Debt Recovery Management

By Archana D Naik
MBA 0902010
 Contents
Company Profile.
Executive summary.
Analysis.
Findings.
Suggestion.
Conclusion.
 STATE BANK OF INDIA

Type : Public (BSE: SBI, LSE:SBID)

Industry : Banking, Financial services.
Founded : Calcutta (1806).
Headquarters : Mumbai, .
Key people : O.P.Bhatt (Chairman).
Products : Investment Banking
Consumer Banking
Commercial Banking
Retail Banking
Private Banking
Asset Management
Pensions
Mortgages
Credit Cards
Revenue (2009) : ▲Rs 113,535.99 crore (US$ 25.32 billion)
Profit : ▲Rs 10,998 crore (US$ 2.45 billion) (2009)
Total Asset (2009) : ▲Rs 1,188,060 crore (US$ 264.94 billion)
Total Equity(2009)  : ▲Rs 65,912 crore (US$ 14.7 billion)
Owner(s) : Government of India
Employees : 205,896 (2010)
Website : Statebankofindia.com
 Executive
Summary
• State Bank of India is the largest commercial bank in India in terms of
assets, deposits, profits, branches and employees. The State Bank of India
is the only Indian bank to rank among the top 100 banks in the world and
is also among the top 20 banks in Asia according to The Banker (UK)
annual survey. SBI is the sixth Indian company to feature in the Fortune
Global 500 companies.
• TITLE OF THE PROJECT: “Debt Recovery Management”
 Analysis

Case Analysis
 Findings
• As on March 2010, the bank NPA is 1.72 %. The NPA is reduced by
0.07% in 2009-2010 compare to 2008-2009 NPA of 1.75%.
• The total NPA includes sub standards , loss assets, doubtful assets, to
the tune of 65% 25% and 10% respectively.
• It is found that 60 % of the NPA the borrowers are closed the business
due to lack of business experience(especially government sponsors
scheme). 20 % of the loans and advances became bad because of
diversion of funds and lack of competition and business skill. 10% of
the total NPA is going back because of the borrowers attitude of
willful defaulting. Another 10 % of the NPA is due to failure of the
business on account of natural calamities and beyond the control of
the borrowers.
 Contd…
• In case of transport advances the 65% of trucks are
engaged in carrying iron ore mine and has effected due
to stay on the activity in 2008-09 and also in 2009-
2010..
• 30 % of car loans are becoming irregular overdue
because of non payment of installments has the
borrowers are not getting their salary in time for paying
their loan installment..
• There is a reduction of Rs.27.74 (amount in 000) in
2010 compared to the profit of 2009.
 Suggestion
• In case of Government sponsored schemes, Bankers have
to take up the issue with Government to give many
preferences to o collateral security rather than primary
security so as to safe guard the interest of both bank and
the beneficiary
• Proper inspection and pre-sanction process wiil avoid the
finding the borrowers address & changed mobile number.
• Repayment programme can be changed to to monthly
installments instead of EMI to Transport loan & the loan
be regular on quarter end. .
• Customer profile should be updated at regular intervals
with Full current information of the borrower/s,
Guarantor/s.
• Regular inspection are to be carried out and findings are
to be reported to controllers
 Contd…
Identified Sick Units be supported for re
generation of funds
RC Book copy is to be obtained for all vehicle
loans
Encourage the Recovery through compromise
Cultivate habit of repayment in the borrower
through regular follow-up
Avoiding deviations at the time of sanction of
the loans / advances
Disposing the loan proposals within the time
norms