An Analysis of Working Capital Finance at Corporation Bank at Rajkot Branch

Management Research Project
“AN ANALYSIS OF WORKING CAPITAL FINANCE AT CORPORATION BANK AT

RAJKOT BRANCH”
By
VORA NAYAN M. & GHODASARA DHAVAL P.

MBA SEM II
Marwadi Education Foundation’s Group of Institutions, Rajkot.
AY: 2010-11
Conducted at
Corporation Bank of India
Head Branch, Rajkot
Under the guidance of

Mr. Bhargav Pandya,
Asst. Professor,
Faculty of Management,
Marwadi Education Foundation’s Group of Institutions
Rajkot
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Working Capital Finance with focus on Corporation Bank
Mr. Vora Nayan M.

Mr. Ghodasara Dhaval P.
(Student of MBA Sem - II)
Faculty of Management,
Marwadi Education
Foundation’s Group of
Institutions,
DECLARATION
I, the under signed Mr. Vora Nayan M. and Ghodasara Dhaval P., hereby
declare that the research work presented in this summer internship project is
my own contribution and has been carried out under the supervision of Mr.
Bhagav Pandya, Assistant Professor, Faculty of Management, Marwadi
Education Foundation’s Group of Institutions, Rajkot.
This is an original contribution in every respect and has not been
previously submitted to any university for any degree.
Date:
VORA NAYAN M.
Place: Rajkot GHODASARA DHAVAL P.
PREFACE
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As a part of 2nd semester MBA, students have to undergo a Management Research Project,
which is designed keeping the prerogative & preferences of practical aspects in mind. This
particular project allows a student to implement what one has learned within the four walls of
classroom. It is here that the caliber of student is tested to find her flexibility for rigorous tasks
assigned to her in future.
After taking the research work on Working Capital finance with focus on Corporation bank,
we have experienced and understood very well that without knowing and witnessing the practical
aspects of any subject the theoretical knowledge becomes useless. An attractive feature of this
project is to learn about Working capital loans.
During this period of preparing a project, we are acclimatized to the field atmosphere and also
come to know about market growth, market size, and market position on working capital loans
provided by different banks.
This project helped us tremendously to face the different challenges came into our way while
working, starting from collecting of relevant information regarding various banks, limited time
period for the bank visit is being permitted.
This report that we are submitting intends to highlight our versatility in sustaining the pulls and
pressure of day to day professional life put to perspective the fact that we are capable enough to
deliver whenever a challenge is thrown to us.
VORA NAYAN M.
GHODASARA DHAVAL P.
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ACKNOWLEDGEMENT
Good opportunities are rare &

a wise person will never let one go by.
We think this is a good opportunity for us to thank those nice and wonderful people who have
helped us a lot in our 2nd semester project work.
Our hard work never shines if we do not convey our heartfelt gratitude to those people from
whom we have got considerable support and encouragement during this project.
First of all I am thankful to our college (M.E.F.G.I.) to give us an opportunity to represent our
ability.
I especially would like to thank for their active involvement in this project work.
I would like to thank our project guides Prof. Bhavik Panchasara and Prof. Bhargav Pandya for
their motivation of support during this project work. They have provided us a new direction to
work.
I would like to thank all our friends who have directly or indirectly helped me.
Finally, on a personal note I would like to thank my family members for all their help and moral
support they provided during our project.
And, at last I only want to mention that I have searched for better ways to do the things and I
hope for the best.
VORA NAYAN M.
GHODASARA DHAVAL P.
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EXECUTIVE SUMMARY
Every Enterprise namely company/firm/individual requires money to meet the day to day
business operations, for purchasing stocks and for acquiring raw materials for processing and
conversion to finished goods. Banks provide finance to purchase inventory directly by providing
funded limits or by issuing letter of credit or Bank Guarantee. Bank also provides receivables
finance to provide liquidity to the customers.
Bank in tune with Government guidelines is actively financing export and import trade
transactions. The Bank is providing credit to exporters on simple and hassle free terms.
Economy is growing and so the firms also want to grow. The government of India boosts the
performance of the enterprises by including new industries into priority sector. SMEs are major
contributors to GDP, and an even larger contributor to exports and employment. Given this
background, banks will find SME financing an attractive business opportunity rather than a
compulsion, of lending to the priority sector. Banks jointly have to play a pivotal and proactive
role in financing the SMEs.
As per the current market scenario in the country, the five banks namely Corporation Bank,
HDFC, SBI, UTI, BOB are the major Indian banks upcoming in the country.
Henceforth,I have focused these five banks for the project study on the working capital loans.
The concerned person from the above specified banks was interviewed and with the help of
questionnaires, information is collected. The analysis is made in terms of the different factors
like the time taken to sanction the loan by different banks, charges for processing, priority
sectors and black list sectors to provide the finance by the banks, securities charged, and
eligibility criteria of different banks.
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Customers are the king of any industry. So enterprises, the customers of the banks are also
surveyed in the project. Different enterprises requirement for working capital is dependant on
their size and the industry into which they are.
Sample size of 150 is taken randomly from the population. These enterprises are randomly
chosen from the different industries. They comprise of all small capital, middle capital, and large
capital enterprises. The sample consists of firms from manufacturing, service and trading sectors.
The customers were interviewed and with the help of questionnaire, analysis is made regarding
their expectations for the services of the banks, the satisfaction level in terms of the flexibility,
documentation, interest rates charged and sanctions time. Correlation between the expected
amount and the actual sanctioned amount, and also between the amount sanctioned and
sanctioning time is done. The survey for the preference of the customers for the different banks
is also done in the project.
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INDEX
CHAPT TOPIC PURTICULARS PAGE

NO. NO. NO.
1 Introduction
1.1 Working capital Finance 7
Working capital & net working capital 9

1.2 Industry Overview 10
1.3 Company Overview 18
Annual report (Snap shots) 26
2 Research Methodology 31
2.1 Title & objectives of study 31
2.2 Rationale of the study 31
2.3 Literature Review 32
2.4 Sample Design 33
2.5 Collection of data 33
2.6 Research Method 34
2.7 Scope and Limitation of the study 34
3 Analysis and Interpretation of Data 35
3.1 Bank analysis 35
3.2 Customer analysis 44
4 Summary, Findings and Suggestions 57
4.1 Summary 57
4.2 Findings 59
4.3 Conclusion & suggestions 61
4.4 Bibliography 62
Annexure (Questionnaire) 63
Working capital Finance:

For an uninterrupted of a firm at a given capacity (to achieve a particular turnover level to
remain viable and operate much above the breakeven level to earn profits), it requires a specified
minimum level of current assets namely raw materials, stock-in-process, finished goods and
receivables apart from reasonable cash in hand and certain other current assets. Working capital
means the total amount of these circulating funds or current assets.
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In other words, the working capital comprises:
a: Amount of raw material of various kinds in store or in-transportation;
b: Amount of consumable stores and other material required for production purpose;
c: Value of stock in process;
d: Value of all finished goods including in transit;
e: Amount of receivables or sundry debtors;
f: Monthly expenses generally reflected throgh the current assets other than those at (a) to (e)
such as cash, advances allowed, pre-paid expenses etc.
The means to finance working capital are:
a: Credit available from suppliers on purchase;
b: Other current liabilities
c: Surplus of long term funds over the long term use (i.e. net working capital)
d: Short term bank borrowing.
Working Capital (As per Corporation Bank):
The working capital limits would be considered only after the project nearing completion and
after ensuring full tie-up of the term loan requirements of the borrower. These limits would be
either in the form of fixed loans or running accounts and / or bill financing facility. The finance
extended under this category would be for meeting the funds requirements for day to day
operations of the units i.e., to meet recurring expenses such as acquisition of raw material, the
various expenses connected with products, conversion of raw materials into finished products,
marketing and administrative expenses, etc..
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In tune with the Reserve Bank of India guidelines on Loan System for delivery of bank Credit
for working capital purposes to larger borrowers, the same would be extended in the form of
fixed loan (working capital Demand loan) and cash credit (running account) in the ratio of 60:40
in respect of borrowers enjoying aggregate working capital limits of Rs.10 crore and above from
the Banking system. The working capital demand loan facility shall be for a minimum fixed term
of 7 days subject to roll over at the option of the borrower concerned.
Eligible Working Capital Limits would be assessed by adopting various methods such as
Projected Turnover Method, Permissible Bank Finance Method, Cash Budget Method and Net
Owned Funds Method, depending upon the type of borrower, the aggregate working capital
facility enjoyed from the banking system, the scale of operation, nature of activity/enterprise and
the duration/ length of the production cycle, etc..
The working capital limits would require such security and personal/ third party guarantees as
applicable to general lending norms of the bank and risk perception in respect of individual
borrowal account.
Working capital and Net working capital

Working capital (or gross working capital) requirements refer to the funds required for financing
the minimum total current assets. Liquid surplus or net working capital refers to the surplus of
long term sources over long term uses as per RBI prescription (also calculated by banks as
difference between current assets and current liabilities). It is desirable, that the net working
capital should be positive which would signify liquidity and availability of adequate working
funds. If in a particular case, the net working capital is negative, the difference will be called the
working capital deficit. The working capital can also be classified as:
a: Permanent working capital which is minimum amount of investment in current assets

necessary for carrying out operations for a period.
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b: Fluctuating working capital represents additional assets required at different times during
the operating period due to cyclic factors.
c: Seasonal working capital means requirement for additional current assets due to seasonal
nature of the industry.
d: Adhoc working capital means requirement of additional funds for meeting the requirement
arising out of special order, delay in receipt of payment of receivables.
e: Working capital term loan: a long term loan given to meet the working capital margin needs
of a borrower.
f: Working capital gap= total current assets less other current liabilities. It is financed by net
working capital and bank finance for working capital(called MPBF).
The factors which determine the working capital-
The bankers quite often provide funds to the borrowers without actually understanding
the factors which determine the level of working capital needed. In the process there may either
be under-financing or over-financing also. The following factors determine the overall working
capital levels of the industrial units:
1: Policies for Production,
2: Manufacturing Process,
3: Credit Policy of the unit,
4: Pace of turnover,
5: Seasonality.
EARLY HISTORY OF BANKING:
As early as 2000 B.C., the Babylonians has developed a banking system. There is evidence to
show the temples of Babylon were used as banks. After a period of time, there was a spread of
irreligion, which soon destroyed the public sense of security in depositing money and valuable in
temples. The priests were longer acting as financial 45 agents. The Romans did minute
regulations, as to conduct private banking and to create confidence in it. Loan banks were also
common in Rome. From these the poor citizens received loans without paying interest, against
security of land for 3 or 4 years.
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During the early periods, although private individuals mostly did the banking business, many
countries established public banks either for the purpose of facilitating commerce or to serve the
government.
However, upon the revival of civilization, growing necessity forced the issued in the middle of
the 12th century and banks were established at Venice and Genoa. The Bank of Venice
established in 1157 is supposed to be the most ancient bank. Originally, it was not a bank in the
modern sense, during simply an office for the transfer of the public debt.
Again the origin of modern banking may be traced to the money dealers in Florence, who
received money on deposit, and were lenders of money in the 14th century and also in 1349, the
business of banking was carried on by drapers of Barcelona.
In India, as early as the Vedic Period, banking, in most crude from existed. The books of Manu
contain references regarding deposits, pledges, policy of loans, and rate of interest. True, the
banking in those days largely mint money lending and they did not know the complicated
mechanism of modern banking.
This is true not only in the case of India but also of other countries. Although, the business of
banking is as old as authentic history, banking institutions have since than changed in character
and content very much. They have developed from a few simple operation involving the
satisfaction of a few individual wants to the complicated mechanism of modern banking,
involving the satisfaction of capital slowly seeking employment and thus providing the very life
blood of commerce.
THE ORIGIN OF WORD ‘BANK’
The word ‘Bank’ itself derived from the word ‘bancus’ or ‘banque’ that is a French. There were
others of the opinion that the word ‘Bank’ is originally derived from the German word ‘back’
meaning joint for which was Italianised into ‘banco’.
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STATUS WISE BIFURCATION OF BANKS

Scheduled Banks.
Non-Scheduled Banks.
Scheduled Banks
In first schedule, Government of India notifies the Primary Banks, which are licensed and whose
demand and time liability are not less than 50 crores in 1987.
Government of India notifies the Primary banks, which are licensed and whose demand and time
liability are not less than 100 crores can only qualify to be included in the second schedule since
1993.
A bank becomes scheduled when it fulfills the followings:
‘A’ grade rating from RBI
Demand and Time Liability over 100 Crores
Satisfy the RBI guidelines related to CRR and SLR
As per the norms Priority Sector wise lending
Benefits of Being a Scheduled co-operative are described below:
RBI would provide Rediscounting facility at nominal rate
RBI gives remittance facility at par
The demerit of being a scheduled co-operative bank is that the bank will not get 0.5% subsidy
from RBI.
The conferment of scheduled status on the banks has certain advantages like refinance facility,
directly industrial finance from Reserve Bank of India, avail of Reserve Bank of India
Remittance facility scheme, accept deposits from local bodies, quasi-government organization,
religious, and charitable institutions, guarantees and cheques issued by Banks are accepted by
Government Departments. At the same time, it casts greater responsibility on the banks in the
maintenance of books of accounts and submission of returns.
Non-Scheduled Bank
The banks, which are not applicable as per the criteria of Scheduled Banks, are called as a Non-
scheduled Banks. These are very small banks.
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Central Bank and Monetary Authority

Reserve Bank of India
Apex Banking Institutions
IDBI1 NABARD2 EXIM BANK IIBI 3 NATIONAL

HOUSING
BANK
SIDBI
BANKING INSTITUTIONS
Commercial Regional Rural Co-Operative

Banks Banks Banks
Public Private
Sector Sector
State Bank Nationalized Indian Foreign State Co-op

Group Banks Banks
Subsidiary Companies
SBI Subsidiary Old New Local Area Central/

Banks Banks Banks Banks District Co-op
Banks
Subsidiary companies
Primary
Credit
Societies
1
Industrial Development Bank Of India
2
National Bank for Agriculture and Rural Development
3
Industrial Investment Bank of India
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Development Banks
Industrial Development Banks Land Development Banks
All India State Level

State Level Development
Banks
4
IFCI ICICI5
SFCs6 SIDCs7
Primary Land Development
Subsidiary Companies Banks
Market players:
Some Market Players in the same Industry of Banking are as follows.
Public sector bank:
Bank of Baroda,
State Bank of India,
Canara Bank,
Punjab National Bank,
Bank of india,
Punjab national bank,
Allahabad bank
Axis bank
Union bank
Oriental bank of commerce
Syndicate Bank
Private sector bank:
IDBI,
ING Vyasa Bank,
HDFC Bank,
ICICI Bank,
UTI Bank (Now Axis Bank)
4
Industrial Finance Corporation of India
5
Industrial Credit and Investment Corporation of India
6
State Financial Corporation
7
State Industrial Development Corporation.
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AN INTRODUCTION TO THE BANKING SECTOR IN INDIA
Banks are the most significant players in the Indian financial market. They are the biggest
purveyors of credit, and they also attract most of the savings from the population. Dominated by
public sector, the banking industry has so far acted as an efficient partner in the growth and the
development of the country. Driven by the socialist ideologies and the welfare state concept,
public sector banks have long been the supporters of agriculture and other priority sectors. They
act as crucial channels of the government in its efforts to ensure equitable economic
development.
The Indian banking can be broadly categorized into nationalized (government owned),
private banks and specialized banking institutions. The Reserve Bank of India acts a centralized
body monitoring any discrepancies and shortcoming in the system. Since the nationalization of
banks in 1969, the public sector banks or the nationalized banks have acquired a place of
prominence and has since then seen tremendous progress. The need to become highly customer
focused has forced the slow-moving public sector banks to adopt a fast track approach. The
unleashing of products and services through the net has galvanized players at all levels of the
banking and financial institutions market grid to look anew at their existing portfolio offering.
Conservative banking practices allowed Indian banks to be insulated partially from the Asian
currency crisis. Indian banks are now quoting al higher valuation when compared to banks in
other Asian countries (viz. Hong Kong, Singapore, Philippines etc.) that have major problems
linked to huge Non Performing Assets (NPAs) and payment defaults. Co-operative banks are
nimble footed in approach and armed with efficient branch networks focus primarily on the
‘high revenue’ niche retail segments.
The Indian banking has finally worked up to the competitive dynamics of the ‘new’
Indian market and is addressing the relevant issues to take on the multifarious challenges of
globalization. Banks that employ IT solutions are perceived to be ‘futuristic’ and proactive
players capable of meeting the multifarious requirements of the large customer’s base. Private
Banks have been fast on the uptake and are reorienting their strategies using the internet as a
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medium The Internet has emerged as the new and challenging frontier of marketing with the
conventional physical world tenets being just as applicable like in any other marketing medium.
The Indian banking has come from a long way from being a sleepy business institution
to a highly proactive and dynamic entity. This transformation has been largely brought about
by the large dose of liberalization and economic reforms that allowed banks to explore new
business opportunities rather than generating revenues from conventional streams (i.e.
borrowing and lending). The banking in India is highly fragmented with 30 banking units
contributing to almost 50% of deposits and 60% of advances. Indian nationalized banks (banks
owned by the government) continue to be the major lenders in the economy due to their sheer
size and penetrative networks which assures them high deposit mobilization. The Indian
banking can be broadly categorized into nationalized, private banks and specialized banking
institutions.
The Reserve Bank of India acts as a centralized body monitoring any discrepancies and
shortcoming in the system. It is the foremost monitoring body in the Indian financial sector.
The nationalized banks (i.e. government-owned banks) continue to dominate the Indian
banking arena. Industry estimates indicate that out of 274 commercial banks operating in
India, 223 banks are in the public sector and 51 are in the private sector. The private sector
bank grid also includes 24 foreign banks that have started their operations here.
The liberalize policy of Government of India permitted entry to private sector in the
banking, the industry has witnessed the entry of nine new generation private banks. The major
differentiating parameter that distinguishes these banks from all the other banks in the
Indian banking is the level of service that is offered to the customer. Their focus has always
centered around the customer – understanding his needs, preempting him and consequently
delighting him with various configurations of benefits and a wide portfolio of products and
services. These banks have generally been established by promoters of repute or by ‘high
value’ domestic financial institutions.
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The popularity of these banks can be gauged by the fact that in a short span of time,
these banks have gained considerable customer confidence and consequently have shown
impressive growth rates. Today, the private banks corner almost four per cent share of the total
share of deposits. Most of the banks in this category are concentrated in the high-growth urban
areas in metros (that account for approximately 70% of the total banking business). With
efficiency being the major focus, these banks have leveraged on their strengths and
competencies viz. Management, operational efficiency and flexibility, superior product
positioning and higher employee productivity skills.
The private banks with their focused business and service portfolio have a reputation of
being niche players in the industry. A strategy that has allowed these banks to concentrate on
few reliable high net worth companies and individuals rather than cater to the mass market.
These well-chalked out integrates strategy plans have allowed most of these banks to deliver
superlative levels of personalized services. With the Reserve Bank of India allowing these
banks to operate 70% of their businesses in urban areas, this statutory requirement has
translated into lower deposit mobilization costs and higher margins relative to public sector
banks.
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THE JOURNEY OF CORPORATION BANK
Every institution has its start in modest initiatives but what makes it great is the passion of
the people behind it. Carrying the legacy forward with an undaunted commitment to its vision,
the journey of Corporation Bank truly epitomizes this.
Started about 104 years ago in 1906, with an initial capital of just Rs.5000, Corporation
Bank has recorded Rs. 1,55,936 Crore mark in business and even far more, with over 3500
service outlets across the nation, served by committed and dedicated 12,000 plus Corp bankers.
Proof of which is seen in its enviable track record in financial performance. We have many
reasons to cheer, predominant of them is, being able to participate in nation building by
empowering the rural and urban population alike. Today, we are proud that we are significant
contributors to the growth of the country's economy.
Early Movers
Nationalized in 1980, Corporation Bank was the forerunner when it came to evolving and
adapting to the financial sector reforms. In 1997, it became the Second Public Sector Bank in the
country to enter capital market, the IPO of which was over- subscribed by 13 times. the Bank has
many " firsts " to its credit - Cash Management Services, Gold Banking, m-Commerce, " Online
" approvals for Educational loans, 100% CBS Compliance and more recently, its poineering
efforts to take the technology to the rural masses in remotest villages through low-cost
branchless banking - Business Corresponent model. All of which symbolize Bank's unswerved
commitment to its customers to provide convenience banking.
At Corporation Bank, what motivates us is the passion to excel in banking by maintaining

highest standards of service to our customers, backed by innovative products and services which
makes us one of the leading Public Sector Banks in the country, catering to a wide range of
customers - from individuals to corporate clients.
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LOGO OF THE CORPORATION BANK
Corporation Bank logos Corporation (Udipi) Ltd. to Corporation Bank Ltd. This the logo of
Corporation bank in its present form was incorporated in 1972 when the name of the Bank was
changed from Canara Banking
" Sarve Janah Sukhino Bhavanthu " in Sanskrit, which operations. The
Bank's logo has various components, namely Kamadhenu (denoting wish-fulfillment),
Kalpatharu (eternity), Balance (justice for all), Wheel means " Prosperity for All " is well-
professed by the Bank in its day-to-day (industrial progress) and Wheat Grains (agricultural
prosperity) which stand for universal prosperity and as a wish-fulfilling credo.
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History
The Foundation:
Corporation Bank came into being as Canara Banking Corporation (Udipi) Limited, on 12th
March, 1906, in the temple town of Udupi, by the pioneering efforts of a group of visionaries.
The Bank started functioning with just Rs.5000/- as its capital and at the end of the first day, the
resources stood at 38 Rupees-13 Annas-2 Pies.
The Founder President Khan Bahadur Haji Abdullah Haji Kasim Saheb Bahadur, committed to
fulfill the long felt banking needs of the people and also to inculcate the habit of savings,
provided the much-needed impetus to founding a financial institution that would bring about
prosperity to the society.
The content of the first Appeal to the public dated 19th February, 1906 speaks volume about the
lofty ideals and ethos behind the foundation. The Founder President Haji Abdullah declared that
“The Primary object in forming ‘Corporation’ is not only to cultivate habits of thrift amongst all
classes of people, without distinction of caste or creed, but also habits of co-operation amongst
all classes”. “This is ‘Swadeshism’ pure and simple and every lover of the country is expected to
come forward and co-operate in achieving this end in view”
The days that followed:
The initial growth was consciously cautious and need based. The first branch of the Bank was
opened at Kundapur in 1923, followed by the second in Mangalore in 1926. The Bank stepped
into the then Coorg State in 1934 by opening its seventh branch at Madikeri. In 1937 the Bank
was included in the second schedule of Reserve Bank of India Act, 1934.
Prosperity to All:
In 1939, the Bank’s name changed from Canara Banking Corporation (Udipi) Ltd., to “Canara
Banking Corporation Ltd.,” and strongly put forth its vision with the motto-“Sarve Janah
Sukhino Bhavantu” which means “Prosperity to All”
The second change in the name of the Bank occurred in 1972, from ‘Canara Banking
Corporation Ltd.’ to ‘Corporation Bank Limited.’ and finally ‘Corporation Bank’ following its
nationalization on 15th April, 1980.
Shouldering National objectives:
The Bank took on the priorities of nationalization in full stride and emerged successful in
fulfilling the national objectives, while sustaining its performance oriented culture and profit
augmenting record. Amidst all this, the Bank crossed Rs.1000 crore-deposit mark in the year
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1985 and launched into the 1990s with focus on high quality growth by embracing newer
technology.
The end of first phase of Banking sector reforms in India had seen the Bank emerging as the
most innovative and dynamic bank in the public sector, outshining other banks in terms of asset
quality, capital adequacy, operational efficiency, well diversified income base, profitability,
productivity, and strong balance sheet.
The tremendous amount of confidence and loyalty reposed by the public in general and
customers in particular, manifested it self in the overwhelming response to the IPO of the Bank
in the year 1997.
A Big Leap to the Big League:
As on 31st March, 2010, the Total Business of the Bank crossed Rs.1,55,936 crore while the Net
Profit rose to Rs.1170.25 crore. The Total Deposit stood at Rs.92,733.67 crore and the Total
Advances were at Rs.63,202.56 crore. The Net worth rose to Rs.5,775 crore and Net NPA
declined to 0.31%.
Growing Bigger. Getting Closer.
The Bank has Representative Offices at Dubai and at Hong Kong. Presently, the Bank has a
network of 1155 fully automated CBS branches, 1145 ATMs and 1200 Branchless Banking
Units across the country. The Bank has also drawn up plans to open 700 new branches in the
next five years.
The Bank has extended Branchless Banking units to 1200 villages and has issued Smart Cards to
all account holders in these villages for enabling them to operate their accounts at their doorsteps
through the Business Correspondents appointed by the Bank.
From 38 Rupees-13 Annas-2 Pies to Rs.1,55,936 crore and from a Networth of Rs.5,000 to
Rs.5,775 Crore, the evolution of the Bank from a Nidhi to graduate as a Premier Public Sector
Bank and from the early days of Swadeshism to post-Liberalisation days, weathering two world
wars, economic depressions, imbibing the latest in technology, responding to financial reforms
and the unique record of uninterrupted posting of profits right from its inception in 1906, has
been a corporate success stor
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Chairman & Managing Directors Profile:
Shri J. M. Garg, Chairman & Managing Director of the Bank
Shri J.M. Garg, a Post Graduate in Physics & Certified Associate of

Indian Institute of Bankers, started his career as Probationary Officer
in Indian Bank in 1973. He has over 35 years of banking experience
with expertise in Industrial Credit, Corporate Finance, Foreign
Exchange, Product Development, Marketing and HR.
A versatile banker Shri Garg has served all over India and abroad. He
has served as Branch Manager for 14 years and as Regional & Zonal
Manager for another 14 years at various centers across the country. As
Regional Manager, he had worked in Delhi & Ahmedabad, as Chief
Manager in Chandigarh and later as Assistant General Manager & Regional Head of
Chandigarh covering the states of Punjab, Haryana, Jammu & Kashmir, Himachal Pradesh
& the Union Territory of Chandigrah. He served as a Zonal Manager of Kolkata and later as
Deputy General Manager – In-charge of Recovery & Organization & Methods Division of
Head Office, Chennai & Circle Head, Chennai – South. As General Manager, he was in-
charge of Chennai Circle and later Delhi Circle of Indian Bank. Before joining Corporation
Bank as CMD, Shri Garg was the Executive Director of Punjab National Bank.
Shri Garg has worked in Singapore Branch of Indian Bank for four years as Manager Credit
& Administration. He has travelled extensively in Far East during his tenure at Singapore.
He was on Board of several companies as Nominee Director. Presently he is a Member of
Negotiating Committee for Wage Revision constituted by IBA.
Shri J M Garg assumed the office of the Chairman & Managing Director of Corporation
Bank on 6th November, 2008
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Mission and vision of corporation bank

Corporate vision:
“to emerge as the most preferred bank with global standards in financials, efficiency, technology,
products & services.”
Corporate mission:
-To become a provider of world class financial services.
-To meet customer expectations through innovation & technological initiatives.
-To emerge as a role model with distinct culture identity, ethical values & good corporate
governance.
-To enhance shareholders’ wealth by sustained, profitable & financially sound growth with
proudent risk management systems.
-To fulfill national and social obligation as a responsible corporate citizen.
-To create an environment, intellectually satisfying & professionally rewarding to the employees.
Achievement of corporation bank:
AWARDS WON
 National Award for Assistance to Exporters from the President of India(1976-77)
Gem & Jewellery Export Promotion Council Award successively for 5 years from 1981 to 1985
Shiromani Award 1992 for Banking from Union Minister for Commerce
Best Bank Award for Excellence in Banking Technology from Institute for
Development and Research in Banking Technology (IDRBT), Hyderabad (2001)
Best Bank Award for Innovative Usage and Application on INFINET

(Indian Financial Network) from Institute for Development and Research in
Banking Technology (IDRBT), Hyderabad (2002)
24
Best Bank Award for Delivery Channels from Institute for Development and
Research in Banking Technology (IDRBT), Hyderabad (2003)
Runner-up Awards in the “Best Online and Multi-channel Banking Team”

and “Outstanding achiever of the year-corporate” categories in recognition
of outstanding achievement in Banking Technology for 2004, instituted under t
he aegis of Indian Banks Association and Trade Fairs & Conferences International.
MAJOR RECOGNITIONS
One of the Best 200 companies world over outside the US having a turnover under
a billion US$ - Forbes Global, Hongkong, issue dated 27th October, 2003
India’s Best Public Sector Bank - Business Today - KPMG Survey dated 7th December, 2003
India’s Strongest and Asia’s Second Strongest - The Asian Banker, Singapore
dated 15th December, 2003
India’s Best Public Sector Bank - Outlook Money , 15th March, 2004
One among the Best 200/100 companies in Asia/Pacific and Europe having
turnover under a billion US $ -Forbes Global, Hongkong dated 1st November, 2004
One among India’s Best Public Sector Banks - Business Today, 26th February, 2006
India's Best Bank Award - FE, 2007
Best P.S. Bank - Business Today, 2007
SKOCH Challenger Award, 2008 - For Customer Relationship Management
IDRBT Best Bank Award of Banking Technology Award, 2008 - For Use
of Technology for Financial Inclusion
SCOPE Meritorious Award, 2008 - For Best Managed Bank
Banking Technology Awards, 2008 - Runner Up Award - For Best On Line

and Multi Channel Banking Team
25
SWOT Analysis of Corporation Bank
Strengths
Brand name.
High market share.
Quick service & response.
Customer oriented staff.
Weakness
Aggressive marketing.
Hidden charges.
Less market penetration in rural and industrial areas.
Lack of transparency
Opportunities
To get expanded in the rural and the industrial area.
Opportunities to attract the newly developed enterprises.
Threats
26
The growth of other financial institutions.
Competition from other major players in the industry. & Entries of international banks.
Annual Report
# Total Business Crosses Rs. 1, 50, 000 crore (2009-10)
# Over 1200 Branchless Banking Units.
# Over 1155 Branches.
# Over 1079 ATMs.
# Best Mid-Size Bank Award ’10.
Performance Highlights:
180000
160000
140000
120000
100000
80000
60000
40000
20000
0
06-March 07-March 08-March 09-March 10-March
Total Business: Total business of the Bank as on 31.03.2010 stood at Rs.155936

crore.
27
Profitability:
Net profit: N.P. of the bank for the F.y. ended March ’10 increased by Rs.277.48 crore
(31.08%) on y-o-y basis from Rs.892.77 crore in March ’09 to Rs.1170.25 crore.
Operating Profit & Net Profit:

2500
2000
1500
Operating Proift
Net Profit
1000 Series 3
500
0
06-March 07-March 08-March 09-March 10-March
Operating Profit: Operating profit of the Bank for the F.Y. ended March ’10 increased by
RS.385.11 crore(21.99%) on y-o-y basis from Rs.1751.62 crore in march ’09 to Rs.2136.73
crore.
28
Branch Expansion:
Branch Network-statewise
Andhra
2% 1% 4% Delhi
3% 11%
Gujarat
5% Goa
6% Haryana
Karnataka
6% Kerala
12% Punjab
4% Tamilnadu
Uttar Pradesh
3% 4% W.B.
M.P.
7% Rajasthan
Others
31%
Deposits:
The total deposits of the bank have grown by Rs.18,750 crore from Rs.73,984 crore as on
31 March, 2009 to Rs.92,734 crore as on 31st March, 2010, registering a growth rate of 25.34%.
st
29
Deposits
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
08-March 09-March 10-March
Advances:
Advances
70000
60000
50000
40000 Advances
30000
20000
10000
0
08-March 09-March 10-March
Income Analysis:
30
2008-09 2009-10 Change in%

Interest income 6,067.35 7,294.60 20.23
Interest Expenditure 4,376.37 5,084.35 16.17
Net Interest Income 1,690.98 2,210.25 30.71
Fees, Commission & 1,107.22 1,186.43 7.15
other Revenue
Operating Income 2,798.20 3,396.68 21.38
Operating Expenses 1,046.98 1,259.95 20.39
Operating Profits 1,751.61 2,136.73 21.98
Provisions & 365.37 474.43 29.85
Contingencies(Excl.T
ax)
Profit Before Tax 1,386.25 1,662.30 19.91
Provision For Tax 493.48 492.05 (-)0.29
Net Profit 892.77 1,170.25 31.08
Net Profit and Dividend:
The Board of Directors has recommended a dividend of 165% for the financial year 2009-10
which works out to Rs. 16.50 per fully paid up share of Rs.10/- each.
Year Net Profit [Rs. In crore] Growth%

2007-08 734.99 37.09
2008-09 892.77 21.47
2009-10 1,170.25 31.08
Stock Market Data:
The monthly high & low quotations and the volume of shares traded on National Stock
Exchange (NSE) and the Bombay Stock Exchange- Mumbai (BSE) during the F.Y. 2009-10 are
as follows:
Per Share data:
2005-06 2006-07 2007-08 2008-09 2009-10

Face Value(Rs.) 10 10 10 10 10
Mkt quotation as on 381.70 289.25 283.05 179.85 481.00
31st March
E.P.S.of Rs.10 each 30.99 37.38 51.24 62.24 81.58
Dividend per share 7.00 9.00 10.50 12.50 16.50
Book Value 235.28 262.51 294.79 341.36 402.60
Dividend Payout(%) 22.59 24.08 20.49 20.07 20.22
31
RESEARCH METHODOLOGY
Title of the study: “An analysis of working capital finance at corporation

bank at Rajkot branch”
Objectives of the study:
 To know the criteria of providing trade working capital finance to all the sector by
Corporation Bank and different banks.
 To know the priority sector for lending that are focused by banks.
 To know the process timings depending upon the amount of loan provided by banks.
 To know the most important parameter for a customer to choose a particular bank and its
services.
 To know the most preferred bank in terms of services and awareness by customers.
Rationale of the study:
Working capital finance constitutes a major portion of bank’s total finances. Recovery of
these finances is comparatively easy and hence it is an attractive means in the hands of bankers
to increase profitability. In this backdrop, an attempt was made to analyse working capital
finance facilities extended by Corporation bank which helped in getting first hand information
regarding working capital finance facilities extended by Corporation bank and its impact on
profitability of the bank.
32
Literature Review:
Nazir, Mian Sajid (Proceedings of ASBBS Volume 15 Number 1)
ON THE FACTOR DETERMINING WORKING CAPITAL

REQUIREMENTS
Summary:
The corporate finance literature has traditionally focused on the study of long-term financial
decisions. Researchers have particularly examined investments, capital structure, dividends or
company valuation decisions, among other topics. However, short-term assets and liabilities are
important components of total assets and needs to be carefully analyzed. Management of these
short-term assets and liabilities warrants a careful investigation since the working capital
management plays an important role for the firm’s profitability and risk as well as its value
(Smith 1980). The optimal level of working capital is determined to a large extent by the
methods adopted for the management of current assets and liabilities. It requires continuous
management to maintain proper level in various components of working capital i.e. cash
receivables, inventory and payables etc. Continuing with earlier studies of Afza and Nazir
(2007a, b), the present study looks into the various factors which determine the requirements of
working capital management in firms. We have used 204 manufacturing firms from 16 industrial
groups listed at Karachi Stock Exchange (KSE) for a period of 1998-2006. The working capital
requirement has been used as the dependant variable whereas various financial and economical
factors have been used as the determinants of working capital management like operating cycle
of firm, level of economic activity, leverage, growth of firm, operating cash flows, firm size,
industry, return on assets and tobin’s q. Regression analysis has been done on the panel data for
204 non-financial firms over a span of nine years. Finally, the study suggests some policy
implications for the managers and investors of Pakistani markets.
33
Sample Design:
Target sectors: The target sectors are randomly chosen from different industries.
Fabrics and textiles, Agro marine, Dehydrated Food products, Chemicals and dyes, Apparels,
manufacturers of plastic bottles, storage containers, wires, electrical contractors etc. are all
included in the targeted sectors.
Sample size: 150 customers.
Sampling Method:
The sample size of 5 banks is chosen as per the current market scenario, the popular banks in the
banking industry.
The samples for the customers are chosen randomly according to the convenient sampling.
Data Collection:
Banks:
The primary data has been collected by visiting the five banks like Corporation Bank, HDFC,
BOB, SBI & UTI. The head of the trade working capital finance or corporate lending department
were interviewed and the questionnaire was filled up.
The secondary data for the products and services of the 5 specified bank is taken from their
websites. The data regarding the industry scenario is taken from the different websites like
www.rbi.org and others.
34
Customers:
The primary data for the customers has been collected by filling up the questionnaires in areas
like GIDC Gondal Road, Shapar-Veraval and GIDC Metoda, Aji-GIDC.
The secondary data has been collected from the newspapers like ET & Business Standard and
magazines like India Today and Outlook.
Assumptions:
The information given by the concerned authority in different banks is assumed to be unbiased
and fully correct.
It is assumed that the customers have fully understood the questions asked and thereby have
given correct information.
The information given by the customers is assumed to be full information and all unbiased.
Research method:
Research method adopted for the study was exploratory. Data were collected through
administering structured questionnaire. Data were analyzed through charts and and percentage
method.
Scope of the study:

Scope of the study is limited to the one bank and that is corporation bank and in that particularly
it used the credit data. Bank’s reputation was not considered while analyzing Working Capital
credit offered by bank.
Limitation of the study:

 Time period was not sufficient to carry out in-depth study.
 Personal bias on the part of researcher and respondents was a liming factor.
 The study was restricted to few areas which would not have allowed researcher to get in-
depth insight of the topic under consideration.
35
Analysis and Interpretation of Data: BANKS ANALYSIS:

Question 1: Analysis of the products related to the working capital loans.
NAME OF BANKS STRUCTURED UNSTRUCTURED

PRODUCTS. (%) PRODUCTS. (%)
CORP. BANK 90 10
HDFC 5 95
SBI 90 10
UTI 60 40
BOB 10 90
120
100
80
60 UNSTRUCTURED PRODUCTS. (%)

STRUCTURED PRODUCTS. (%)
40
20
0
Corp. Bank HDFC SBI UTI BOB
From the chart we can make a conclusion that the banks offer structured products and are also
flexible to cater different customer’s needs and hence also offers unstructured products. But the
degree, to which these differences are, depends on the policies of the respective banks.
36
As per the chart, we can make out that Corp. bank SBI is giving more of structured loans while
HDFC is more into unstructured products depending on the needs of the customers.
The percentage on the basis of which this bifurcation is shown is concluded from the interviews
taken and the answers to the questionnaires filled by the concerned person in the banks.
Question 2: Analysis of the amount range of working capital loans given by the banks.
NAME OF MINIMUM AMOUNT MAXIMUM

BANKS (Rs.) AMOUNT (Rs.)
CORP. BANK 1.5 LACS 50 CRORES
HDFC 1 LACS 10 CRORES
SBI 5000 10 CRORES
UTI 5000 3 CRORES
BOB 1000 15 CRORES
Question 3: Analysis of the most preferred mode of security.
NAME OF BANKS PREFERRED MODE OF SECURITY

CORP. BANK Commercial, Collateral
HDFC Collateral security
SBI Hypothecation
UTI Hypothecation, Pledge
BOB Collateral security
37
Question 4: Analysis of the type of securities accepted by the following banks.
NAMES OF COMMERCIAL RESIDENTIAL PLANT & OTHERS

BANK MACHINERY
CORP. BANK Yes Yes Yes LIC Policies,

FDs
HDFC Yes Yes No __
SBI Yes Yes Yes NSC & Bonds
UTI No Yes No __
BOB Yes Yes Yes FD, Bonds,
NSCs, Shares
Question 5: Analysis of the sectors focused for lending working capital loans.
NAME OF BANKS FOCUSED SECTORS

CORP. BANK Automobile, Engineering & Mfg.
HDFC Agriculture and SSI
SBI Exports, Agriculture and SSI
UTI SSI
BOB Agriculture and SSI
Question 6: Analysis of the black list sectors for lending.
There are also few sectors that are the black list sectors for the banks.
Stock broking and the bullion market and some pollution creator sectors are the negative sectors
for the banks where they do not prefer to lend.
Question 7: Analysis of the % of security asked from the customers by the banks.
NAME OF BANKS RANGE

CORP. BANK 50% TO 100%
HDFC 101% TO 150%
SBI 81% TO 100%
UTI 51% TO 80%
38
BOB 101% TO 150%
Question 8: Analysis of what is more focused by the banks.
NAME OF BANKS FOCUSED SECTOR

CORP. BANK Mid Cap (Housing,vehicle,Mfg&Agro)
HDFC Mid Cap, Small Cap
SBI Mid Cap
UTI Small Cap, Mid Cap
BOB Large Cap
Question 9: Ranks given by different banks for the specified parameters: -
NAME PAT Turnover Liquidity Years of Credibility Amount/Ty Amount

OF existence pe of of I.T.
BANKS security return
CORP. 1 2 5 6 4 3 7
BANK
HDFC 6 5 4 1 2 3 7
SBI 7 4 3 2 1 5 6
BOB 4 1 2 5 3 6 7
UTI 4 3 2 7 1 5 6
39
8
7
6
5
4
3
2
1
0
CORP. BANK HDFC SBI BOB UTI
Question 10: Analysis of number of years of balance sheet preferred.
From the answers of the questionnaires filled by the concerned person of the banks, it has been
concluded that all banks ask for 3 years balance sheet from the customers for the lending
process.
Question 11: Analysis of the processing fee charged by the banks.
concluded that the processing fee is almost similar in all banks. It is up to 0.25 to 0.50%.
Question 12: Analysis of the time of charging the processing fee.
concluded that the processing fee is almost charged on yearly basis.
40
Question 13: Analysis of the mortgage fee charged.
NAME OF BANKS MORTGAGE FEE CHARGED

CORP. BANK 0.25% (As per stamp Act)
HDFC 1%
SBI Always Rs10000.
UTI 1%
BOB 1.5%
NOTE: As per the policy of SBI bank, it charges 10000 rupees as a mortgage fee whether the
loan is of 25 lacs or 10 crores.
Question 14: Analysis of the process time taken to sanction the loan.
NAME OF UPTO UPTO 1 UPTO 25 UPTO I MORE THAN

BANKS 5000/- LAKH LAKH CRORE 1 CRORE
CORP. N.A. 0 to 15 days 15 to 30 30 to 45 45 to 60 days

BANK days days
HDFC N.A. N.A. 0 to 15 days 16 to 30 31 to 45 days

days
SBI 0 to 15 days 0 to 15 days 0 to 15 days 0 to 15 days 16 to 30 days

BOB 0 to 15 days 16 to 30 16 to 30 31 to 45 More than 45
days days days days
41
CORP. BANK
70
60
50
40
30
CORP. BANK
20
10
0
HDFC
50
45
40
35
30
HDFC
25
20
15
10
5
0
UPTO 5000/- UPTO 1 LAKH UPTO 25 LAKH UPTO I CRORE MORE THAN 1 CRORE
42
Question 15: Analysis of the installment duration of the repayment of the loans.
On the basis of the questionnaires filled up by the concerned person of the banks, it has been
concluded that Corp. Bank (W.C. 1Yr), HDFC, SBI & UTI takes the repayment on monthly
basis.
On the other hand, BOB takes repayment on the monthly basis for the service sector and on
quarterly basis for the businessmen.
As per the interview taken of the concerned person it has been analyzed that there are different
policies for the prepayment and late payment of the installments.
Question 16: Analysis of the average interest rates charged by the banks.
NAME OF BANKS AVERAGE RATE OF INTEREST

CHARGED (%)
CORP. BANK 11
HDFC 11
SBI 10.5
UTI 11
BOB 11
INTEREST RATES
12.5
12
11.5
INTEREST RATES
11
10.5
10
9.5
CORP. BANK HDFC SBI UTI BOB
43
Question 17: Analysis of the charges for the LC opening.
CORP. BANK- 0.25 to 0.50
HDFC- There is standard norms for the LC opening of the bank.
SBI- The charges for the LC opening is 0.40%
UTI- Nil
BOB- The charges for LC opening are dependent on the number of days.
CUSTOMER ANALYSIS:
44
Question 1: The customer questionnaire.
It is filled by various customers involved in the business such as chemicals, dyes, casting,
manufacturing pumps, electrical stampings, dehydrated vegetables, wires, rubber chemicals,
scrap traders, electrical contractors, phenyl, bleach, powder, plastic bottles, etc.
Question 2: Analysis of the customer’s preference for current account in different banks.
Name of the bank. Number of customers having current

account in it.
CORP. BANK 30
NICO 10
Citibank 10
Bank of Baroda 20
HDFC 15
Punjab National Bank 5
Dena bank 5
Union Bank 10
State Bank of Saurashtra 15
State Bank of India 10
Canara Bank 5
Total 150
45
No. of customers having current A/c.

4%
CORP. BANK
11% NICO
22%
Citibank
Bank of Baroda
11% HDFC
P.N.B.
Dena bank
7%
Union Bank
7% S.B.S
S.B.I.
7%
4% Canara Bank
4%
11%
11%
46
The above chart shows the popularity of the banks among customers to have a current account of
the firm. This choice of the customers is dependant on the many parameters like for e.g.
relationship, easy access, and number of branches, better services and others.
Question 3: Analysis of the customers prefer the same bank (bank in which they have current
account) for other investment dealings like FDs, employees salary a/c, savings a/c, EPF, etc.
No. of customer prefer the same Bank No. of customer prefer the another Bank
130 20
No. of Customers
140
120
100
80 No. of Customers
60
40
20
0
Prefer same Bank Prefer another Bank
Question 4: How a customer’s needs vary?
Ans. The customer’s needs for the working capital amount vary from thousands to crores
depending upon the size of the company.
47
Question 5: What is the average time period taken for payment to suppliers?
Ans. The average time period taken for the payments to the suppliers is ranging from 30 to 45
days. There are also customers who buy from the supplier on cash basis.
Question 6: What is the average time period of receipt from customer?
Ans. The average time period for the receipt of the payment from the customers is ranging from
30 to 60 days. There are very few customers who sell on cash basis.
Question 7: Analysis of the expectations of the customers for the given parameters.
The bar chart shows the expectations according to the priorities of the need of the customers for
the following four parameters.
Rank 1 is the highly preferred service and
Rank 4 is the least preferred service. The analysis is done on the four parameters – interest rate,
quick sanction, flexibility, and easy documentation.
Interest Rate No of customers

Rank 1 85
Rank 2 35
Rank 3 15
Rank 4 15
Total 150
48
Interest Rate
90
80
70
60
50 Interest Rate
40
30
20
10
0
Rank 1 Rank 2 Rank 3 Rank 4
Quick Sanction No of customers

Rank 1 15
Rank 2 45
Rank 3 60
Rank 4 30
Total 150
49
Quick Sanction
70
60
50
40 Quick Sanction
30
20
10
0
Easy documentation No of customers

Rank 1 25
Rank 2 60
Rank 3 35
Rank 4 30
Total 150
Easy documentation
70
60
50
40 Easy documentation
30
20
10
0
50
Flexibility No of customers
Rank 1 15
Rank 2 15
Rank 3 55
Rank 4 65
Total 150
Flexibility
70
60
50
40 Flexibility
30
20
10
0
Question 8: Analysis of the number of customers requiring working capital loan from the banks.
It includes short-term loan, CC, OD, pre shipment credit, post shipment credit, LC and others.
The following table shows the number of customers who have taken loan facility from the banks.
Loan Taken Loan not taken
Number of customers 90 60
51
No. of customers
100
90
80
70
60
No. of customers
50
40
30
20
10
0
Loan taken Loan not taken
The customers not taking loans have other sources like Profits from the business, partners
capital, family or friends and from external domestic market at lowest rate of interest
Question 9: Analysis of the preferred bank for taking fund based services.
Name of banks Number of customers
Corp. Bank 18
Canara Bank 7
SBS 11
52
Gujarat Industrial Cooperative Bank 9
Dena Bank 6
Union Bank 7
PNB 8
SBI 10
SIDBI 8
Central Bank 6
Total number of customers who have 90

taken loan
53
Prefered Banks
7%
9% 20%
Corp. Bank Canara Bank

SBS Gujarat Industrial Cooperative
11% Bank
8% Dena Bank Union Bank
PNB SBI
SIDBI Central Bank
8%
12%
9%
7% 10%
Question 10: Analysis of the reason for choosing the bank
The following pie chart shows the reason for choosing the above-specified bank for a loan.
Below mentioned are the criteria’s on the basis of which a customer chooses his respective bank
for trade finance facility.
54
Criteria for selecting the bank No of customers

Interest Rates 20
Quick Sanction 15
Flexibility 11
Easy Documentation 14
Relationship 21
Various Products 9
Total customers who have taken loan 90
Criteria for selecting the bank

10%
22%
Interest Rates
Quick Sanction
23% Flexibility
Easy Documentation
Relationship
Various Products
17%
16%
12%
The above table shows the reason that the customers are taken loan. The amount of the loan
varies from customer to customer and from bank to bank depending upon the different factors.
Question 11: Analysis of Average Interest Rate for Different Banks.
55
NAME OF AVERAGE
BANK INTEREST RATE
(%)
CORP. BANK 11
HDFC 12
SBI 10.5
BOB 11
UTI 11
AVERAGE INTEREST RATE (%)

12.5
12
11.5
AVERAGE INTEREST RATE (%)

11
10.5
10
9.5
CORP. BANK HDFC SBI BOB UTI
Question 12: Analysis of the satisfaction level of the customers from the banks services.
56
The following table shows the number of customers showing their satisfaction level for the four
parameters – interest rates, quick sanction, flexibility, and easy documentation.
EXCELLENT GOOD AVERAGE POOR TOTAL
(1) (2) (3) (4)

INTEREST 0 30 105 15 150
SANCTION 15 45 75 15 150
FLEXIBILITY 45 53 45 7 150
DOCUMENTS 22 45 68 15 150
120
100
80
EXCELLENT
60 GOOD
AVERAGE
POOR
40
20
0
INTEREST SANCTION FLEXIBILITY DOCUMENTS
From the above chart it is concluded that the satisfaction level is average for all the parameters
i.e. interest rate, quick sanction, flexibility and easy documentation. According to the customers
they find the interest rate to be very high charged by the banks
Question 13: Analysis of the preference given to the following banks by the customers on the
basis of awareness of the market.
57
The following table shows the preference given to the following banks by the customers.
Name Of The Bank Number Of Customers

CORP. BANK 56
HDFC 30
SBI 20
ICICI 24
BOB 20
Total 150
Number Of Customers
13%
37%
16%
CORP. BANK
HDFC
SBI
ICICI
BOB
13% 20%
SUMMARY, FINDINGS AND SUGGESTIONS:
SUMMARY
58
Every Enterprise namely company/firm/individual requires money to meet the day to day
business operations, for purchasing stocks and for acquiring raw materials for processing and
conversion to finished goods. Banks provide finance to purchase inventory directly by providing
funded limits or by issuing letter of credit or Bank Guarantee. Bank also provides receivables
finance to provide liquidity to the customers.
Bank in tune with Government guidelines is actively financing export and import trade
transactions. The Bank is providing credit to exporters on simple and hassle free terms.
Economy is growing and so the firms also want to grow. The government of India boosts the
performance of the enterprises by including new industries into priority sector. SMEs are major
contributors to GDP, and an even larger contributor to exports and employment. Given this
background, banks will find SME financing an attractive business opportunity rather than a
compulsion, of lending to the priority sector. Banks jointly have to play a pivotal and proactive
role in financing the SMEs.
As per the current market scenario in the country, the five banks namely Corporation Bank,
HDFC, SBI, UTI, BOB are the major Indian banks upcoming in the country.
Henceforth, I have focused these five banks for the project study on the working capital loans.
The concerned person from the above specified banks was interviewed and with the help of
questionnaires, information is collected. The analysis is made in terms of the different factors
like the time taken to sanction the loan by different banks, charges for processing, priority
sectors and black list sectors to provide the finance by the banks, securities charged, and
eligibility criteria of different banks.
Customers are the king of any industry. So enterprises, the customers of the banks are also
surveyed in the project. Different enterprises requirement for working capital is dependent on
their size and the industry into which they are.
59
Sample size of 150 is taken randomly from the population. These enterprises are randomly
chosen from the different industries. They comprise of all small capital, middle capital, and large
capital enterprises. The sample consists of firms from manufacturing, service and trading sectors.
The customers were interviewed and with the help of questionnaire, analysis is made regarding
their expectations for the services of the banks, the satisfaction level in terms of the flexibility,
documentation, interest rates charged and sanctions time. Correlation between the expected
amount and the actual sanctioned amount, and also between the amount sanctioned and
sanctioning time is done. The survey for the preference of the customers for the different banks
is also done in the project.
FINDINGS
AS PER BANKS:
60
 From the study it was found that the banks give loans to most of the customers by
adjusting their criteria.
 The banks focus any one of the cap’s i.e. large, mid or small as per the policies and
standards set within their organization.
 The process fees and the interest rates are almost same in these banks for the trade
working capital finance facility.
 The sanctioned period of the loan depends upon the amount of the loan.
 The security structure differs within banks.
AS PER THE CUSTOMERS:
 From the above study it was found that the customers have their current transactions in
nationalized bank because of the convenience of the location and relationship with the
bank.
 The most preferred parameter for approaching to any bank by the customers is the
interest rate and then easy documentation.
 It was also found that if given a choice to the customers between Corporation Bank,
HDFC, SBI, BOB and UTI customers have chosen Corporation Bank and then SBI &
HDFC because of the following reasons:
61
 Customer oriented approach.
 Fast and accurate services.
 Young and enthusiastic staff.
 Easy documentation.
 Doorstep services and completing the work through telephones.
62
CONCLUSION AND SUGGESTIONS
A report is not said to be completed unless and until the conclusion is given to the report. A
conclusion reveals the explanations about what the report has covered and what is the essence of
the study. What my project report covers is concluded below.
Corporation bank mainly focus on Export and SSI (Automobile, Engineering & Mfg.) sectors to
give working capital loans and they give minimum 1.5 Lakhs and maximum 50 Crores.
 According to the survey we would like to recommend that the banks should increase the
number of branches in the interiors and the industrial areas.
 They should reduce the aggressive marketing as it is not at all welcomed by the
customers.
 They should improve their transparency in work i.e. they should give proper intimations
and updations of the statements, should not charge the hidden charges etc.
63
BIBLIOGRAPHY
 www.rbi.org.in
 www.bankersonline.com
 www.smallindustryindia.com
 www.indianinfoline.com
 www.banknetindia.com
 www.icici.com
 www.google.com
 BUSINESS MAGAZINES AND NEWSPAPER
 www.corporarionbank.com
 Book: Manual on working capital finance (corp. Bank).
64
Annexure (Questionnaire):BANKS ANALYSIS:
Question 1: Analysis of the products related to the working capital loans.
NAME OF BANKS STRUCTURED UNSTRUCTURED

PRODUCTS. (%) PRODUCTS. (%)
Question 2: Analysis of the amount range of working capital loans given by the banks.
NAME OF MINIMUM AMOUNT MAXIMUM

BANKS (Rs.) AMOUNT (Rs.)
Question 3: Analysis of the most preferred mode of security.
NAME OF BANKS PREFERRED MODE OF SECURITY
Question 4: Analysis of the type of securities accepted by the following banks.

NAMES OF COMMERCIAL RESIDENTIAL PLANT & OTHERS
BANK MACHINERY
Question 5: Analysis of the sectors focused for lending working capital loans.
65
NAME OF BANKS FOCUSED SECTORS
Question 6: Analysis of the black list sectors for lending.
Question 7: Analysis of the % of security asked from the customers by the banks.
NAME OF BANKS RANGE
Question 8: Analysis of what is more focused by the banks.
NAME OF BANKS FOCUSED SECTOR
Question 9: Ranks given by different banks for the specified parameters: -
NAME PAT Turnover Liquidity Years of Credibility Amount/Ty Amount

OF existence pe of of I.T.
BANKS security return
Question 10: Analysis of number of years of balance sheet preferred.
Question 11: Analysis of the processing fee charged by the banks.
Question 12: Analysis of the time of charging the processing fee.
Question 13: Analysis of the mortgage fee charged.
NAME OF BANKS MORTGAGE FEE CHARGED
Question 14: Analysis of the process time taken to sanction the loan.
NAME OF UPTO UPTO 1 UPTO 25 UPTO I MORE THAN

BANKS 5000/- LAKH LAKH CRORE 1 CRORE
66
Question 15: Analysis of the installment duration of the repayment of the loans.
Question 16: Analysis of the average interest rates charged by the banks.
NAME OF BANKS AVERAGE RATE OF INTEREST
CHARGED (%)
Question 17: Analysis of the charges for the LC opening.
CUSTOMER ANALYSIS
Question 1: The customer questionnaire.
Question 2: Analysis of the customer’s preference for current account in different banks.
Name of the bank. Number of customers having current

account in it.
Question 3: Analysis of the customers prefer the same bank (bank in which they have current
account) for other investment dealings like FDs, employees salary a/c, savings a/c, EPF, etc.
No. of customer prefer the same Bank No. of customer prefer the another Bank
Question 4: How a customer’s needs vary?
Question 5: What is the average time period taken for payment to suppliers?
Question 6: What is the average time period of receipt from customer?
Question 7: Analysis of the expectations of the customers for the given parameters.
67
The bar chart shows the expectations according to the priorities of the need of the customers for
the following four parameters.
Rank 1 is the highly preferred service and
Rank 4 is the least preferred service. The analysis is done on the four parameters – interest rate,
quick sanction, flexibility, and easy documentation.
Interest Rate No of customers

Rank 1
Rank 2
Rank 3
Rank 4
Total 150
Quick Sanction No of customers

Rank 1
Rank 2
Rank 3
Rank 4
Total 150
Easy documentation No of customers

Rank 1
Rank 2
Rank 3
Rank 4
Total 150
Flexibility No of customers
Rank 1
Rank 2
Rank 3
Rank 4
Total 150
68
Question 8: Analysis of the number of customers requiring working capital loan from the banks.
It includes short-term loan, CC, OD, pre shipment credit, post shipment credit, LC and others.
Loan Taken Loan not taken

Number of customers
Question 9: Analysis of the preferred bank for taking fund based services.
Name of banks Number of customers
Corp. Bank
Canara Bank
SBS
Gujarat Industrial Cooperative Bank
Dena Bank
Union Bank
PNB
SBI
SIDBI
Central Bank
Total number of customers who

have taken loan
69
Question 10: Analysis of the reason for choosing the bank
Criteria for selecting the bank No of customers

Interest Rates
Quick Sanction
Flexibility
Easy Documentation
Relationship
Various Products
Total customers who have taken loan
Question 11: Analysis of Average Interest Rate for Different Banks.
NAME OF AVERAGE
BANK INTEREST RATE
(%)
CORP. BANK
HDFC
SBI
BOB
UTI
Question 12: Analysis of the satisfaction level of the customers from the banks services.
EXCELLENT GOOD AVERAGE POOR TOTAL
(1) (2) (3) (4)

INTEREST 150
SANCTION 150
FLEXIBILITY 150
DOCUMENTS 150
Question 13: Analysis of the preference given to the following banks by the customers on the
basis of awareness of the market.
Name Of The Bank Number Of Customers

CORP. BANK
HDFC
70
SBI
ICICI
BOB
Total 150
71

An Analysis of Working Capital Finance at Corporation Bank at Rajkot Branch

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Management Research Project

“AN ANALYSIS OF WORKING CAPITAL FINANCE AT CORPORATION BANK AT

VORA NAYAN M. & GHODASARA DHAVAL P.

Under the guidance of

Mr. Vora Nayan M.

This is an original contribution in every respect and has not been

previously submitted to any university for any degree.

Good opportunities are rare &

CHAPT TOPIC PURTICULARS PAGE

Working capital & net working capital 9

Working capital Finance:

In other words, the working capital comprises:

a: Amount of raw material of various kinds in store or in-transportation;

c: Value of stock in process;

d: Value of all finished goods including in transit;

e: Amount of receivables or sundry debtors;

The means to finance working capital are:

a: Credit available from suppliers on purchase;

b: Other current liabilities

d: Short term bank borrowing.

Working Capital (As per Corporation Bank):

Working capital and Net working capital

a: Permanent working capital which is minimum amount of investment in current assets

The factors which determine the working capital-

1: Policies for Production,

3: Credit Policy of the unit,

EARLY HISTORY OF BANKING:

THE ORIGIN OF WORD ‘BANK’

STATUS WISE BIFURCATION OF BANKS

Central Bank and Monetary Authority

IDBI1 NABARD2 EXIM BANK IIBI 3 NATIONAL

Commercial Regional Rural Co-Operative

State Bank Nationalized Indian Foreign State Co-op

SBI Subsidiary Old New Local Area Central/

Industrial Development Banks Land Development Banks

All India State Level

Private sector bank:

AN INTRODUCTION TO THE BANKING SECTOR IN INDIA

THE JOURNEY OF CORPORATION BANK

At Corporation Bank, what motivates us is the passion to excel in banking by maintaining

LOGO OF THE CORPORATION BANK

The days that followed:

Shouldering National objectives:

A Big Leap to the Big League:

Growing Bigger. Getting Closer.

Chairman & Managing Directors Profile:

Shri J. M. Garg, Chairman & Managing Director of the Bank

Shri J.M. Garg, a Post Graduate in Physics & Certified Associate of

Mission and vision of corporation bank

-To become a provider of world class financial services.

-To meet customer expectations through innovation & technological initiatives.

-To fulfill national and social obligation as a responsible corporate citizen.

Achievement of corporation bank:

Best Bank Award for Innovative Usage and Application on INFINET

Runner-up Awards in the “Best Online and Multi-channel Banking Team”

India's Best Bank Award - FE, 2007

Best P.S. Bank - Business Today, 2007

SKOCH Challenger Award, 2008 - For Customer Relationship Management

SCOPE Meritorious Award, 2008 - For Best Managed Bank

Banking Technology Awards, 2008 - Runner Up Award - For Best On Line

SWOT Analysis of Corporation Bank

High market share.