PROJECT REPORT

ON

TRAINING POLICIES AND

PRACTICES IN SBI

SUBMITTED IN PARTIAL FULLFILMENT OF

MASTERS OF BUSINESS ADMINISTRATION DEGREE
(SESSION: 2020-22)

Project Supervisor : Submitted by:

Dr. Satyawan Baroda Anjali
M.B.A. Hons
IMSAR, MDU Univ. Roll No. 1022471

INSTITUTE OF MANAGEMENT STUDIES AND

RESEARCH MAHARSHI DAYANAND UNIVERSITY
ROHTAK HARYANA
 DECLARATION BY THE STUDENT

I Anjali, Class MBA of MAHARSHI DAYANAND UNIVERSITY , ROHTAK,

hereby declare that the project entitled “Training Policies and Practices in SBI” is an

original work and the same has not been submitted to any other institute for the award of

any other degree. The project report was presented to the head of project &the feasible

suggestions have been duly incorporated in consultation with the supervisor.

Signature of Student
Anjali
Class : MBA Hons.
Univ. Roll No. : 1022471
Reg. No. : 17R6340458
Date :
Place :Rohtak

Consigned By :

Signature of Head/Principal/Director of Institute

Date :
(seal of the Institute)
 {SUPERVISOR CERTIFICATE)

Certificate
This is to certify that Anjali is a bonafide student of Institute of Management Studies
and Research, Maharshi Dayanand University, Rohtak studying in Master of
Business Administration (General.), University Roll No. 1022315 has submitted a
project report on the title “[Training Policies and Practices in SBI]”as assigned and
approved by the institute for partial fulfillment of the Degree of Master of Business
Administration to Maharshi Dayanand University, Rohtak. Further, the work done by her/
him is carried under my supervision.

Signature of Supervisor

[Dr. Satyawan Baroda]

 ACKNOWLEDGEMENT

"Gratitude is not a thing of expression; it is more a matter of feeling."

There is always a sense of gratitude which one express for others for their help and
supervision in achieving the goals. We too express my deep gratitude to each and
everyone who has been helpful to us in completing the project report successfully.

We would like to thank almighty God for blessing showered on us during the completion
of Dissertation Report.

We give our regards and sincere thanks to Dr. Satyawan Baroda who has devoted her
precious time in guiding us & helping us complete it within time.

We feel self-short of words to thanks our parents and friends who had directly or
indirectly instrumental in the completion of the project. We are indebted to all
respondents for their time passion during the long conversations.

Signature of Supervisor
 Table of Contents
Sr. Particular Page no.
no

Chapter-1
1. Introduction
Problems of the study
Need of the Study
Objectives of the Study
Scope of the Study
Limitation of the study
Chapter-2
2. Research Methodology
Chapter-3
3. Data Analysis and Interpretation
4. Chapter-4
Findings
5. Chapter-5
Suggestions & Recommendations
6. Chapter-6
Bibliography
Questionnaire
 LIST OF TABLES

TABLE NO.. PARTICULARS PAGE

NO.
1.1 Steps involved in Training Policies and Practices
identifications in your bank
1.2 The selection of the borrower is done and how the bank
measures the credit worthiness of client
1.3 The methods of Training Policies and Practices used by
your bank
1.4 The steps involved in credit processing in your bank
1.5 The Training Policies and Practices appraisal take place
in your bank
1.6 Training Policies and Practices monitoring take place in
your bank

1.7 Days a potential NPA gets converted in to NPA

according to your bank policy
1.8 The collection and recovery done by your bank
1.9 The major Training Policies and Practices mitigation
strategies followed by your bank
 LIST OF FIGURES
TABLE NO.. PARTICULARS PAGE
NO.
1.1 Steps involved in Training Policies and Practices
identifications in your bank
1.2 The selection of the borrower is done and how the bank
measures the credit worthiness of client
1.3 The methods of Training Policies and Practices used by
your bank
1.4 The steps involved in credit processing in your bank
1.5 The Training Policies and Practices appraisal take place
in your bank
1.6 Training Policies and Practices monitoring take place in
your bank

1.7 Days a potential NPA gets converted in to NPA

according to your bank policy
1.8 The collection and recovery done by your bank
1.9 The major Training Policies and Practices mitigation
strategies followed by your bank
 CHAPTER 1

INTRODUCTION
 INTRODUCTION

Without a sound and effective banking system in India it cannot have a healthy
economy. The banking system of India should not only be hassle free but it should be
able to meet new challenges posed by the technology and any other external and internal
factors.

For the past three decades India’s banking system has several outstanding achievements
to its credit. The most striking is its extensive reach. It is no longer confined to only
metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even
to the remote corners of the country. This is one of the main reasons of India’s growth
process

The government’s regular policy for Indian bank since 1969 has paid rich dividends with
the nationalization of 14 major private banks of India.

Not long ago, an account holder had to wait for hours at the bank counters for getting a
draft or for withdrawing his own money. Today, he has a choice. Gone are days when the
most efficient bank transferred money from one branch to other in two days. Now it is
simple as instant messaging or dials a pizza. Money has become the order of the day.

The first bank in India, though conservative, was established in 1786. From 1786 till
today, the journey of Indian Banking System can be segregated into three distinct phases.
They are as mentioned below:

• Early phase from 1786 to 1969 of Indian Banks

• Nationalization of Indian Banks and up to 1991 prior to Indian banking sector

Reforms.

New phase of Indian Banking System with the advent of Indian Financial & Banking
Sector Reforms after 1991.
The General Bank of India was set up in the year 1786. Next came Bank of
Hindustan and Bengal Bank. The East India Company established Bank of Bengal
(1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and
called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial
Bank of India was established which started as private shareholders banks, mostly
Europeans shareholders.

In 1865 Allahabad Bank was established and first time exclusively by Indians,
Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between
1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank,
Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also experienced
periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly
small. To streamline the functioning and activities of commercial banks, the Government
of India came up with The Banking Companies Act, 1949 which was later changed to
Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965).
Reserve Bank of India was vested with extensive powers for the supervision of banking
in India as the Central Banking Authority.

During those day’s public has lesser confidence in the banks. As an aftermath
deposit mobilization was slow. Abreast of it the savings bank facility provided by the
Postal department was comparatively safer. Moreover, funds were largely given to
traders.

PhaseI1

Government took major steps in this Indian Banking Sector Reform after
independence. In 1955, it nationalized Imperial Bank of India with extensive banking
facilities on a large scale especially in rural and semi-urban areas. It formed State Bank of
India to act as the principal agent of RBI and to handle banking transactions of the Union
and State Governments all over the country. Seven banks forming subsidiary of State
Bank of India was nationalized in 1960 on 19th July, 1969, major process of
nationalization was carried out. It was the effort of the then Prime Minister of India, Mrs.
Indira Gandhi. 14 major commercial banks in the country were nationalized.

Second phase of nationalization Indian Banking Sector Reform was carried out in
1980 with seven more banks. This step brought 80% of the banking segment in India
under Government ownership.

The following are the steps taken by the Government of India to Regulate Banking
Institutions in the Country:

1949: Enactment of Banking Regulation Act.

1955: Nationalization of State Bank of India.
1959: Nationalization of SBI subsidiaries.
1961: Insurance cover extended to deposits.
1969: Nationalization of 14 major banks.
1971: Creation of credit guarantee corporation.
1975: Creation of regional rural banks.
1980: Nationalization of seven banks with deposits over 200 crores.

After the nationalization of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.

Banking in the sunshine of Government ownership gave the public implicit faith and
immense confidence about the sustainability of these institutions.

PhaseIII

This phase has introduced many more products and facilities in the banking
sector in its reforms measure. In 1991, under the chairmanship of M Narasimham, a
committee was set up by his name which worked for the liberalization of banking
practices.

The country is flooded with foreign banks and their ATM stations. Efforts are
being put to give a satisfactory service to customers. Phone banking and net banking is
introduced. The entire system became more convenient and swift. Time is given more
importance than money.

The financial system of India has shown a great deal of resilience. It is sheltered
from any crisis triggered by any external macroeconomics shock as other East Asian
Countries suffered. This is all due to a flexible exchange rate regime, the foreign reserves
are high, the capital account is not yet fully convertible, and banks and their customers
have limited foreign exchange exposure.

Nationalization of Banks in India

The nationalization of banks in India took place in 1969 by Mrs. Indira Gandhi
the then prime minister. It nationalized 14 banks then. These banks were mostly owned
by businessmen and even managed by them.

• Central Bank of India

• Bank of Maharashtra

• Dena Bank

• Punjab National Bank

• Syndicate Bank

• Canara Bank

• Indian Bank

• Indian Overseas Bank

• Bank of Baroda

• Union Bank

• Allahabad Bank

• United Bank of India

• UCO Bank

• Bank of India

Before the steps of nationalization of Indian banks, only State Bank of India (SBI)
was nationalized. It took place in July 1955 under the SBI Act of 1955. Nationalization of
Seven State Banks of India (formed subsidiary) took place on 19th July, 1960.

The State Bank of India is India’s largest commercial bank and is ranked one of the
top five banks worldwide. It serves 90 million customers through a network of 9,000
branches and it offers — either directly or through subsidiaries — a wide range of
banking services.

The second phase of nationalization of Indian banks took place in the year 1980.
Seven more banks were nationalized with deposits over 200 Crores. Till this year,
approximately 80% of the banking segment in India was under Government ownership.
After the nationalization of banks in India, the branches of the public sector banks rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.

The following are the Scheduled Commercial Banks in India:-

• State Bank of India

• State Bank of Bikaner and Jaipur
• State Bank of Hyderabad
• State Bank of Indore
• State Bank of Mysore
• State Bank of Patiala
• State Bank of Saurashtra
• State Bank of Travancore
• Allahabad Bank
• Bank of Baroda
• Bank of India
• Bank of Maharashtras
• Canara Bank
• Central Bank of India
• Corporation Bank
Indian Overseas Bank

• Indian Bank
• Oriental Bank of Commerce
• Punjab National Bank
• Punjab and Sind Bank
• Syndicate Bank
• Union Bank of India

The following are the Scheduled Banks in India (Private Sector):

• Vysya Bank Ltd
• Axis Bank Ltd
• Indusind Bank Ltd
• ICICI Banking Corporation Bank Ltd
• Global Trust Bank Ltd
• HDFC Bank Ltd
• Centurion Bank Ltd
• Bank of Punjab Ltd
• IDBI Bank Ltd

The following are the Scheduled Foreign Banks in India:

• American Express Bank Ltd.
• ANZ Gridlays Bank Plc.
• Bank of America NT & SA
• Bank of Tokyo Ltd..
• Deutsche Bank A.G.
• Hongkong and Shanghai Banking Corporation
• Standard Chartered Bank.

SWOT ANALYSIS
STRENGTH

 Wide distributions of banks and ATM’s.

 Diversity, resilience and flexibility.

 Quality service is assured if one has a banking relationship with Dena Bank.

 Large no. of branches in Metros.

 Strong sales team who are recruited through tough interviews

 Well-Reputed Bank, India’s third largest bank in terms of assets and second
largest bank in terms of number of branches

WEAKNESS

 Lack of customer discrimination

 Problem of recovery agents

 Lack of promotional activities to promote their products and services.

  HDFC,ICICI,SBI and CITI banks are dominant players in the market

 Logistics/service delivery is slow

 High interest on housing loan

 Bank charges are high


OPPORTUNITIES

 Television banking is another sector which banks can target upon

 Bank should increase their distribution network which can provide them
competitive edge over their competitors.

 Banks should invest in technology to ensure reliable service delivery.

 Banks can target young generation who use more of working capital product.

 Make aggressive forays in the retail advances segment of home and personal
loans.

THREATS

 Competition from private and foreign banks.

 Lack of education and awareness among people about various banking services.
 In India, traders believe in cash transactions rather than going for loans and credit
cards.
 Change in consumer behavior.

 As very few people use online deposit of income tax because they do not find this
system reliable.

 Principles for the Management of Training Policies and

Practices

 I. Introduction

 1. While financial institutions have faced difficulties over the years for a
multitude of
 reasons, the major cause of serious banking problems continues to be directly
related to laxcredit standards for borrowers and counterparties, poor portfolio risk
management, or a lackof attention to changes in economic or other circumstances
that can lead to a deterioration in the credit standing of a bank’s counterparties.
This experience is common in both G-10 andnon-G-10 countries.

 2. Training Policies and Practices is most simply defined as the potential that
a bank borrower or Counter party will fail to meet its obligations in accordance
with agreed terms. The goal of Training Policies and Practices is to maximise a
bank’s risk-adjusted rate of return by maintaining Training Policies and Practices
exposure within acceptable parameters. Banks need to manage the Training
Policies and Practices inherent in the entire portfolio as well as the risk in
individual credits or transactions. Banks should also consider the relationships
between Training Policies and Practices and other risks. The effective
 management of Training Policies and Practices is a critical component of a
comprehensive approach to risk management and essential to the long-term
success of any banking organization
 .

 3. For most banks, loans are the largest and most obvious source of Training
Policies and Practices ;however, other sources of Training Policies and Practices
exist throughout the activities of a bank, including in thebanking book and in the
trading book, and both on and off the balance sheet. Banks areincreasingly facing
Training Policies and Practices (or counterparty risk) in various financial
instruments otherthan loans, including acceptances, interbank transactions, trade
financing, foreign exchangetransactions, financial futures, swaps, bonds, equities,
options, and in theextension ofcommitments and guarantees, and the settlement of
transactions.

 4. Since exposure to Training Policies and Practices continues to be the

leading source of problems in bank
 world-wide, banks and their supervisors should be able to draw useful lessons
from past
 experiences. Banks should now have a keen awareness of the need to identify,
measure,
 monitor and control Training Policies and Practices as well as to determine that
they hold adequate capital againstthese risks and that they are adequately
compensated for risks incurred. The Basel Committeeis issuing this document in
order to encourage banking supervisors globally to promote soundpractices for
managing Training Policies and Practices. Although the principles contained in
this paper are mostclearly applicable to the business of lending, they should be
applied to all activities whereTraining Policies and Practices is present.
 5. The sound practices set out in this document specifically address the
following areas: (i) establishing an appropriate Training Policies and Practices
environment; (ii) operating under a sound creditgrantingprocess; (iii) maintaining
an appropriate credit administration, measurement andmonitoring process; and
(iv) ensuring adequate controls over Training Policies and Practices. All though
specificTraining Policies and Practices practices may differ among banks
depending upon the nature .

 6. While the exact approach chosen by individual supervisors will depend

on a host
 factors, including their on-site and off-site supervisory techniques and the degree
to whichexternal auditors are also used in the supervisory function, all members
of the BaselCommittee agree that the principles set out in this paper should
be used in evaluating abank’s Training Policies and Practices system.
Supervisory expectations for the Training Policies and Practicesapproach used by
individual banks should be commensurate with the scope and
 sophistication of the bank’s activities. For smaller or less sophisticated banks,
supervisorsneed to determine that the Training Policies and Practices approach
used is sufficient for theiractivities and that they have instilled sufficient risk-
return discipline in their Training Policies and Practicesmanagement processes.
The Committee stipulates in Sections II to VI of the paper, principlesfor banking
supervisory authorities to apply in assessing bank’s Training Policies and
Practicessystems. In addition, the appendix provides an overview of
creditproblems commonly seen by supervisors.

 7. A further particular instance of Training Policies and Practices relates to the
process of settling financial
 transactions. If one side of a transaction is settled but the other fails, a loss may be
incurredthat is equal to the principal amount of the transaction. Even if one party
is simply late insettling, then the other party may incur a loss relating to missed
 investment opportunities.Settlement risk (i.e. the risk that the completion or
settlement of a financial transaction willfail to take place as expected) thus
includes elements of liquidity, market, operational andreputational risk as well as
Training Policies and Practices. The level of risk is determined by the
particulararrangements for settlement. Factors in such arrangements that have a
bearing on Training Policies and Practicesinclude: the timing of the exchange of
value; payment/settlement finality; and the role ofintermediaries and clearing
houses.

 8 This paper was originally published for consultation in July 1999. The
Committee is grateful to the central banks, supervisory authorities, banking
associations, and institutions that provided comments. These comments have
informed the production of this final version of the paper.

TRAINING POLICIES AND PRACTICES FRAMEWORK:-

Training Policies and Practices also involves findings answer to four key question.

(A) What are the risk?

(B) Which, when and how much risk to accept that results in improving bottom-line?

(C) How can we monitor and control Training Policies and Practices?
 (D) Can we reduce the risk? And, if so then how?

Training Policies and Practices:

 TRAINING POLICIES AND PRACTICES PROCESS:-

Accordingly, Training Policies and Practices processes are sub-divided into following
four parts:-

o Training Policies and Practices Identification

o Training Policies and Practices Measurement

o Training Policies and Practices Monitoring and Control

 o Training Policies and Practices Mitigation

Management of Training Policies and Practices needs an organization structure in place

that can carry out the functions required for the purpose

RISK IDENTIFICATION:-

Training Policies and Practices arises from potential changes in the credit quality of
a Borrower.

COMPONENTS OF TRAINING POLICIES AND PRACTICES;-

(A) It is driven by the potential by the potential failure of a borrower to make

promised
(B) Credit Spread Risk or Downgrade Risk

Default Risk:-
Default is payments, either party or wholly. In the event of default, a fraction of the
obligations will normally be paid. This is known as the recovery rate.

Default risk and downgrade risk are transaction level risk. Risks associated with credit
portfolio as a whole is termed portfolio risk. Portfolio risk has two components.

(1) Systematic or intrinsic risk

(2) Concentration Risk

Credit Spread Risk or Downgrade Risk:-

If a borrower does not default, There is still due to worsening in credit quality, This
Result in the possible widening of the credit – spread. This is credit spread risk.These
may arise from a rating change.

Loans are not usually Market to Market. Consequently, the only important factor is
whether or not the loan is in default today (since this is only credit event that can lead to
an immediate loss).
 OBJECTIVES OF STUDY:-

The study has been undertaking with the following objectives:

 To review the existing practices of risk management in Indian Banks.

 To find out recurring common risks incidents and the causes for the same.

 To find out the constraints in implementations of effective Training Policies and

Practices systems

 To find out whether banks have realized the importance of human factor in building
Training Policies and Practices systems

 To find out whether adoption of risk management systems has resulted in better
credit management

.
 SCOPE OF STUDY

o This project report focuses on Training Policies and Practices and it’s
comparison with industries.

o Understanding the functions of credit.

o Understanding the credit framework.

o Understanding the process of credit management.

o Understanding the Training Policies and Practices identification.

 Limitations of the study

1. Inefficient Data Management

Training Policies and Practices solutions require the ability to securely store, categorize
and search data based on a variety of criteria. Any database needs to be updated in real-
time to avoid potentially outdated information, as well as be keyword optimized to ensure
the easy location of information.

2. Limited Group-Wide Risk Modeling Infrastructure

Sometimes it’s not enough to examine the risk qualities posed by a single entity—a
broad, comprehensive view of all risk measures as seen from above is key to
understanding the risk posed by a new borrower to the group. Robust stress-testing
capabilities and model management that spans the entire modeling life cycle is key to
ensuring accurate risk assessment.

3. Lacking Risk Tools

Identifying portfolio concentrations or re-grade portfolios is essential to ensure you’re

seeing the big picture. A comprehensive risk assessment scorecard should be able to
quickly and clearly identify strengths and weaknesses associated with a loan. 
4. Less-than-intuitive Reporting and Visualization

Forget cumbersome, spreadsheet-based processes—to glean the most valuable insights,

data and analysis must be presented in an intuitive, clean and clearly visualized way.
Stripping away irrelevant data that overburdens analysts and IT can help zero in on the
most pertinent information.

Modern risk management tools present user-friendly front-end interfaces and flexible
back-end configurations. When banks and credit unions can integrate analytics
capabilities over a broad range of processes using risk analytics software, the end result
is increased business flexibility. 

PROBLEMS OF THE STUDY:-

 The management may need to rework on the credit rating evaluated earlier.


 Such a task is difficult due to the repetitive information available at the desk.

 There may be chances of data inefficiency. It means the management is unable to

access the right source of information.

 Further, there may be an inconsistency of the same data from two sources. The
management may get confused about the reliability of data.

 The credit analysis tools may not sufficient for unknown customers.

 Automatic the process of risk analysis is difficult due to subjectivity involved in

every case.
  Over burdening of data is another challenge and it’s difficult to pick the relevant
data.

Need of the study:-

 Risk is something acceptable thing for a normal banking operation.



 Training Policies and Practices plays the role of preventive measure to mitigate
the probable risk or to reduce the chances of occurrence of the risk.


 This further helps bankers to protect the valued treasure from credit unworthy
customers, who may defalcate the hard-owned money of depositors.


 Training Policies and Practices is further important to decide on the collateral to

be taken.


 It helps bankers to take cautious decisions.

 CHAPTER -2

RESRARCH METHODOLOGY
 RESEARCH METHODOLOGY

Research decision:-
A research design is a plan, structure and strategy of investigation conceived so as to
obtain answers to research questions and control variance.

Types of research design:-

1) Exploratory research :-

It focuses on the discovery of ideas.It is generally secondary data that are

readily available . It does not have a formal and rigid design An explorator
investigation wherein the researcher himself is not sufficientknowledgeable
and is , therefore , unable toframe detailed research question.

2) Descriptive research :

The objective of such a study is to answer the who , what , where and
how of the subject under investigation . they are well structured .
 Casual designs :
A casual design investigates the cause and effect relationship between
two or more variables .

Research methodology for the project:-

Research design used here is exploratory research.

Data collected are both primary data and secondary data.

Primary data :-
This data has been collected from executive working in dena bank
And from the executive working in the private bank through formal
Discussions and questionnaire.

Secondary data:-

This data has been collected from dena bank from journals ,books
records maintained by the bank etc.

Data collection Method:-

Primary data :- Primary data is the data which is collected at first hand either
by the researcher or by someone else specially for the purpose of study.

Methods:-
o Observation
o Questionnaire:- It may include open ended questions and multiple choice
questions.
 o Survey

Secondary data: Any data which has been gathered earlier for some purpose
is secondary data in the hands of researcher.

Sources of secondary:-

Internal sources
 Accounting records of the organization
 Sales force report
 Miscellaneous reports or studies done earlier within the company.
 Executives and experts working in the company.

External sources
 Government publications.
 Consumer research studies.
 Syndicate services.
 Qualitative research.
 Opinion surveys.
 Publications of international organizations.
 Internet,Magazines,Journals,Newspaper

LIMITATION :-

This report will only consider Training Policies and Practices practice of dena bank
limited.It will not cover;

 Asset and liability/ balance sheet risk

 Foreign Exchange Risk
 Internal control And compliance risk.
 Money laundering Risk

CHAPTER:-3

DATA ANALYSIS AND INTERPRETATIONS

 Analysis of data:-

1. STEPS INVOLVED IN CREDIT PROCESSING:-

Credit processing of dena bank includes obtaining application for the proposed
credit limits, financial data of a firm or company for the last 3 years, IT return for
lat 3 years, project report includes projected financial requirement, necessary
licence and local or legal requirement to run the bussines, margin / security
offered/ validity of sec.The interview was conducted on the personnel of dena
bank in the context of Training Policies and Practices. The analysis was more of
quantitative in nature and interpretation of the analysis is given below:

2. STAGES INVOLVED IN TRAINING POLICIES AND PRACTICES

IDENTIFICATION:-

Training Policies and Practices identification of dena bank includes both fund
based loan and non
Fund Based loan. So bank has put in place the Training Policies and Practices
rating system towards
Effective.Measurement, monitoring and mitigation of such risks in its credit
portfolio.
3. CRITERIA FOR THE SELECTION OF BORROWER :-

Criteria for selecting of borrower and measuring the credit worthiness of client
includes time period of association of the company or individual with bank,
satisfactory conduct of the account of the company and individual (past track
record), accounts of family and friends with the bank, net worth of the promoters/
individual, market standing/ reputation of the company or individual , outside
liabilities of company and individual.

4. METHODS OF TRAINING POLICIES AND PRACTICES MEASUREMENT :-

Methods of Training Policies and Practices in dena bank includes : Ratio analysis
(a) Current ratio
(b) Debt equity ratio
(c) Profitability ratio
(d) Sales turnover ratio
(e) Interest coverage ratio

Current ratio 20%

Debt equity ratio 20%

Profitability ratio 20%

Sales turnover ratio 20%

Interest coverage ratio 20%

 5. HOW TRAINING POLICIES AND PRACTICES APPRAISAL TAKE PLACE:-

Training Policies and Practices appraisal take place in Dena bank by taking following
steps: Either bank approaches the prospective borrower or prospective
borrower approaches the bank his/her financial need bank ascertain the nature of
financial requirement of customer and access the quantum of financial need of the
customer, financial ability of the project and the capacity of borrower and technical
feasibility is assessed to make sure that borrower is having sufficient knowledge or has
technical staff to run the project.

1. HOW MANY DAYS A POTENTIAL NPA CONVERTED IN TO A

NPA:-

According to Dena bank policy, a potential NPA gets converted into NPA in 90 days
.
2. STRATEGY OF TRAINING POLICIES AND PRACTICES MITIGATION:-
Major Training Policies and Practices mitigation strategies followed by bank are
credit report of prospective customer from his /her present banker, collateral security to
cover the advance and also take guarantor for the advance.

8. PROCESS OF COLLECTION AND RECOVERY:-

Collection and recovery is done through recovery agencies.

 CHAPTER-4
FINDINGS

FINDINGS

1. TRAINING POLICIES AND PRACTICES POLICY:-

The Training Policies and Practices policy would be guiding principle for the loan
policy. The guidelines under Training Policies and Practices policy have been
integrated to build quality asset portfolio and to minimize risk. Guidelines under
Training Policies and Practices policy strictly adhered to, with specific reference
to Training Policies and Practices rating, credit monitoring, risk mitigation,
pricing and operational procedures.

TRAINING POLICIES AND PRACTICES IDENTIFICATION:-

1.1.1) The bank recognizes that every credit decision, in respect of both FBL and
NFBL, involves Training Policies and Practices. Therefore, the bank has put in
 place the Training Policies and Practices rating system towards effective
measurement, monitoring and mitigation of such risk in its credit portfolio.

1.2 TRAINING POLICIES AND PRACTICES

MEASUREMENT:-

1.2.1) The measurement of Training Policies and Practices in respect of

borrowing accounts
with credit limits of Rs 10 lakhs and above through a system of credit
rating as approved by the board of directors and as amended from time
to time.

1.3 TRAINING POLICIES AND PRACTICES RATING

SYSTEM:-

1.3.1 The bank will follow risk rating system applicable to all borrowers with the
Total exposuref above Rs 10 lakhs (fund based & non fund based.)

1.3.2 Credit rating model ill bary in the level of sophistication and complexity,
Depending upon whether the loans are for new units/existing units.

1.3.3 As per extent policy guidelines risk rating system is available to all
Borrowers with total fun& non fund based exposure of above Rs 10 lakh

1.3.4 In the case of borrowers availing aggregate credit limits of Rs5 crore and
above, credit rating exercise will be applicable twice a year, once based on
audited financial accounts and once based on provisional half yearly accounts
as per extent guidelines.
1.3.5 Even NFB exposure needs to be rated and all proposals should be accompanied by
the credit score sheets duly approved by the competent authority.

1.3.6 Training Policies and Practices policy pf the bank proposes for delegation of
discretionary powers for credit related decisions by linking to credit of borrowers. In the
absence of accurate rating of all eligible bprrower, linking of delegation of power to
rating of the client will pose operational difficulties in exercising discretionary powers.
Further, refining of rating model is also required to eliminate subjectives. It is therefore
found not appropriate to link the discretionary powers to rating of borrowers as at
present. More so, rating will be uniform and realistic with credit desk focusing on risk
angle of credit decision devoid of business development angle. In addition, building data
base will enable to take up risk migration analysis and proposing mitigation techniques.

1.4. TRAINING POLICIES AND PRACTICES MITIGATION

METHODOLOGY

1.4.1 GUIDELINES FOR OPERATIONAL UNITS:-

14.1.1 With a view to enable operational units to build up a credit portfolio of

Good quality, the Bank adopts pro-active Training Policies and Practices
policies like bringing out periodically industry Monitors/ updates studies
on mortality rate of assets etc.

14.1.2 The bank also provides and periodically update its documents setting out
credit origination And maintenance procedure (i.e. Manual of Instructions
on credit ), guidelines on pro-active.Portfolio management and remedial
management (rehabilitation/ re- structuring of credit.
 14.1.3 The control mechanism has two dimensions, first, ensuring compliance of
necessary Monitoring terms, maintaining continuousfollowupand supervision
measures, secondiy.Adoption of suitable risk mitigation measure.

14.1.4 In the later stage, the available option include:

1) Avoidance by staying away from risky borrower.
2) Reducing exposure i.e. adherence to lower limit.
3) Fixing higher level of margin.
4) Insurance cover of assets against loss, damage, calamity etc.
5) Obtaining guarantees and counter guarantees/ collaterals.
6) Institutional guarantee cover against default risk from credit guarantee
fund scheme for Small industry.

1.4.2. PORTFOLIO RISK DIVERSIFICATION METHODS:-

1.4.2. Bank shall strictly comply with the RBI guidelines on prudential exposure norms.

1.4.2.2. Definition: “Exposure” shall include

A) Credit exposure (funded & non-funded credit limits)

B) Investment exposure (including underwriting & similar commitments) as well as

certain types of investments in companies.

C) The sanctioned limits or outstanding, whichever are higher, shall be reckoned for
arriving at exposure limit. However, in case of fully drawn terms loan, where
there is no scope for re-drawal of any portion of the sanctioned limits, bank may
 reckon the outstanding as exposure
.
D) In the case of other term loans, the exposure shall be computed as usual i.e.
Sanctioned limits or outstanding, whichever is higher.

E) Both funded and non- funded will attract 100% risk weight age for prudential
norms.

1.4.2.3. Bills purchased/discounted/negotiated under LC (where the payment to the

beneficiary is not made “under reserve” will be treated as an exposure on the
LC issuing bank and not on the borrower. In case of negotiations “under
reserve”, the exposure should be treated as on the borrower.

1.4.2.4. The bank will adhere to the prudential exposure norms for taking exposure
towards an individual borrower, group of borrowers and for infrastructure
projects prescribed by the regulator.

Exemptions :-

 Rehabilitation of sick/weak industrial units- the ceilings on single/group

exposures limits would not be applicable to existing/additional credit facilities
(including funding of interest and irregularities) granted to weak/sick industrial
units under rehabilitation packages.

 Food credit-borrowers to whom limits are allocated directly by the reserve bank,
for food credit, will be exempt from the ceiling.

 Guarantee by the government of India- the ceilings on single/group exposures

limits would not be applicable where principal and interest are fully guaranteed
by the government of India.
 Loans against own term deposits – loans and advances granted against the
security of bank’s own term deposits may be excluded from the purview of the
exposure ceiling.

CHAPTER -5

SUGGESTIONS AND RECOMMENDATION

 SUGGESTIONS AND RECOMMENDATION:-

A banker can not sleep well with bad debts in his portfolio. The failure of public banks
Occurs mainly due to bad loans, which occurs due to the inefficient management of the
loans and advances portfolio. Therefore any bank must be extremely cautious about its
lending portfolio and credit policy. So far dena bank has been able to manage its credit
portfolio skillfully and kept the classified loan at a very lower rate…..thanks go to the
standard and strigent credit appraisal policy and practices of the bank.

But all the things around us are changing at an accelerating rate.Today is not like
Yesterday and Tomorrow will be different from a day. Given the fast changing, dynamic
global economy and increasing pressure of globalization, liberalization, consolidation and
disintermediation,it is essential that are sensitive to these changes. To improve the risk
management culture further, Dena bank should adopt some of the industry best practices
that are not practiced currently.These are:
(1) Dena bank should adopt- a credit grading system.All facilities should be assigned
a risk grade. And the borrowers risk grades should be clearly stated on credit
application.

(2) In private banks there are different departments for each activities like Risk
control, Risk assessment, Risk mitigation but in dena bank it is kept in one place
therefore it can also be segregate all activities.

(3) An early Alert accounts system should be introduced to have adequate

monitoring, supervision or close attention by management.

(4) In private banks collection and recovery is very strong. There should be a
recovery unit to manage directly accounts- with sustained deterioration. To
encourage recovery unit incentive program may also introduced.
 CHAPTER- 6
BIBLIOGRAPHY
 BIBLIOGRAPHY

Web
 http://www.articlesnatch.com/Article/E-commerce-In-Global-Sourcing-
Scenario/218150 (last accessed on 20th march , 2012)
 http://usa.usembassy.de/economy-ecommerce.htm (last accessed on 20th march ,
2012)
 http://archive.unctad.org/templates/webflyer.asp?
docid=4253&intItemID=2261&lang=1 (last accessed on 20th march , 2012)
 http://en.wikibooks.org/wiki/ECommerce_and_EBusiness/
ECommerce_in_Developing_Countries (last accessed on 20th march ,2012)
 http://www.wipo.int/copyright/en/ecommerce/ip_survey/chap5.html (last
accessed on 20th march , 2012)
 http://www.nytimes.com/2003/11/24/business/e-commerce-report-sensing-
economic-opportunities-many-developing-nations-are.html?
pagewanted=all&src=pm (last accessed on 20th march, 2012)
 http://www.isoc.org/inet99/proceedings/1g/1g_2.htm (last accessed on 20th
march, 2012)
 http://www.bestindiansites.com/top-companies/e-commerce/ (last accessed on 20th
march, 2012)
  http://www.india-ecommerce.com/ecommerce-web-development.html (last
accessed on 20th march,2012)

Books
 Laudon Kenneth C., Traver Carol Guercio (2008) , E-commerce – Business ,
technology , society ,New Delhi ,Pearson Education

Newspapers
 Hindustan Times

QUESTIONNAIRE
 ANNEXURE

QUESTIONNAIRE

REGARDING TRAINING POLICIES AND PRACTICES

1) Name:

2) Designation:

3) Phone No:

Q1) What are the steps involved in Training Policies and Practices
identification in your bank?
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
………..
Q2) On What criteria the selection of the borrower is done and how
the bank measures the credit worthiness of the client?
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
………………………………………………………
Q3) What are the methods of Training Policies and Practices used by
your bank?
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………

Q4) What are the steps involved in credit processing in your bank?
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
Q5) How does the Training Policies and Practices appraisal take
place in your bank?
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
Q6) How does Training Policies and Practices monitoring take place
in your bank?
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………

Q7) After how many days a potential NPA gets converted in to NPA
according to your bank policy?
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………

Q8) How is the collection and recovery done by your bank?

……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………

Q9) What are the major Training Policies and Practices mitigation
strategies followed by your bank?
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………

(THANK YOUR FOR YOUR COORPOERATION)

Signature
……
REFERENCE
BOOKS:-
 Marketing management
 Kothari,c.r,Research methodology
 Suneja H.R management of bank credit by, Himalya publishing house.
 D.D. mukherjee

 Manual interaction of Dena bank

NEWS PAPER:-

 TIMES OF INDIA
 FINANCIAL EXPRESS

INTERNET WEBSITES AND E-BOOKS:-

http://www.dena bank.com

http://www.banknet India.com

http://rbi.org.in

http://www.unepf.com

http://www.study finance.com