankingRegulationAct,1949defines
moneyfrom thepublic,repayableondemandorotherwise,and
withdrawalbycheque,draft,orderorotherwise.”
Section5(c)oftheBankingRegulationAct,1949definesabankingcompany’as
“anycompanywhichtransactsthebusinessofbankinginIndia”.
7
DefinitionofBanking:-
Thedefinitionofabankvariesfromcountrytocountry.
UnderEnglishcommonlaw,abankerisdefinedasapersonwhocarieson
thebusinessofbanking,whichisspecifiedas:
Conductingcurrentaccountsforhiscustomers
Payingchequesdrawnonhim,and
Colectingchequesforhiscustomers.
Theborrowing,raisingortakingupofmoney,thelendingoradvancingofmoney
eitherwithorwithoutsecurity;
Actingasagentsforanygovernmentorlocalauthorityoranyotherpersonor
persons.
Contractingforpublicandprivateloansandnegotiatingandissuingthesame.
Theeffecting,insuring,guaranteeing,underwriting,participatinginmanagingand
carryingoutofanyissue,publicorprivate,ofstate,municipalorotherloansorof
shares,stock,debenturesordebenturestockofanycompany,corporationor
associationandthelendingofmoneyforthepurposeofanysuchissue.
8
Examplesofstatutorydefinitions:
"bankingbusiness"meansthebusinessofreceivingmoneyoncurentor
depositaccount,payingandcolectingchequesdrawnbyorpaidinby
customers,themakingofadvancestocustomers,andincludessuchother
businessastheAuthoritymayprescribeforthepurposesofthisAct;
(BankingAct(Singapore),Section2,Interpretation).
"bankingbusiness"meansthebusinessofeitherorbothofthefolowing:
1. Receivingfromthegeneralpublicmoneyoncurent,deposit,savingsor
othersimilaraccountrepayableondemandorwithinlessthan[3months].
orwithaperiodofcalornoticeoflessthanthatperiod;
2. Payingorcolectingchequesdrawnbyorpaidinbycustomers
3. SincetheadventofEFTPOS(ElectronicFundsTransferatPointOfSale),
directcredit,directdebitandinternetbanking,thechequehaslostits
primacyinmostbankingsystemsasapaymentinstrument.Thishasled
legaltheoriststosuggestthatthechequebaseddefinitionshouldbe
broadenedtoincludefinancialinstitutionsthatconductcurrentaccountsfor
customersandenablecustomerstopayandbepaidbythirdparties,evenif
theydonotpayandcolectcheques
9
Commercialrole:-
Thecommercialroleofbanksisnotlimitedtobanking,andincludes:
issueofbanknotes(promissorynotesissuedbyabankerandpayableto
bearerondemand)
processingofpaymentsbywayoftelegraphictransfer,EFTPOS,internet
bankingorothermeans
issuingbankdraftsandbankcheques
acceptingmoneyontermdeposit
lendingmoneybywayofoverdraft,instalmentloanorotherwise
providingdocumentaryandstandbyletersofcredit(tradefinance),
guarantees,performancebonds,securitiesunderwritingcommitmentsand
otherformsofoff-balancesheetexposures
safekeepingofdocumentsandotheritemsinsafedepositboxes
curencyexchange
actingasa'financialsupermarket'forthesale,distributionorbrokerage,
withorwithoutadvice,ofinsurance,unittrustsandsimilarfinancial products
10
Economicfunctions:-
Theeconomicfunctionsofbanksinclude:
1. Issueofmoney,intheformofbanknotesandcurentaccountssubject
tochequeorpaymentatthecustomer'sorder.Theseclaimsonbankscan
actasmoneybecausetheyarenegotiableand/orrepayableondemand,
andhencevaluedatpar.Theyareeffectivelytransferablebymeredelivery,
inthecaseofbanknotes,orbydrawingachequethatthepayeemaybank orcash.
11
Lawofbanking:-
Bankinglawisbasedonacontractualanalysisoftherelationshipbetween
thebank(definedabove)andthecustomer—definedasanyentityforwhich
thebankagreestoconductanaccount.
Thelawimpliesrightsandobligationsintothisrelationshipasfolows:
1. Thebankaccountbalanceisthefinancialpositionbetweenthebank
andthecustomer:whentheaccountisincredit,thebankowesthebalance
tothecustomer;whentheaccountisoverdrawn,thecustomerowesthe balancetothebank.
2. Thebankagreestopaythecustomer'schequesuptotheamount
standingtothecreditofthecustomer'saccount,plusanyagreedoverdraft
limit.
3. Thebankmaynotpayfrom thecustomer'saccountwithouta
mandatefromthecustomer,e.g.achequedrawnbythecustomer.
4. Thebankagreestopromptlycolectthechequesdepositedtothe
customer'saccountasthecustomer'sagent,andtocredittheproceedsto
thecustomer'saccount.
5. Thebankhasarighttocombinethecustomer'saccounts,sinceeach
accountisjustanaspectofthesamecreditrelationship.
6. Thebankhasalienonchequesdepositedtothecustomer'saccount,
totheextentthatthecustomerisindebtedtothebank.
7. Thebankmustnotdisclosedetailsoftransactionsthroughthe customer'saccount
—unlessthecustomerconsents,thereisapublicdutyto
disclose,thebank'sinterestsrequireit,orthelawdemandsit.
12
Entryregulation:-
Usualythedefinitionofthebusinessofbankingforthepurposesof
regulationisextendedtoincludeacceptanceofdeposits,eveniftheyare
notrepayabletothecustomer'sorder—althoughmoneylending,byitself,is
generalynotincludedinthedefinition.
Unlikemostotherregulatedindustries,theregulatoristypicalyalsoa
participantinthemarket,i.e.agovernment-owned(central)bank.Central
banksalsotypicalyhaveamonopolyonthebusinessofissuingbanknotes.
However,insomecountriesthisisnotthecase.IntheUK,forexample,the
FinancialServicesAuthoritylicensesbanks,andsomecommercialbanks
(suchastheBankofScotland)issuetheirownbanknotesinadditionto
thoseissuedbytheBankofEngland,theUKgovernment'scentralbank.
Sometypesoffinancialinstitution,suchasbuildingsocietiesandcredit
unions,maybepartlyorwholyexemptfrombanklicencerequirements,and
thereforeregulatedunderseparaterules.
Therequirementsfortheissueofabanklicencevarybetweenjurisdictions
13
buttypicalyinclude:
1. Minimumcapital
2. Minimumcapitalratio
'FitandProper'requirementsforthebank'scontrolers,owners,directors,
and/orseniorofficersTherequirementsfortheissueofabanklicencevary
betweenjurisdictionsbuttypicalyinclude:
3. 'FitandProper'requirementsforthebank'scontrolers,owners,
directors,and/orseniorofficers
4. Approvalofthebank's
5. Businessplanasbeingsufficientlyprudent.
Theeconomicfunctionsofbanksinclude:
6. Issueofmoney,intheform ofbanknotesandcurentaccounts
subjecttochequeorpaymentatthecustomer'sorder.Theseclaimson
bankscanactasmoneybecausetheyarenegotiableand/orrepayableon
demand,andhencevaluedatpar.Theyareeffectivelytransferablebymere
delivery,inthecaseofbanknotes,orbydrawingachequethatthepayee maybankorcash.
7. Netingandsetlementofpayments–banksactasbothcolection
andpayingagentsforcustomers,participatingininterbankclearingand
setlementsystemstocolect,present,bepresentedwith,andpaypayment
instruments.Thisenablesbanksto economiseonreservesheld for
setlementofpayments,sinceinwardandoutwardpaymentsoffseteach
other.Italsoenablestheoffsetingofpaymentflowsbetweengeographical
areas,reducingthecostofsetlementbetweenthem.
8. Creditintermediation–banksborowandlendback-to-backontheir
ownaccountasmiddlemen
9. Creditquality improvement– banks lend money to ordinary
commercialandpersonalborrowers(ordinarycreditquality),butarehigh
qualityborrowers.Theimprovementcomesfrom diversificationofthe
bank'sassetsandcapitalwhichprovidesabuffertoabsorblosseswithout
14
defaultingonitsobligations.However,banknotesanddepositsaregeneraly
unsecured;ifthebankgetsintodifficultyandpledgesassetsassecurity,to
raisethefundingitneedstocontinuetooperate,thisputsthenoteholders
anddepositorsinaneconomicalysubordinatedposition.
10. Maturitytransformation:-Banksborowmoreondemanddebtand shortterm
debt,butprovidemorelongterm loans.Inotherwords,they
borrowshortandlendlong.Withastrongercreditqualitythanmostother
borrowers,bankscandothisbyaggregatingissues(e.g.acceptingdeposits
andissuingbanknotes)andredemptions(e.g.withdrawalsandredemptions
ofbanknotes),maintaining reservesofcash,investing inmarketable
securitiesthatcanbereadilyconvertedtocashifneeded,andraising
replacementfundingasneededfromvarioussources(e.g.wholesalecash
marketsandsecuritiesmarkets).
Bankinglawisbasedonacontractualanalysisoftherelationshipbetween
thebank(definedabove)andtheCustomer:-definedasanyentityforwhich
thebankagreestoconductanaccount.
Thelawimpliesrightsandobligationsintothisrelationshipasfolows:
11. Thebankagreestopromptlycolectthechequesdepositedtothe
customer'saccountasthecustomer'sagent,andtocredittheproceedsto
thecustomer'saccount.
12. Thebankshavearighttocombinethecustomer'saccounts,since
eachaccountisjustanaspectofthesamecreditrelationship.
13. Thebankhasalienonchequesdepositedtothecustomer'saccount,
totheextentthatthecustomerisindebtedtothebank.
15. Thebanksmustnotcloseacustomer'saccountwithoutreasonable
notice,sincechequesareoutstandingintheordinarycourseofbusinessfor
15
severaldays.
Theseimpliedcontractualtermsmaybemodifiedbyexpressagreement
betweenthecustomerandthebank.Thestatutesandregulationsinforce
withinaparticularjurisdictionmayalsomodifytheabovetermsand/or
createnewrights,obligationsorlimitationsrelevanttothebank-customer
relationship.
Usualythedefinitionofthebusinessofbankingforthepurposesof
regulationisextendedtoincludeacceptanceofdeposits,eveniftheyare
notrepayabletothecustomer'sorder—althoughmoneylending,byitself,is
generalynotincludedinthedefinition.
Unlikemostotherregulatedindustries,theregulatoristypicalyalsoa
participantinthemarket,i.e.agovernment-owned(central)bank.Central
banksalsotypicalyhaveamonopolyonthebusinessofissuingbanknotes.
However,insomecountriesthisisnotthecase.IntheUK,forexample,the
FinancialServicesAuthoritylicencesbanks,andsomecommercialbanks
(suchastheBankofScotland)issuetheirownbanknotesinadditionto
thoseissuedbytheBankofEngland,theUKgovernment'scentralbank.
Sometypesoffinancialinstitution,suchasbuildingsocietiesandcredit
unions,maybepartlyorwholyexemptfrombanklicencerequirements,and
thereforeregulatedunderseparaterules.
16
HistoryofBankinginIndia
ThefirstbankinIndia,thoughconservative,wasestablishedin1786.From 1786
tiltoday,thejourneyofIndianBankingSystem canbesegregatedintothree
distinctphases.Theyareasmentionedbelow:-
Earlyphasefrom1786to1969ofIndianBanks
NationalizationofIndianBanksandupto1991priortoIndianbankingsector Reforms.
Phase
TheGeneralBankofIndiawassetupintheyear1786.NextcameBankof
HindustanandBengalBank.TheEastIndiaCompanyestablishedBankofBengal
(1809),BankofBombay(1840)andBankofMadras(1843)asindependentunits
andcaleditPresidencyBanks.Thesethreebankswereamalgamatedin1920and
ImperialBankofIndiawasestablishedwhichstartedasprivateshareholders
banks,mostlyEuropeansshareholders.
In1865AlahabadBankwasestablishedandfirsttimeexclusivelybyIndians,
PunjabNationalBankLtd.wassetupin1894withheadquartersatLahore.
Between1906and1913,BankofIndia,CentralBankofIndia,BankofBaroda,
CanaraBank,IndianBank,andBankofMysoreweresetup.ReserveBankofIndia
17
camein1935.
Duringthefirstphasethegrowthwasveryslowandbanksalsoexperienced
periodicfailuresbetween1913and1948.Therewereapproximately1100banks,
mostlysmal.Tostreamlinethefunctioningandactivitiesofcommercialbanks,
theGovernmentofIndiacameupwithTheBankingCompaniesAct,1949which
waslaterchangedtoBankingRegulationAct1949asperamendingActof1965
(ActNo.23of1965).ReserveBankofIndiawasvestedwithextensivepowersfor
thesupervisionofbankinginIndiaastheCentralBankingAuthority.
Phase
GovernmenttookmajorstepsinthisIndianBankingSectorReform after
independence.In1955,itnationalizedImperialBankofIndiawithextensive
bankingfacilitiesonalarge
scaleespecialyinruralandsemi-urbanareas.ItformedStateBankofIndiatoact
astheprincipalagentofRBIandtohandlebankingtransactionsoftheUnionand
StateGovernmentsaloverthecountry.
SevenbanksformingsubsidiaryofStateBankofIndiawasnationalizedin1960on
19thJuly,1969,majorprocessofnationalizationwascariedout.Itwastheeffort
ofthethenPrimeMinisterofIndia,Mrs.IndiraGandhi.14majorcommercialbanks
inthecountrywerenationalized.
SecondphaseofnationalizationIndianBankingSectorReformwascariedoutin
1980withsevenmorebanks.Thisstepbrought80%ofthebankingsegmentin
IndiaunderGovernmentownership.
18
ThefolowingarethestepstakenbytheGovernmentofIndiatoRegulate Banking
1949:EnactmentofBankingRegulationAct.
1955:NationalizationofStateBankofIndia.
1959:NationalizationofSBIsubsidiaries.
1961:Insurancecoverextendedtodeposits.
1969:Nationalizationof14majorbanks.
1971:Creationofcreditguaranteecorporation.
1975:Creationofregionalruralbanks.
1980:Nationalizationofsevenbankswithdepositsover200crore.
Afterthenationalizationofbanks,thebranchesofthepublicsectorbankIndia
raisedtoapproximately800%indepositsandadvancestookahugejumpby
11,000%.
BankinginthesunshineofGovernmentownershipgavethepublicimplicitfaith
andimmenseconfidenceaboutthesustainabilityoftheseinstitutions.
19
Phase
Thisphasehasintroducedmanymoreproductsandfacilitiesinthebankingsector
initsreformsmeasure.In1991,underthechairmanshipof M
Narasimham,acommiteewassetupbyhisnamewhichworkedforthe liberalization
ofbanking practices.
ThecountryisfloodedwithforeignbanksandtheirATM stations.Effortsare
beingputtogiveasatisfactoryservicetocustomers.Phonebankingandnet
Timeisgivenmoreimportancethanmoney.
ThefinancialsystemofIndiahasshownagreatdealofresilience.Itissheltered from
anycrisistriggeredbyanyexternalmacroeconomicsshockasotherEast
AsianCountriessuffered.Thisisalduetoaflexibleexchangerateregime,the
foreignreservesarehigh,thecapitalaccountisnotyetfulyconvertible,andbanks
20
INTRODUCTIONTOTHEORGANIZATION
BANKINGSYSTEMININDIA
TheBankingSysteminIndiaconsistsof:
1.ReserveBank
2.DevelopmentBanks
3.PublicSectorBank.
4.ForeignBanks
5.PrivateSectorBanks
6.CooperativeBanks
7.RegionalRuralBanks
TheReserveBankofIndia:-
TheReserveBankofIndiaistheCentralBankoftheCountryandcameinto being
bytheReserveBankofIndiaAct1934.Itwasnationalizedin 1948.
ReserveBankofIndiaisthebankthatissuesandregulatestheissueofcurrency
in India.ThebankertotheGovernmentofIndiaandtheStategovernments.It
managesthepublicdebt.Ithastheobligationtotransactthebankingbusinessof
Governmentandmakepaymentonitsbehalf.Thebanker’sbank.Commercial
21
banksmaintaintheircurrentaccountwiththeReserveBankofIndia.
Thebankthatmanagesthevolumeofcreditcreatedbythecommercialbanksto
ensurepricestability.
Thebankthatmanagestheexternalvalueofthecurency(Indianrupee).
DevelopmentBanks:-
Theseweresetuptogivelongtermfinanceforthedevelopmentofthecountry.
DevelopmentBankofIndia,TheIndustrialReconstructionBankofIndiaandthe
NationalBankforAgricultureandRuralDevelopment.Aformerdevelopmentbank,
theIndustrialCreditandInvestmentCorporationofIndiaLtd.byareversemerger
developmentbanks,havingoutlivedtheirutilitywouldalsobeeitherconvertedto
commercialbanksormergedwithcommercialbanks.
PublicSectorBanks:-
ThesearebankswhichtheGovernmenteitherownsorhasamajoritystakeinit.
ThelargestistheStateBankofIndiawhichwasformedbythemergerofthe
PresidencyBanks–theBankofBengal,theBankofBombay andtheBankof
Madrasin1921.ItwasthenknownastheImperialBank.Itwasnationalizedin
orassociates.
ForeignBanks:-
22
manyotherforeignbanks(optimisticinview ofIndia’sliberalization)opened branches in
theirbranches
PrivateSectorBanks:-
Thesearebankswhicharenotgovernmentownedorcontroled.Their shares
CooperativeBanks:-
CooperativeBanksarethosethatarecreatedbyagroupofindividualtosupport
eitheracommunityorareligiousgroup.Theyoperateinmetropolitan,urbanand
semiurbancenterstocatertotheneedsofsmalborrowers.
RegionalRuralBanks:-
ThesecameintobeingonOctober2,1975when5regionalrural bankswere
establishedunderwhatbecametheRegionalRuralBanksAct1975.Thesewereto
bridgethegapinruralcreditgrantingloansandadvancestosmalandmarginal
farmers,artisans,smalentrepreneurandpersonsofsmalmeansengagedin
operation.
LocalAreaBanks:-
23
LocalAreaBankscameintoexistencein1999andlicensesweregivenforthese
banksasitwasfeltthatregularcommercialbankswerenotfinancialtherural/
agriculturalsectoradequately.Licensesweregiventoopenbranchesinthree
districts.Branchesinurban/semiurbanareasweregrantedonlyafterten
brancheswereestablishedinruralareas/vilages.
Sectors Banks
CentralBank:- ReserveBankofIndia
PrivateBanks: AxisBank,BankofRajasthan·BharatOverseasBank·Catholic
Citibank·HSBC·StandardChartered
Foreign
24
Banks:-
Regional SouthMalabarGraminBank
RuralBanks:-
Cooperative TheAndamanandNicobarStateCo-operativeBankLtd.The
Banks:- ArunachalPradeshStateco-operativeApexBankLtd.TheAssam
Co-operativeApexBankLtdTheBiharStateCo-operativeBank
Ltd.TheChandigarhStateCo-operativeBankLtd.
INTRODUCTIONOFSBIBANK
HISTORYOFSBIBANK:-
TheevolutionofStateBankofIndiacanbetracedbacktothefirstdecadeofthe
19thcentury.ItbeganwiththeestablishmentoftheBankofCalcutainCalcuta,
on2June1806.ThebankwasredesignedastheBankofBengal,threeyearslater,
on2January1809.Itwasthefirsteverjoint-stockbankoftheBritishIndia,
establishedunderthesponsorshipoftheGovernmentofBengal.Subsequently,the
BankofBombay(establishedon15April1840)andtheBankofMadras
(establishedon1July1843)folowedtheBankofBengal.
AnimportantturningpointinthehistoryofStateBankofIndiaisthelaunchofthe
firstFiveYearPlanofindependentIndia,in1951.ThePlanaimedatservingthe
Indianeconomyingeneralandtheruralsectorofthecountry,inparticular.Until
thePlan,thecommercialbanksofthecountry,includingtheImperialBankofIndia,
confinedtheirservicestotheurbansector.Moreover,theywerenotequippedto
respondtothegrowingneedsoftheeconomicrevivaltakingshapeintherural
areasofthecountry.Therefore,inordertoservetheeconomyasawholeandrural
sectorinparticular.
TheAlIndiaRuralCreditSurveyCommiteeproposedthetakeoveroftheImperial
BankofIndia,andintegratingwithit,theformerstate-ownedorstate-associate
banks.Subsequently,anActwaspassedintheParliamentofIndiainMay1955.As
25
aresult,theStateBankofIndia(SBI)wasestablishedon1July1955.Thisresulted
inmakingtheStateBankofIndiamorepowerful,becauseasmuchasaquarterof
theresourcesoftheIndianbankingsystemwerecontroleddirectlybytheState.
Lateron,theStateBankofIndia(SubsidiaryBanks)Actwaspassedin1959.
TheStateBankofIndiaemergedasapaceseter,withitsoperationscarriedoutby
the480officescomprisingbranches,subofficesandthreeLocalHeadOffices,
inheritedfrom theImperialBank.Insteadofservingasmererepositoriesofthe
community'ssavingsandlendingtocreditworthyparties,theStateBankofIndia
cateredtotheneedsofthecustomers,bybankingpurposefuly.
StateBankofIndia(SBI)(LSE:SBID)isthelargestbankinIndia.
ThebanktracesitsancestrybackthroughtheImperialBankofIndiatothe
foundingin1806oftheBankofCalcuta,makingittheoldestcommercialbankin
theIndianSubcontinent.TheGovernmentofIndianationalisedtheImperialBank
ofIndiain1955,withtheReserveBankofIndiatakinga60%stake,andrenamedit
theStateBankofIndia.In2008,theGovernmenttookoverthestakeheldbythe
ReserveBankofIndia.
SBIprovidesarangeofbankingproductsthroughitsvastnetworkinIndiaand
overseas,includingproductsaimedatNRIs.Withanassetbaseof$126bilionand
itsreach,itisaregionalbankingbehemoth.SBIhaslaidemphasisonreducingthe
hugemanpowerthroughGoldenhandshakeschemes,whichledtoaflightofits
bestandbrightestmanagerswhichtooktoretirementalowancesandthenwent
onthebecomeseniormanagersatnewprivatesectorbanks,andcomputerizing
itsoperations.
TherootsoftheStateBankofIndiarestinthefirstdecadeof19thcentury,when
theBankofCalcuta,laterrenamedtheBankofBengal,wasestablishedon2June
1806.TheBankofBengalandtwootherPresidencybanks,namely,theBankof
Bombay(incorporatedon15April1840)andtheBankofMadras(incorporatedon
1July1843).Thesethreebanksreceivedtheexclusiverighttoissuepaper
26
curencyin1861withthePaperCurrencyAct,arighttheyretaineduntilthe
formationoftheReserveBankofIndia.ThePresidencybanksamalgamatedon27
January1921,andthereorganizedbankingentitytookasitsnameImperialBank
ofIndia.TheImperialBankofIndiacontinuedtoremainajointstockcompany.
PursuanttotheprovisionsoftheStateBankofIndiaAct(1955),theReserveBank
ofIndia,whichisIndia'scentralbank,acquiredacontrolinginterestintheImperial
BankofIndia.On30April1955theImperialBankofIndiabecametheStateBank
ofIndia.In1959theGovernmentpassedtheStateBankofIndia(SubsidiaryBanks)
Act,enablingtheStateBankofIndiatotakeovereightformerState-associated
banksasitssubsidiaries.OnSept13,2008,StateBankofSaurashtra,oneofits
AssociateBanks,mergedwithStateBankofIndia.
Associatebanks:-
TherearesixassociatebanksthatfalunderSBI,andtogetherthesesixbanks
constitutetheStateBankGroup.Alusethesamelogoofabluekeyholeandalthe
associatesusethe"StateBankof"namefolowedbytheregionalheadquarters'
name.Originaly,thethensevenbanksthatbecametheassociatebanksbelonged
toprincelystatesuntilthegovernmentnationalizedthemin1959.Intunewiththe
firstFiveYearPlan,emphasizingthedevelopmentofruralIndia,thegovernment
integratedthesebanksintoStateBankofIndiatoexpanditsruraloutreach.There
hasbeenaproposaltomergealtheassociatebanksintoSBItocreatea"mega
bank"andstreamlineoperations.Thefirststepalongtheselinesoccuredin
September2008whenStateBankofSaurashtramergedwithStateBankofIndia,
whichreducedthenumberofstatebanksfromseventosix.
StateBankofIndore
StateBankofBikaner&Jaipur
StateBankofHyderabad
StateBankofMysore
StateBankofPatiala
StateBankofTravancore
27
Growth:-
StateBankofIndiahasoftenactedasguarantortotheIndianGovernment,most
notablyduringChandraShekhar'stenureasPrimeMinisterofIndia.Withmore
than11,111branchesandafurther6500+associatebankbranches,theSBIhas
extensivecoverage.StateBankofIndiahaselectronicalynetworkedalofits
branchesunderCoreBankingSystem(CBS).ThebankhasoneofthelargestATM
networksintheregion.Morethan8500ATMsacrossIndia.TheStateBankofIndia
hashadsteadygrowthoveritshistory,thoughitwasmaredbytheHarshadMehta scam
in1992.Inrecentyears,thebankhassoughttoexpanditsoverseas
operationsbybuyingforeignbanks.ItistheonlyIndianbanktofeatureinthetop
100worldbanksintheFortuneGlobal500ratingandvariousotherrankings.Group
companies:-
SBICapitalMarketsLtd
SBIMutualFund(ATrust)
SBIFactorsandCommercialServicesLtd
SBIDFHILtd
SBICardsandPaymentServicesPvtLtd
SBILifeInsuranceCo.Ltd-Bancassurance(LifeInsurance)
SBIFundsManagementPvtLtd
SBICanada
Establishment:-
TheestablishmentoftheBankofBengalmarkedtheadventoflimitedliability,joint
-stockbankinginIndia.Sowastheassociatedinnovationinbanking,viz.the
decisiontoalowtheBankofBengaltoissuenotes,whichwouldbeacceptedfor
paymentofpublicrevenueswithinarestrictedgeographicalarea.Thisrightofnote
issuewasveryvaluablenotonlyfortheBankofBengalbutalsoitstwosiblings,
theBanksofBombayandMadras.Itmeantanaccretiontothecapitalofthebanks,
acapitalonwhichtheproprietorsdidnothavetopayanyinterest.
28
Theconceptofdepositbankingwasalsoaninnovationbecausethe
practiceofacceptingmoneyforsafekeeping(andinsomecases,eveninvestment
onbehalfoftheclients)bytheindigenousbankershadnotspreadasageneral
habitinmostpartsofIndia.But,foralongtime,andespecialyuptothetimethat
thethreepresidencybankshadarightofnoteissue,banknotesandgovernment
balancesmadeupthebulkoftheinvestibleresourcesofthebanks.
Thethreebanksweregovernedbyroyalcharters,whichwererevisedfromtimeto
time.Eachcharterprovidedforasharecapital,four-fifthofwhichwereprivately
subscribedandtherestownedbytheprovincialgovernment.Themembersofthe
boardofdirectors,whichmanagedtheaffairsofeachbank,weremostly
proprietarydirectorsrepresentingthelargeEuropeanmanagingagencyhousesin
India.Therestweregovernmentnominees,invariablycivilservants,oneofwhom
waselectedasthepresidentoftheboard.
Business:-
Thebusinessofthebankswasinitialyconfinedtodiscountingofbilsofexchange
orothernegotiableprivatesecurities,keepingcashaccountsandreceiving
depositsandissuingandcirculatingcashnotes.LoanswererestrictedtoRs.one
lakhandtheperiodofaccommodationconfinedtothreemonthsonly.Thesecurity
forsuchloanswaspublicsecurities,commonlycaledCompany'sPaper,bulion,
treasure,plate,jewels,orgoods'notofaperishablenature'andnointerestcould
bechargedbeyondarateoftwelvepercent.Loansagainstgoodslikeopium,
indigo,saltwoolens,coton,cotonpiecegoods,muletwistandsilkgoodswere
alsograntedbutsuchfinancebywayofcashcreditsgainedmomentumonlyfrom
thethirddecadeofthenineteenthcentury.Alcommodities,includingtea,sugar
andjute,whichbegantobefinancedlater,wereeitherpledgedorhypothecatedto thebank.
Majorchangeintheconditions:-
AmajorchangeintheconditionsofoperationoftheBanksofBengal,Bombayand
29
Madrasoccurredafter1860.WiththepassingofthePaperCurencyActof1861,
therightofnoteissueofthepresidencybankswasabolishedandtheGovernment
ofIndiaassumedfrom 1March1862thesolepowerofissuingpapercurency
withinBritishIndia.Thetaskofmanagementandcirculationofthenewcurrency
noteswasconferredonthepresidencybanksandtheGovernmentundertookto
transfertheTreasurybalancestothebanksatplaceswherethebankswouldopen
branches.Noneofthethreebankshadtilthenanybranches(exceptthesole
atemptandthattooashort-livedonebytheBankofBengalatMirzaporein1839)
althoughthechartershadgiventhem suchauthority.Butassoonasthethree
presidencybandswereassuredofthefreeuseofgovernment
PresidencyBanksAct:-
ThepresidencyBanksAct,whichcameintooperationon1May1876,broughtthe
threepresidencybanksunderacommonstatutewithsimilarrestrictionson
business.TheproprietaryconnectionoftheGovernmentwas,however,terminated,
thoughthebankscontinuedtoholdchargeofthepublicdebtofficesinthethree
presidencytowns,andthecustodyofapartofthegovernmentbalances.TheAct
alsostipulatedthecreationofReserveTreasuriesatCalcuta,BombayandMadras
into which sumsabovethespecified minimum balancespromised to the
presidencybanksatonlytheirheadofficesweretobelodged.TheGovernment
couldlendtothepresidencybanksfrom suchReserveTreasuriesbutthelater
couldlookuponthemmoreasafavourthanasaright.
BankofMadras:-
ThedecisionoftheGovernmentto keepthesurplusbalancesinReserve
30
Treasuriesoutsidethenormalcontrolofthepresidencybanksandtheconnected
decisionnottoguaranteeminimum governmentbalancesatnewplaceswhere
branchesweretobeopenedeffectivelycheckedthegrowthofnewbranchesafter
1876.Thepaceofexpansionwitnessedinthepreviousdecadefelsharply
although,inthecaseoftheBankofMadras,itcontinuedonamodestscaleasthe
profitsofthatbankweremainlyderivedfromtradedispersedamonganumberof
porttownsandinlandcentersofthepresidency.
Indiawitnessedrapidcommercializationinthelastquarterofthenineteenth
centuryasitsrailwaynetworkexpandedtocoveralthemajorregionsofthe country.New
irrigationnetworksinMadras,PunjabandSindacceleratedthe
processofconversionofsubsistencecropsintocashcrops,aportionofwhich
founditswayintotheforeignmarkets.Teaandcoffeeplantationstransformed
largeareasoftheeasternTerais,thehilsofAssamandtheNilgirisintoregionsof
estateagricultureparexcelence.AltheseresultedintheexpansionofIndia's
internationaltrademorethansix-fold.
Thethreepresidencybankswerebothbeneficiariesandpromotersofthis
commercializationprocessastheybecameinvolvedinthefinancingofpracticaly
everytrading,manufacturingandminingactivityinthesub-continent.
WhiletheBanksofBengalandBombaywereengagedinthefinancingoflarge
modernmanufacturingindustries,theBankofMadraswentintothefinancingof
largemodernmanufacturing
industries,theBankofMadraswentintothefinancingofsmal-scaleindustriesin
31
awaywhichhadnoparalelelsewhere.Butthethreebankswererigorously
excludedfrom anybusinessinvolvingforeignexchange.Notonlywassuch
businessconsideredriskyforthesebanks,whichheldgovernmentdeposits,itwas
alsofearedthatthesebanksenjoyinggovernmentpatronagewouldofferunfair
competitiontotheexchangebankswhichhadbythenarivedinIndia.This
exclusioncontinuedtilthecreationoftheReserveBankofIndiain1935.
PresidencyBanksofBengal:-
ThepresidencyBanksofBengal,BombayandMadraswiththeir70brancheswere
mergedin1921toformtheImperialBankofIndia.Thetriadhadbeentransformed
intoamonolithandagiantamongIndiancommercialbankshademerged.The
newbanktookonthetripleroleofacommercialbank,abanker'sbankanda
bankertothegovernment.
Butthiscreationwasprecededbyyearsofdeliberationsontheneedfora'State
BankofIndia'.Whateventualyemergedwasa'half-wayhouse'combiningthe
functionsofacommercialbankandaquasi-centralbank.
TheestablishmentoftheReserveBankofIndiaasthecentralbankofthecountry
in1935endedthequasi-centralbankingroleoftheImperialBank.Thelater
ceasedtobebankerstotheGovernmentofIndiaandinstead
BecameagentoftheReserveBankforthetransactionofgovernmentbusinessat
32
centersatwhichthecentralbankwasnotestablished.
Butitcontinuedtomaintaincurrencychestsandsmalcoindepotsandoperate
theremitancefacilitiesschemeforotherbanksandthepublicontermsstipulated
bytheReserveBank.Italsoactedasabankers'bankbyholdingtheirsurpluscash
andgrantingthemadvancesagainstauthorizedsecurities.
Themanagementofthebankclearinghousesalsocontinuedwithitatmany
placeswheretheReserveBankdidnothaveoffices.Thebankwasalsothe
biggesttenderedattheTreasurybilauctionsconductedbytheReserveBankon
behalfoftheGovernment.
TheestablishmentoftheReserveBanksimultaneouslysawimportant
amendmentsbeingmadetotheconstitutionoftheImperialBankconvertingitinto
apurelycommercialbank.
ImperialBank:-
TheImperialBankduringthethreeandahalfdecadesofitsexistencerecordedan
impressivegrowthintermsofoffices,reserves,deposits,investmentsand
advances,theincreasesinsomecasesamountingtomorethansix-fold.
Thefinancialstatusandsecurityinheritedfromitsforerunnersnodoubtprovideda
firm anddurableplatform.ButtheloftytraditionsofbankingwhichtheImperial
Bankconsistentlymaintainedandthehighstandardofintegrityitobservedinits
operationsinspiredconfidenceinitsdepositorsthatnootherbankinIndiacould
perhapsthenequal.AltheseenabledtheImperialBanktoacquireapre-eminent
33
positionintheIndianbankingindustryandalsosecureavitalplaceinthecountry's
economiclife.
StampofImperialBankofIndia
Subsidiaries:-
TheStateBankGroupincludesanetworkofeightbankingsubsidiariesand
severalnon-bankingsubsidiaries.Throughtheestablishments,itoffersvarious
services,primarydealershipingovernmentsecurities,creditcards.
Theeightbankingsubsidiariesare:
34
11.StateBankofBikanerandJaipur(SBBJ)
12.StateBankofHyderabad(SBH)
13.StateBankofIndia(SBI)
14.StateBankofIndore(SBIR)
15.StateBankofMysore(SBM)
16.StateBankofPatiala(SBP)
17.StateBankofSaurashtra(SBS)
18.StateBankofTravancore(SBT)
Products
PersonalBanking:-
SBITermDepositsSBILoanForPensioners
SBIRecurringDepositsLoanAgainstMortgageOfProperty
SBIHousingLoanLoanAgainstShares&Debentures
SBICarLoanRentPlusScheme
SBIEducationalLoanMedi-PlusScheme
OtherServices:-
35
Agriculture/RuralBanking
NRIServices
ATMServices
DematServices
CorporateBanking
InternetBanking
MobileBanking
InternationalBanking
SafeDepositLocker
RBIEFT
E-Pay
E-Rail
SBIVishwaYatraForeignTravelCard
BrokingServices
GiftCheques
NETWORKOFSBIBANK:-
SBIBankIndiahas52ForeignOfficesin34countries.SBIIndiaservesthe
internationalneedsofitsforeigncustomers,inadditiontoconductingretail
operations.ThefocusoftheofficesofSBIisIndia-relatedbusiness.Fewofthe
countrieswhereSBIBankhasbranchesareasunder:
Australia
Bahamas
Bahrain
Bangladesh
Belgium
Bhutan
Canada
France
36
Germany
HongKong
Japan
Maldives
Mauritious
Muscat
Nepal
Nigeria
Oman
Russia
Singapore
SriLanka
SouthAfrica
UK
USA
StructureofOrganization:-
CentralBoardofStateBankofIndia
th
(Ason13 January2009)
BOARDOFDIRECTORS
Sec.ofSBIAct,
Sr.No. NameofDirector
1955
ShriO.P.Bhat
1. 19(a)
Chairman
2. ShriS.K.Bhatacharyya 19(b)
MD&CC&RO
ShriR.Sridharan
3. 19(b)
MD&GE(A&S)
37
4. Dr.AshokJhunjhunwala 19(c)
5. ShriDileepC.Choksi 19(c)
6. ShriS.Venkatachalam 19(c)
7. Shri.D.Sundaram 19(c)
8. Dr.DevaNandBalodhi 19(d)
9. Prof.Mohd.SalahuddinAnsari 19(d)
Smt.ShyamalaGopinath
13. 19(f)
PERFORMANCEOFSBIBANK
INVESTORRELATIONS:-
StateBankofIndia,thecountry’slargestcommercialBankintermsofprofits,
assets,deposits,branchesand employees,welcomesyou to its‘Investors
Relations’Section.SBI,withitsheritagedatingbacktotheyear1806,strivesto
continuouslyprovidelatestanduptodateinformationonitsfinancialperformance.
Itisourendeavortowalkonthepathoftransparencyandalowcompleteaccess
toalthestakeholdersenablingtotalawarenessabouttheBank.TheBank
communicateswiththestakeholdersthroughavarietyofchannels,suchas throughe-
mail,website,conferencecal,one-on-onemeeting,analysts’meetand
atendanceatInvestorConferencethroughouttheworld.
Pleasefindbelow Bank’sfinancialresults,analysisofperformanceandother
highlightswhichwilbeofinteresttoInvestors,FundManagersandAnalysts.SBI
hasalwaysbeenfundamentalystronginitscorebusinesswhichismirrored
38
SBIFINANCIALHIGHLIGHTS:-
PAST5YEARS
TABLEI
STATEBANKOFINDIA-FINANCIALHIGHLIGHTS2002-07
39
Non-InterestIncome 41.74 57.40 76.12 71.20 74.35 57.69
OperatingProfit
60.44 77.76 95.53 109.91 112.99 100.00
TotalProvisions
36.14 46.70 58.72 66.86 68.93 54.59
TABLEI
STATEBANKOFINDIA-FINANCIALHIGHLIGHTS2002-07
(INUS$)
Investments
29.74 36.29 42.47 45.06 36.43 34.31
TotalAssets
71.36 79.15 93.28 105.13 110.73 130.33
40
InterestExpenses
4.25 4.45 4.41 4.23 4.57 5.39
NetInterestIncome
1.86 2.10 2.56 3.18 3.49 3.69
Non-InterestIncome
0.86 1.21 1.74 1.63 1.66 1.33
StaffExpenses
1.06 1.20 1.47 1.58 1.82 1.82
OverheadExpenses
0.42 0.47 0.64 0.72 0.81 0.90
OperatingProfit
1.24 1.64 2.19 2.51 2.52 2.30
TotalProvisions
0.74 0.98 1.34 1.53 1.54 1.26
TABLEI
STATEBANKOFINDIA
KEYFINANCIAL
FY2002FY2003FY2004FY2005FY2006FY2007
INDICATORS(%)
41
Cost/IncomeRatio 54.40 50.53 49.18 47.83 58.70 54.18
ProvisionCoverage 56 54 57 57 49 47
TABLEIV
SUMMARYOFSTATEBANKOFINDIA’SBALANCESHEET
(Rs.in
bilion) MARCHMARCHMARCHMARCHMARCH MARCH
2002 2003 2004 2005 2006 2007
Deposits 2705.602961.233186.193670.483800.464355.21
42
Other
Liabilities& 531.20 532.46 555.34 495.79 556.98 600.42
Provisions
Total
ASSETS 3482.283758.764078.154598.834940.295665.65
Cash&
balances
with
Reserve 218.73 127.38 190.41 168.10 216.53 290.76
Bankof
India
Balances
withbank
andmoney 430.58 324.43 245.25 225.12 229.07 228.92
atcal&
shortnotice
Investments 1451.421723.481856.761970.981625.341491.49
Advances 1208.061377.581579.342023.742618.013373.36
Fixed
Assets 24.15 23.89 26.45 26.98 27.53 28.19
Other
Assets 149.34 182.01 179.94 183.91 223.81 252.92
Total 3482.283758.74078.154598.834940.295665.65
Contingent1022.131061.061118.921593.972288.513065.90
Liabilities
SUMMARYOFSTATEBANKOFINDIA’SBALANCESHEET
Cash&balanceswith
4.48 2.68 4.35 3.84 4.85 6.69
ReserveBankofIndia
44
TABLEVI
STATEBANKOFINDIAMARKETRELATEDRATIOS
MARKETRELATEDRATIOS MAR03MAR04MAR05MAR06MAR07
SBIPersonalLoansalsoknownasStateBankofIndiapersonalfinanceschemes,
aimtoprovidethenecessaryfinancialassistancetoasmanypeopleaspossibleto
helpthemrealizetheirdreamsorcomeoutofsituationsoffinancialneed.State
BankofIndiabeingIndia'slargestbankisatrustednameandtheSBIpersonal
loanratesofinterestarekeptatthemostcompetitiveleveltomakeapersonal
loanasapproachable.
ThemostpopularSBIpersonalloansincludehousingloans,carloans,education
loan,loansagainstproperty,sharesordebentures,reversemortgageloansand
more.
StateBankofIndiaHousingLoanorSBIHomeLoanisavailableincomplete
transparencyandatnohiddencosts.Theinterestratesarechargedondaily
reducingbasis.
facilitiesandinclusionofaladditionalchargeslikevehicleregistration,insurance, one-
timeroadtaxandcaraccessories.StateBankofIndiaofferscarloansfor
purchaseofalkindsofpersonaluseandcommercialvehicles.
StateBankofIndiaoffersEducationLoantoIndiannationalsforpursuinghigher
studieswithinthecountryorabroad.TheSBIeducationloancoversthetravel
expenses,tuitionfees,examinationfees,costsofbooksandothercoursematerial
50
andstationery,refundablecautiondeposits,expensesforpurchaseofcomputers
necessaryforthecourseandalsoatwo-wheelerconveyanceuptoRs.50,000in
costsalongwithanyothermajorexpensesmandatorytothecourse.
PersonalLoanagainstThirdPartySecurityofNSC/IVP/RBIReliefBondsetc.:-
Tenure RateofInterest
Upto3years 1.00%aboveSBARi.e.13.25%p.a.
0.25%aboveSBARi.e.12.50%p.a.
Above3yearsupto6years
51
(FAQ)PERSONALLOAN
Q.Whataremyloanlimits?
A.Yourpersonalloanlimitwouldbedeterminedbyyourincomeandrepayment
capacity.NormalyyoucanavailaloanuptoRs.2.50lacs.However,ifinmetrosof
NewDelhi,Mumbai,Bangalore,Chennai,HyderabadandKolkata,salaried
individualsorself-employedprofessionalscanavailPersonalLoanuptoRs.5.00
lacs.Ifthesalaryofasalariedindividualiscreditedtohis/heraccountwithour Bankoraself-
employedprofessionalhasbeenmaintainingasatisfactorily
conductedaccountwithus,aPersonalLoanofuptoRs.10lacscanbesanctioned.
Q.Canmyspouse’sincomebeincludedforcalculatingthe loanamount?
A.Yes,yourspouse'sincomecanbeincludedprovidedhe/sheguaranteestheloan
ortheloanistakenjointly.
Q.WhataretheimportantdocumentsthatIneedtoprovide?
A.Youwilneedtofurnishonlythefolowingdocumentsifyouareanexisting
customeroftheBank:
-Passportsizephotograph
-Proofofofficialaddressforselfemployedindividualsandprofessionals.Thiscan
includeshopandestablishmentcertificate/Leasedeed/TelephoneBil
-LatestSalaryclipandForm16,inthecaseofsalariedpersons
Q.DoIhavetopledgesomeformofsecurity?
A.Nosecurityisrequired.
52
Q.Whatistherepaymentschedulelike?
A.TheminimumamountthatyouareexpectedtopayeverymonthistheEMI.You
arealowedtopaymorethantheEMIifyouwishto,andwedonotchargeany
prepaymentpenalty.
Q.WhatisEMI?
A.EMIstandsforEquatedMonthlyInstalments.Thisinstalmentcomprisesboth
principalandinterestcomponents.UsetheEMIcalculatortofindoutyourmonthly
paymentsbasedontheloanamount,therateofinterestandtherepaymentperiod.
Choosethecombinationthatbestmeetsyourfinancialresourcesand requirements.
Q.CanIprepaytheloan?Arethereanypenalties?
A.Yes,youcanprepaytheloanpartlyorfuly,atanystage,withoutanyprepayment
penalty.
Q.Whatistheprocessingfee?Arethereanyothercharges?
A.Processingchargesare1percentoftheloanamount.Thisisamongstthe
lowestfeesintheindustry.Processingfeeshavetobepaidupfront.Thereareno
hiddencostsorotheradministrativecharges.
Q.DoIhavetheoptionofchoosingafixedorfloatingratefortheloan?
A.Youhavetheoptiontoavailtheloanwitheitherafixedinterestrateorafloating
one.Inthecaseofafixedrateloan,theinterestrateontheloanwilremainfixed
throughtheentiretenureoftheloan,whereasinthecaseofafloatingrateloan,
theinterestratecoulddeclineorriseinlinewiththechangesintheBank'sMedium
TermLendingRate(SBMTLR).
Q.HowdoesSBIPersonalloancomparewiththoseofferedbyotherbanks?
A.Thereistotaltransparencywithregardtotherateofinterestandthefees
chargedbyus.
-Weofferpersonalloansatthecheapestratesofinterest,withnosecurityor
colateral
-Weofferloansforthelongesttenors(48months),withtheflexibilityprovidedto
reducethetenorbyprepayingtheloanwithoutanypenalty.
53
-Weprovidefinanceforanypersonalneedorrequirement,thetotalamountbeing
determinedonthebasisofrepayingcapacity.
-WithanSBIpersonalloanyoucanchoosebetweenfixedratesofinterestand
floatinginterestrates.
INTRODUCTIONOFHDFCBANK
Background
HDFCwasincorporatedin1977withtheprimaryobjectiveofmeetingasocial
Need–thatofpromotinghomeownershipbyprovidinglong-term financeto
householdsfortheirhousingneeds.HDFCwaspromotedwithaninitialshare
capitalofRs.100milion.
BusinessObjectives
TheprimaryobjectiveofHDFCistoenhanceresidentialhousingstockinthe
Countrythroughtheprovisionofhousingfinanceinasystematicandprofessional
Manner,andtopromotehomeownership.Anotherobjectiveistoincreasetheflow
ofresourcestothehousingsectorbyintegratingthehousingfinancesectorwith
theoveraldomesticfinancialmarkets.
OrganizationalGoals
HDFC’smaingoalsareto
a)Developcloserelationshipswithindividualhouseholds.
b)Maintainitspositionasthepremierhousingfinanceinstitutioninthecountry,
c)Transformideasintoviableandcreativesolutions.
54
d)Provideconsistentlyhighreturnstoshareholders.
e)TogrowthroughdiversificationbyleveragingofftheExistingclient.
HISTORYOFHDFCBANK
TheHousingDevelopmentFinanceCorporationLimited(HDFC)wasamongstthe
firsttoreceivean'inprinciple'approvalfromtheReserveBankofIndia(RBI)toset
upabankintheprivatesector,aspartoftheRBI'sliberalizationoftheIndian
BankingIndustryin1994.ThebankwasincorporatedinAugust1994inthename
of'HDFCBankLimited',withitsregisteredofficeinMumbai,India.HDFCBank
commencedoperationsAsaScheduledCommercialBankon16thJanuary1995.
Intheyear1998HDFCBankhadtiedupwiththeAhmadabadStockExchange(ASE)
toactasitsclearingbank
BusinessFocus:-
HDFCBank'smissionistobeaWorld-ClassIndianBank.Theobjectiveistobuild
soundcustomerfranchisesacrossdistinctbusinessessoastobetheprefered
providerofbankingservicesfortargetretailandwholesalecustomersegments,
andtoachievehealthygrowthinprofitability,consistentwiththebank'srisk
appetite.Thebankiscommitedtomaintainthehighestlevelofethicalstandards,
professionalintegrity,corporategovernanceandregulatorycompliance.
55
SubsidiaryandAssociateCompanies
ThesubsidiariesofHDFCconsistsof
1.HDFCBank
2.HDFCMutualFund
3.HDFCStandardLifeInsuranceCompany
4.HDFCRealty
5.HDFCChubbGeneralInsuranceCompanyLimited.
6.IntelnetGlobalServicesLimited
7.CreditInformationBureau(India)Limited
8.OtherCompaniesCo–PromotedbyHDFC
HDFCTrusteeCompanyLtd.
GRUHFinanceLtd.
HDFCDevelopersLtd.
HDFCVentureCapitalLtd.
HDFCVentureTrusteeCompanyLtd
HDFCSecuritiesLtd.
HDFCHoldingLtd.
HomeLoanServicesIndiaPvt.Ltd.
56
HDFCBANK
TheOrganization:-
TheHousingDevelopmentFinanceCorporationLimited(HDFC)wasamongstthe
firsttoreceivean'inprinciple'approvalfromtheReserveBankofIndia(RBI)toset
upabankintheprivatesector,aspartoftheRBI'sliberalisationoftheIndian
BankingIndustryin1994.ThebankwasincorporatedinAugust1994inthename
of'HDFCBankLimited',withitsregisteredofficeinMumbai,India.HDFCBank
commencedoperationsAsaScheduledCommercialBankon16thJanuary1995.
Intheyear1998HDFCBankhadtiedupwiththeAhmadabadStockExchange(ASE)
toactasitsclearingbank.
CapitalStructure:-
TheauthorizedcapitalofHDFCBankisRs.450crore(Rs.4.5bilion).Thepaid-up
capitalisRs.311.9crore(Rs.3.1bilion).TheHDFCGroupholds22.1%ofthe
bank'sequityandabout19.4%oftheequityisheldbytheADSDepository(in
respectofthebank'sAmericanDepositoryShares(ADS)Issue).Roughly31.3%of
theequityisheldbyForeignInstitutionalInvestors(FIs)andthebankhasabout
190,000shareholders.ThesharesarelistedontheTheStockExchange,Mumbai
andtheNationalStockExchange.
57
TimesBankAmalgamation:-
InamilestonetransactionintheIndianbankingindustry,TimesBankLimited
(anothernewprivatesectorbankpromotedbyBennet,Coleman&Co./Times
Group)wasmergedwithHDFCBankLtd.,effectiveFebruary26,2000.Asperthe
schemeofamalgamationapprovedbytheshareholdersofbothbanksandthe
ReserveBankofIndia,shareholdersofTimesBankreceived1shareofHDFCBank
forevery5.75sharesofTimesBank.Theacquisitionaddedsignificantvalueto
HDFCBankintermsofincreasedbranchnetwork,expandedgeographicreach,
enhancedcustomerbase,skiledmanpowerandtheopportunitytocross-seland
leveragealternativedeliverychannels.
58
ORGANIZATIONALSTRUCTUREOFHDFCBANK:-
BoardofDirectors:-
1.Mr.JagdishKapoor
2.AdityaPuri
3.RanuKamad
4.VineetJain
5.ArvindPande
6.GautamDivan
7.CMVasudav
Mr.JagdishKapoortookoverasthebank'sChairmaninJuly2001.Priortothis,
Mr.KapoorwasaDeputyGovernoroftheReserveBankofIndia.
TheManagingDirector,Mr.AdityaPuri,hasbeenaprofessionalbankerforover25
years,andbeforejoiningHDFCBankin1994washeadingCitibank'soperationsin
Malaysia.
TheBank'sBoardofDirectorsiscomposedofeminentindividualswithawealthof
experienceinpublicpolicy,administration,industryandcommercialbanking.
SeniorexecutivesrepresentingHDFCarealsoontheBoard.
59
ThemanagementconsistsoftheChairmanMrJagdishkapoorand9other
Directorsthatassisthiminachievingobjectivesofthebank.
MR.JagdishKapoor
Mr.JagdishKapoorholdsaMastersdegreeinCommerceandisaFelow member
ofIndianInstituteofBankingandFinance.PriortojoiningtheBank,Mr.Kapoor
wastheDeputyGovernoroftheReserveBankofIndia.HeretiredasDeputy
GovernorofReserveBankofIndiaafterservingfor39years.WhilewithReserve
BankofIndia,Mr.KapoorwastheChairmanoftheDepositInsuranceandCredit
GuaranteeCorporationofIndiaandBharatiyaReserveBankNoteMudranLimited.
HealsoservedontheboardsofExportImportBankofIndia,NationalHousing
Bank,NationalBankforAgricultureandRuralDevelopment(NABARD)andState
BankofINDIA.
60
MR.AdityaPuri.
Mr.AdityaPuriholdsaBachelorsdegreeinCommercefromPunjabUniversityand
isanassociatememberoftheInstituteofCharteredAccountantsofIndia.Mr.
AdityaPurihasbeentheManagingDirectoroftheBanksinceSeptember1994.
Mr.KeKiM.Mistry
Mr.MistryisViceChairman&ManagingDirectorofHousingDevelopmentFinance
CorporationLimitedandChairmanofGRUHFinanceLimited.HeisalsoaDirector
ontheBoardofHDFCDevelopersLimited,HDFCStandardLifeInsuranceCo.Ltd,
HDFCGeneralInsuranceCompanyLimited,InfrastructureLeasing&Financial
ServicesLimited,SunPharmaceuticalIndustriesLimited,TheGreatEastern
ShippingCompanyLimited,NexGenPublishingLimited,IndiaValueFundAdvisors
PrivateLimited,HDFCAssetManagementCompanyLimited,Greatship(India)
Limited,GrihaInvestments-MauritiusandAssociationofLeasing& Financial
ServicesCompanies.
Mr.VineetJain
61
Mr.JainisManagingDirectorofBennet,Coleman&Co.LimitedandDirectorin
TimesInfotainmentMediaLimited,EntertainmentNetwork(India)Limited,Optimal
MediaSolutionsLimited,ThePressTrustofIndiaLimited,TimesInternetLimited,
TimesGlobalBroadcastingCompanyLimited,BharatNidhiLimited,TimesJournal
IndiaPrivateLimited,WorldwideMediaPrivateLimited,.
Mrs.RenuKarnad
Mrs.KarnadisaJointManagingDirectorofHousingDevelopmentFinance
CorporationLimitedandChairpersonofHDFCVentureCapitalLimited,HDFC
PropertyVenturesLimitedandHomeLoanServicesIndiaPrivateLimited.Sheisa
DirectorofHDFCAssetManagementCompanyLimited,GRUHFinanceLimited,
HDFCRealtyLimited,CreditInformationBureau(India)Limited,HDFCGeneral
InsuranceCompanyLimited,ICIIndiaLimited,IndraprasthaMedicalCorporation
Limited,HDFCStandardLifeInsuranceCompanyLimited,SparshBPOServices
Limited,MotherDairyFruits&VegetablesPrivateLimited,FeedbackVentures
PrivateLimited,MotorIndustriesCo.Limited,EgyptianHousingFinanceCompany
andAscendasPte.Limited,Singapore.
62
Mr.ArvindPande
HewasaJointSecretarytothePrimeMinisterofIndiaforEconomics,Science
andTechnologyissues.Mr.PandehasservedasaDirector,Departmentof
EconomicAffairs,MinistryofFinance,GovernmentofIndiaandhasdealtwith
WorldBankaidedprojects.Mr.PandehasalsoservedontheBoardofSteel
AuthorityofIndiaLimitedasitsChairmanandChiefExecutiveOfficer(CEO).
Mr.AshimSamanta
Hehasvastexperienceinthefieldofbulkdrugsandpharmaceuticalformulations.
HeisaDirectorofSamantaOrganicsPrivateLimited,NautilusTrading&Leasing
PrivateLimited,AshishRangUdyogPrivateLimited,SamantaMoviesPrivate
LimitedandShaktiCineStudiosPrivateLimited.Mr.Samantahasalsobeen
engagedinsetingupandrunningoffilmeditinganddubbingstudio.
Mr.GautamDivan
Mr.DivanisontheBoardofHDFCStandardLifeInsuranceCompanyLimited,
BalticConsultancy&ServicesPrivateLimited,BelCeramicsLimited,Brady&
MorrisEngineeringCompanyLimited,ChandanbhoyandJassoobhoyConsultants
63
PrivateLimited,SerendibInvestmentsPrivateLimitedandAscentHotelsPrivate
Limited.
Dr.PanditPalande
Dr.Palandehasextensiveexperienceofworkinginthefieldsofbusiness
administration,managementandagriculture.UndertheguidanceofDr.Palande,
YCMOUhasbecomeoneofthegreenuniversitiesinIndia.AsaprojectDirectorof
IndianSpaceResearchOrganisation(ISRO)GAP-3ofYCMOU,Dr.Palandehas
beenservingtheagriculturecommunityonalargescalethroughsatelite.
ProductsandServices–HDFCBank
Productrange:
ThefolowingistheproductrangeofferedatHDFC:Whilevariousdepositproducts
offeredbythebankareassigneddifferentnames,thedepositproductscanbe
categorizedbroadlyintothefolowingtypes.Definitionofmajordepositschemes
areasunder:-
1.Demanddeposits:
"DemandDeposits"meansadepositreceivedbythebankwhichiswithdrawnable
ondemand;
a)SavingsAccount:
"SavingsDeposits"meansaform ofDemandDepositwhichissubjectto
64
restrictionsastothenumberofwithdrawalsasalsotheamountsofwithdrawals
permitedbythebankduringanyspecifiedperiod;HDFCprovideswithsavingbank
accountwiththeusualfacilities,andonealsogetsafreeATM card,intrbranch
banking,bilpaymentfacilities,phonebankingandmobilebanking.
2.TermDeposits:
"TermDeposit"meansadepositreceivedbythebankforafixedperiodwithdraw
ableonlyaftertheexpiryofthefixedperiodandincludesdepositssuchas
Recurring/DoubleBenefitDeposits.
3.NoticeDeposit:
'NoticeDeposit'meansTerm Depositforaspecificperiodbutwhichcanbe
withdrawnongivingatleastonecompletebankingday'snotice.
4.CurrentAccount:
"CurrentAccount"meansaformofDemandDepositwherefromwithdrawalsare
alowedanynumberoftimesdependinguponthebalanceintheaccountoruptoa
particularagreedamountandwilalsoincludeotherdepositaccountswhichare
neitherSavingsDepositnorTermDeposit;Theaccountholdergetsapersonalized
chequebook,monthlyaccountstatements,andInter-branchbanking.
5.CorporateAccount:-
ThesearemorecommonlyknownasSalaryAccounts.TheseareaccountinHDFC
65
bankwithzerobalance.Thesearegiventosalariedpeople.Theseaccountsare
openedbytheemployerfortheemployeestodepositthesalaryoftheemployee
directlytotheaccount.
6.HDFCBankPreferred:-
A preferentialSavingsAccountwherein,oneisassignedwithadedicated
RelationshipManager,who’syou’retheonepointcontact.Onealsogetprivileges
likefeewaivers,enhancedATM withdrawallimit,prioritylockeralotment,free
DematAccountandlowerinterestratesonloans.
7.Sweep-InAccount:-
AFixedDepositlinkedtoone’sSavingsAccount.So,evenifone’sSavingsAccount
runsabitshort,onecanissueacheque(oruseATMCard).
8.SuperSaverAccount:-
Itgivesoneanoverdraftfacilityupto75%ofone’sfixeddeposit.Inanemergency,
youcanaccessyourfundswhileyourfixeddepositcontinuestoearnhighinterest.
9.HDFCBankPlus:-
11.DematAccount:
66
Onecanconducthassle-freetransactionsonthestockmarketforone’sshares.
Thesharesheldbythecustomerareprotectedfrom damage,lossandtheft,by
maintainingthesesharesinelectronicform.Thisaccountcanbeaccessed
throughInternettoo.
12.Loans:
Thereareavarietyofloanschemesofferedlikepersonalloans,newcarloans,
usedcarloans,loanagainstshares,consumerloans,twowheelerloans,andhome
loans.
PerformanceofHDFCBank
AwardsandAchievements:
HDFCBankbeganoperationsin1995withasimplemission:tobea"World-class
IndianBank".Werealisedthatonlyasingle-mindedfocusonproductqualityand
serviceexcelencewouldhelpusgetthere.Today,weareproudtosaythatweare
welonourwaytowardsthatgoal.
Itisextremelygratifyingthatoureffortstowardsprovidingcustomerconvenience
havebeenappreciatedbothnationalyandinternationaly.
67
2009
2008
68
Finance Asia 'BestBankandBestCashManagementBank'
Country Awards
for Achievement
2008
CNN-IBN 'IndianoftheYear(Business)'
Nasscom ITUser 'BestITAdoptionintheBankingSector'
Award2008
BusinessIndia 'BestBank2008'
ForbesAsia Fab50companiesinAsiaPacific
Asian Banker BestRetailBank2008
Excelence in
Retail Financial
Services
Asiamoney BestlocalCash ManagementBank Award voted by
Corporates
Microsoft&Indian SecurityStrategistAward2008
ExpressGroup
World Trade For outstanding contribution to international trade
CenterAward of services.
honour
Business Today- OneofIndia's"MostInnovativeCompanies"
Monitor Group
survey
FinancialExpress- BestBankAwardinthePrivateSectorcategory
Ernst & Young
Award
Global HR 'EmployerBrandoftheYear2007-2008'Award-First
Excelence Runnerup,&manymore
Awards - Asia
Pacific HRM
Congress:
2007
69
Dun&Bradstreet 'CorporateBestBank'Award
– American
Express
Corporate Best
BankAward2007
The Bombay 'BestCorporateSocialResponsibilityPractice'Award
Stock Exchange
and Nasscom
Foundation's
Business for
Social
Responsibility
Awards2007
OutlookMoney& BestBankAwardinthePrivatesectorcategory.
NDTVProfit
TheAsianBanker BestRetailBankinIndia
Excelence in
Retail Financial
ServicesAwards
AsianBanker OurManagingDirectorAdityaPuriwinstheLeadership
AchievementAwardforIndia
70
CreditRating:-
HDFCBankhasitsdepositprogrammesratedbytworatingagencies-Credit
Analysis&ResearchLimited.(CARE)andFitchRatingsIndiaPrivateLimited.The
bank'sFixedDepositprogrammehasbeenrated'CAREAAA(FD)'[TripleA]by
CARE,whichrepresentsinstrumentsconsideredtobe"ofthebestquality,carying
negligibleinvestmentrisk".
CAREhasalsoratedthebank'sCertificateofDeposit(CD)programme"PR1+"
whichrepresents"superiorcapacityforrepaymentofshortterm promissory
obligations".FitchRatingsIndiaPvt.Ltd.(100% subsidiaryofFitchInc.)has
assignedthe"tAAA(ind)"ratingtothebank'sdepositprogramme,withthe
outlookontheratingas"stable".Thisratingindicates"highestcreditquality"where
"protectionfactorsareveryhigh".
HDFCBankalsohasitslongtermunsecured,subordinated(TierI)BondsofRs.4
bilionratedbyCAREandFitchRatingsIndiaPrivateLimited.CAREhasassigned
theratingof"CAREAAA"fortheTierIBondswhileFitchRatingsIndiaPvt.Ltd.has
assignedtherating"AAA(ind)"withtheoutlookontheratingas"stable".Ineach
ofthecasesreferredtoabove,theratingsawardedwerethehighestassignedby
theratingagencyforthoseinstruments.
71
PersonalLoanPolicies
PersonalLoanFeatures&Benefits:-
1.BorowuptoRs15,00,000foranypurposedependingonyourrequirements.
2.FlexibleRepaymentoptions,rangingfrom12to60months.
3.RepaywitheasyEMIs.
4.Oneofthelowestinterestrates.
5.Hasslefreeloans-Noguarantor/security/colateralrequired.
6.Speedyloanapproval.
7.Convenienceofserviceatyourdoorstep
8.Customerprivileges
IfyouareanHDFCBanksalaryaccountholder,wehaveaspecialofferfor you
IfyouareanexistingAutoLoancustomerwithaclearrepaymentof12
monthsormorefrom anyofourapprovedfinanciersorus,youcangeta
hasslefreepersonalloan(withoutincomedocumentation).
IfyouareanexistingHDFCBankPersonalLoancustomerwithaclear
repaymentof12monthsormore,wecanTop-Upyourpersonalloan.
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EligibilityCriteria:-
MinimumageofApplicant:21years
MaximumageofApplicantatloanmaturity:60years
Minimum employment:Minimum 2yearsinemploymentandminimum 1
yearinthecurrentorganization
MinimumNetMonthlyIncome:Rs.10,000permonth(Rs.15,000inMumbai,
Delhi,Bangalore,ChennaiandHyderabad&Rs.12,000inCalcuta,Ahmedabadand
Cochin)
Documentsrequired:-
ProofofIdentity(PassportCopy/VotersIDcard/DrivingLicence)
Address Proof(Ration card Tel/Elect.Bil/Rentalagr./Passport
copy/Tradelicence/Est./SalesTaxcertificate)
BankStatements(latest3monthsbankstatement/6monthsbank
passbook)
LatestsalarysliporcurrentdatedsalarycertificatewithlatestForm16
73
Fees&ChargesforPersonalLoan
DescriptionofCharges PersonalLoan
LoanProcessingCharges Upto2%oftheloanamount
Prepayment(upto6monthsofavailing Nopre-paymentpermited
loan)
Pre-paymentcharges(after6monthsof 4%ofthePrincipalOutstanding
availingloan)
No Due Certificate / No Objection NIL
Certificate(NOC)
Duplicatenoduecertificate/NOC Rs250/-
SolvencyCertificate Notapplicable
ChargesforlatepaymentofEMI @24%p.aonamountoutstandingfrom
dateofdefault
Loancancelationcharges Rs.1000/-
ChequeBounceCharges Rs450/-perchequebounce
Legal/incidentalcharges Atactual
74
FAQs:-
1.Ifyouhaveanyqueriesthatarenotansweredhere,pleasecalusor
Writetous.
2.WhatarethebenefitsofhavingaSalaryAccountformypersonalloan?
3.HowmuchloancanIavailof?
4.HowdoIrepaymyPersonalloan?
5.WhatsecuritydoIneedtoprovidetoobtainthisloan?
6.Whataretheloantenureoptions?
7.Howlongwilittakeformetogetmyloan?
8.CanIrepaytheloanearlier?
9.HowdoIgetaPersonalLoan?
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METHODOLOGYOFTHESTUDY
ResearchMethodology
Researchasameanofgetingknowledgecanbecariedouteitherarbitrarilyorin
asystematicfashion.Itisapurposiveinvestigation.
Researchmaybeameantoknowthesmalchangeandtimeforceduponusas
individualorasasociety.Researchasprocessinvolvesdefiningtheproblem,
formulatingthehypothesis,organizingandevaluatingthedata,derivinginference
andconclusionaftercarefultesting.
DataColection
Asdataisrequiredforanyresearchactivity,itiscolected(forthoseboththe
PrimaryandSecondary)asfolows:
PrimaryData:
Ihavecolectedthisdatathroughquestionnaire.
SecondaryData:
publicationreports,websiteswhereusedasasourceofsecondarydatainorderto
dothisprojectandtocolectnecessarydata.Ihaveusedthemanualsandleaflets
oftheHDFC&S.B.Ibank.
76
Titleofthestudy:-
“ComparativeAnalysisofSBI&HDFCBankRegardingPersonalLoan”
Objectiveofstudy
Primary:-
1.Analysisandevaluationofcustomerssatisfactionwithrespecttopersonalloan
performance.
2.Todeterminethemaincharacteristicwhichcustomerslookuponwhiletaking
personalloan?
3.Todeterminetheotherbankthosearecompetingwiththesameproductrangin
personalloan.
Secondary:-
1.Servicelevelandchannelassociateapproach.
2.Tofindthelevelofbrandawareness.
3.Tofindoutthecompanymarketshare.
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Typesofresearch:-
Descriptiveresearch
Primarydatacolection
ThroughQuestionnairefiledbyrespondents.
Secondarydatacolection
Datacolectionthrough–Internet,Magazines.
Samplesize&Methodofselectingsample
Samplesize-: 200respondents
Methodofselectingsample:- Conveniencesampling,100customer
fromeachbank
Scopeofstudy
i.
Specialareatobefocusedforincreasingthesalesandforsales
promotionactivitiestobeadopted.
i. Tomakeproductmoreinnovativeandeasytounderstand
i. Forprovidingmaximum satisfactiontothecustomerbyknowingtheirneeds
andrequirementaboutproductandservices.
iv. Stepstobetakenatpresentforsurvivalandfacingthecompetitionwithother
equivalentproduct.
v. Continuesimprovementandforbetermanagement.
vi. Maintaininggoodrelationbetweenmanagerandcustomer.
78
Limitationsofthestudy
4.ThestudywaslimitedonlyJaipurcityHencefindingsmaybedifferfromotherpart ofcountry.
5.Manyformalitiesandrequirementsduringprocessoftakingpersonalloan.
5.Manytimesrespondentsweresobusythattheydidn’ttgivereply.Therewere
biasedrepliesalso.
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FACTSANDFINDINGS
1.45%customersareprefertheSBIBankwhentakingpersonalloanandonly30%
customers
preferHDFCBank.
2.Familymembersarecreatingmoreeffectondecisionsregardingpersonalloan.
3.Interestrateismainfactorconsiderbycustomerswhentakingloan.
4.Mostofthecustomerpreferstherepaymentofloaninhigherduration.
5.Mostofthecustomersconsiderthepoliciesofbankregardingpersonalloan.
6.50%customer’sgivethehigherratingtoSBIBank.
7.InHDFCBankonly30%customersgivethehigherratingtoHDFCBank
8OnlygovernmentsemployeesareprefertheSBIBank.
9.Similarlyselfemployed&businessman’sareprefertheHDFCBank.
10Lowincomeclasspeoplefacedifficultytotakingpersonalloan
80
ANALYSISANDINTERPRETATION
Samplesize100
Q.1Typeofcustomers.
SBI HDFC
a) Businessman 12 20
b) Selfemployed 20 20 Working
c) professional 28 35 Govt.service
d) employee40 25
Interpretation:-
Asperthestudythegovt.employeesaremaincustomersofSBIbank
andbusinessmanarelessminimum.Ontheothersideworkingprofessionalaremain
customersofHDFCbank.
Q.2Bankpreferenceforpersonalloan.
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a) HDFC 30
b) SBI 45
c) OTHERS 25
Interpretation:-
Maximum numberofcustomerspreferSBIbankfortaking
personalloancomparetoHDFCbankbcozoflowinterestrate,goodimage,and
publicsectorbank.25%customerspreferotherbanklikeICICI,PNB,andBankof
Broad.
Q.3Soursofcommunication(Fromwherecustomersgetthe
Informationaboutbank).
82
a) Advertisement 3
b) Friend 25
c) Familymember 35
d) Others10
Interpretation:-
Asperasmythestudythefamilymembersarethemainsourcesof
Communicationaboutbankandadvertisementisothersources.Familymembers
influencethedecisionrelatedtotakingpersonalloan.
Q.4Factorsconsiderbycustomerswhiletakingloan.
83
a) Interestrate 70
b) Scheme 20
c) Duration 8
d) Others 2
Interpretation:-
Whenanycustomersplanningfortakingpersonalloanfrom any
bankthey mainlyconsidertheinterestrateoftheparticularbankandtheygive
secondpreferencetoduration&schemes.
Q.5Loandurationpreferredbycustomers.
84
a) 2years 12
b) 3years 28
c) 4years 24
More than 5
d) years 36
Interpretation:-
Maximum customerspreferthemorethan5yearsdurationfor
personalloanbecauseoflongdurationmonthlyinstalmentcanbeaffordablebythe customers.
Q.6Considerationonpoliciesofbankregardingpersonalloanbycustomers.
85
a) YES 7
b) NO 2
Interpretation:-
Asperthemystudywhenanycustomersplanningfortaking
personalloantheyconsiderthepoliciesofbankregardingpersonalCustomerswant
toaboutthealformalitiesandcloserelatedwithloanprocess.
86
Q.7RatingofHDFCbank.
a) Good 44
b) Verygood 30
c) Average 26
d) Belowaverage 0
Interpretation:-
Accordingtomystudy75%customersareagreethatHDFCbank
isverygood&goodbecauseofgoodservices,morenumbersofscheme.
87
Q.8RatingtheSBIbank.
a) Good 50
b) Verygood 40
c) Average 10
d) Belowaverage 0
Interpretation:-
90% ofcustomersagreethatSBIbankisverygood&good.
becauseofgoodimage,publicsectorbank,lowinterestrate.CompressiontoHDFC
bankmorecustomersagreethatSBIbankisverygood.
88
Q.9Overalpreferenceonthebasisofinterestrate,imageandscheme.
a) HDFC 35
b) SBI 65
Interpretation:-
65%ofcustomersprefertheSBIbankand35%preferHDFCbank
onthebasisofinterestrate,imageandschemes.ThemainreasonisthattheSBI
bankispublicsectorbanksocustomerstrustonSBIbankmorethanHDFCbank.
89
Q.10Commentonbankformalitiesregardingtopersonalloan.
Interpretation:-
Maximumnumbersofcustomersgivethecommentthatthebankformalitiesshould
bereduce.Theyagreethatthebankformalitiesareverystrucksoitmustbeeasy.
Someofthecommentsarefolows
1.Reducetheloanformalities.
2.Bankformalitiesareveryhigh.
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SWOTANALYSIS
Strengths:-
BrandName:-
SBIBankhasearnedareputationinthemarketovertheperiodoftime(Being
theoldestbankinIndiatracinghistorybackto1806)
MarketLeader:-
SBIisrankedat380in2008FortuneGlobal500list,andranked219in2008
ForbesGlobal2000.Withanassetbaseof$126bilionanditsreach,itisa
regionalbankingbehemoth.
WideDistributionNetwork:
Excelentpenetrationinthecountrywithmorethan10000corebranchesand
morethan5100branchesofassociatebanks(subsidiaries).
DiversifiedPortfolio
SBIBankhasaltheproductsunderitsbelt,whichhelpittoextendthe
relationshipwithexistingcustomer’sBankhasumbrelaofproductstooffer
theircustomers,ifoncecustomerhasrelationshipwiththebank.Some
Products,whichSBIBankisofferingare:RetailBankingBusinessBanking
MerchantEstablishmentServices(EDCMachine)Personalloans&Carloans
InsuranceHousingLoans
GovernmentOwned:-
Governmentowns60%stakeinSBI.ThisgivesSBIanedgeoverprivatebanks
intermsofcustomersecurity.
LowTransitionCosts-SBIoffersverylowtransitioncostswhichatractssmal
91
customers.
Weaknesses:-
1.Theexistinghierarchicalmanagementstructureofthebank,although
strengthinsomerespects,isabariertochange.
2.ThoughSBIcardsarethe2ndlargestplayerinthecreditcardindustry,it
hasthehighestnonperformingassets(NPAs)intheindustry,whichstandout
tobeat16.28%(Dec2007).
3.Modernisation:SBIlagswithrespecttoprivateplayersintermsof
modernisationofitsprocesses,infrastructure,centralisation,etc.
Opportunities:-
1. MergerofassociatebankswithSBI:Mergerofaltheassociatebanks(like
SBH,SBM,etc)intoSBIwilcreateamegabankwhichstreamlinesoperations
andunlocksvalue.
2. Planningtoadd2000branchesand3000ATMsin2008-2009.Thiswil
furtherincreaseits reach.
3. Increasingtradeandbusinessrelationsandalargenumberofexpatriate
populationsoffersa greatopportunitytoexpandonforeignsoil.
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Threats:-
1. AdventofMNCbanks:LargenumbersofMNCbanksaremushroomingin
theIndianmarketduetothefriendlypoliciesadoptedbythegovernment.This
canincreasethelevelofcompetitionandproveapotentialthreatforthe
marketshareofSBIbank.
2 Consumerexpectationshaveincreasedmanyfoldsinlastfewyearsand
thebankhasnotbeenresponsiveenoughtomeetthemontime.
3 Privatebankshavestartedventuringintotheruralandsemi-urbansector,
whichusedtobethebastionoftheStateBankandotherPSUbanks
4. EmployeeStrike:Therewasanemployeestrikeintheyear2006which
disruptedSBI’sactivities.Thiscanberepeatedinthefuture.
93
SWOTANALYSISOFSBIBANK
STRENGTH WEAKNESSES
BRANDNAME LESSMODERNISATION
MARKETLEADER HIGHERNPA
FACILITIES
OPPURTUNITIES THREAT
HIGHAPPROCHOFATM EMPLOYEESTRIKE
VARIOUSLOCATION PRIVATEBANKS
MERGEDWITHASSOCITEDBANK ADVENTOFMNCBANK
94
SWOTANALYSISOFHDFCBANK
STRENGTH WEAKNESSES
SEGMENTATION TIMINGSHORT
PRODUCTFEATURES MAINTENANCECHARGESHIGH
WORKENVIRONMENT HIGHINTERESTRATE
FACILITIES
OPPURTUNITIES THREAT
MERGEDWITHCENTURIANBANK SBIBANK
VARIOUSLOCATION etc)
NAMEANDLOGOWILLBENEW
CONCLUSION
AreasinResearch:-
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InmyreportIhavetriedtoshowthebasicdifferentbetweenthePersonalLoan ofHDFC
& SBIBanks.BoththeBanksaregoodintermsofcustomer
satisfaction’shasanedgebecauseitistheleadingGovernmentregulatedbank
inIndia.HDFCisnewtothissegment(whencomparedtoSBI).SBIisprefered
becauseit’sagovernmentbank.ProcedureofloanfinancingiseasyinHDFC
Bank.Familymembers&increasingstandardoflivingplaysanimportantrolein
influencingthedecisionoftakinghomeloan.
1.SBIBankisLeadingBankinthecountry,itprovidesavarietyofproductsand
servicestodifferentsegmentsofcustomers.
2.TheBankaimstoservecustomersfrom teenagerstoseniorcitizens,hence
differentproductsdesignedtosuitspecificrequirementsoftheabove.
3.Aimstoservealclassesofthesocietyfromthesalariedmiddleclasstothehigh
incomebusinessclass.Customersarecategorizedandsegmentedaccordingtotheir
requirementsandneeds.
ForExample,the SavingRegularandPlusAccountaimstoservemiddleclass
customerssominimumbalancerequiredtobemaintainedisRS.5,000/-orRS.10000.
WhiletheSavingMaxAccountistargetedathighincomecustomers,theminimum
balancerequirementisRS.25,000.
4.SBIBankprovidespersonalloanatlowinterestratewhichgoodforcustomers.
5.TheBankpridesitselfwiththeabilitytoprovidedifferentiateproductsinthecrowed
marketofsavingaccounts.Bankoffersfreeinsurance,specialco-brandeddebitcards
whichmakesit’sproductunique.
APPENDIX
PersonalDetails:
96
Name:-_____________________________________________
Address: -
____________________________________________________________________________________
________________________________________________________
Age:-__________________ contactno:-__________________
(1)Profileofrespondent
(a)Businessman (b)Selfemployed
(c)Workingprofessional (d)GovernmentServiceEmployee
(2)Whichbankwouldyoupreferforpersonalloan?
(a)HDFCBank
(b)SBIBank
(c)Others
(3)Whatmakeyoubelievetotakethepersonalloanfromanyparticularbank?
(a)Advertisement (b)friend
(c)Familymember (d)others
(4)Whatwilyouconsiderwhiletakingloan?
(a)Interestrate (b)scheme
(c)Duration (d)others
(5)Forwhattimeintervalyouhavetakenloan?
(A)1-2years (b)2-3years
(c)3-4years (d)morethan4years
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(6).Doyoufulyconsiderthepoliciesofthebankregardingpersonalloan?whentaking
loan.
(a)Yes (b)no
(7).Ratethehdfcbankamongfolowingonthebasisofbankschemeandservices?
(a)Good (b)verygood (c)average (d)belowaverage
(8).Ratethesbibankamongfolowingonthebasisofbankschemeandservices?
(a)Good (b)verygood (c)average (d)belowaverage
(9).How wilyouseetheformalitiesofthebankwhiletakingthepersonalloan?
Comment
(10)Onthebasisofinterestrate,services,image,scheme.Whichbankyouprefer
HDFC&SBIandwhy?
BIBLIOGRAPHY
98
MAGAZINES
Businessworld
Businesstoday
NEWSPAPER
Economictimes
TimesofIndia
TheHindu
WEBSITES
www.hdfcbank.com
www.sbibank.com
www.google.com
KNOWLEDGETHROUGHT.V.:-
WatchedAd’sofBoththeBanks,theyhelpedusinKnowingaboutthebanks&raised
ourinterestinthetopic.ThisAd’swerethefirstsourceofinformationaboutthebanks.
Theyhelpedinchoosingthetopic.
TELEVISION
NDTVPROFIT
ZEEBUSINESS
TIMESNOW
IBN7
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