INTRODUCTION Methodology: Data Collection is a Step in the preparation of project report. The information is collected in following manner.
Primary sources: Data is collected by the interacting with bank managers and officers.
Secondary sources: The data is collected for report by various records maintained and standing orders of the banks which help as lot for preparing this report. A lot of data were also collected by referring to magazines and news paper, annual reports of bank.
Objectives: To study the loans and advances of the bank To study the evaluation and performance of the bank
To study the financial statement
To study the source of finance of the bank
To study the history of the bank
To understand functioning of bank
PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
Sample size is limited due to the limited period allotted for the survey.
Non availabity of adequate and essencial information due to complex nature of the study.
Inability of the bank personnel to provide adequate information due to their pre-occupation with their work.
Survey is costly and tedious.
PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
INDUSTRY PROFILE BANK A bank is a business center that deals in financial services. A bank is a place where your money is safe-locked and a secure place to dispose off your earnings. Banking service in general includes receiving deposit money, lending money and processing transactions. The history of origination of bank goes back a long way. Since then, banks have influenced the economy of countries. India has a number of both government undertaken banks as well as private ones. Meaning of Banking: A bank is an institution which deals in money and credit. Thus, bank is an intermediary which handles other people’s money both for their advantage and to its own profit. But bank is not merely a trader in money but also an important manufacturer of money. In other words, a bank is a factory of credit. Definition of Banking: According to Section 5(1)(b), “Banking means accepting for the purpose of lending or investing, of deposits of money from the public, repayable on demand or otherwise and withdrawable by cheques, draft, and order or otherwise”. Definition of Banking Company: Section 5(1)(c), defines banking company as, “Any company which transacts the business of banking in India”.
PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY Features of Banking: The following are the basic characteristics of Banking: Dealing in Money: The banks accept deposits from the public and advancing them as loans to the needy people. The deposits may be different types –current, fixed, savings, etc. accounts. The deposits are accepted on various terms and conditions. Deposits must be withdrawable: The deposits made by the public can be withdrawable by cheques, draft or otherwise, i.e., bank issue and pay cheques. The deposits are usually withdrawable on demand. Dealing with credit: The bank are the institutions that can create credit i.e., creation of additional money for lending. Thus, “creation of credit” is the unique feature of banking. Commercial in nature: Since all the banking functions are carried on with the aim of making profit, it is regarded as a commercial institution. Nature of agent: Besides the basic functions of accepting deposits and lending money as loans, bank possesses the character of an agent because of its various agency services.
Banking in India Banking in India originated in the first decade of 18th century with The General Bank of India coming into existence in 1786. This was followed by Bank of Hindustan. Both these banks are now defunct. The oldest bank in existence in India is the State Bank of India being established as "The Bank of Bengal" in Calcutta in June 1806. A couple of decades later, foreign banks like Credit Lyonnais started their Calcutta operations in the 1850s. At that point of time, Calcutta was the most active trading port, mainly due to the trade of the British Empire, and due to which banking activity took roots there and prospered. The first fully Indian owned bank was the Allahabad Bank, which was established in 1865.By the 1900s, the market expanded with the establishment of banks such as Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai - both of which were founded under private ownership. The Reserve Bank of India formally took on the responsibility of regulating the Indian banking sector from 1935. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers. The Indian Banking industry, which is governed by the Banking Regulation Act of India, 1949 can be broadly classified into two major categories, non-scheduled banks and scheduled banks. Scheduled banks comprise commercial banks and the co-operative banks. In terms of ownership, commercial banks can be further grouped into nationalized banks, the State Bank of India and its group banks, regional rural banks and private sector banks (the old/ new domestic and foreign). These banks have over 67,000 branches spread across the country.
PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARSâ€™ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY Stages of development of Banks in India • Early history • During the wars • Post independence • Nationalisation • Leberalisation • Current scenario
Early history At the end of late-18th century, there were hardly any bank in India in the modern sense of the term. At the time of the American Civil War, a void was created as the supply of cotton to Lancashire stopped from the Americas. Some banks were opened at that time which functioned as entities to finance industry, including speculative trades in cotton. With large exposure to speculative ventures, most of the banks opened in India during that period could not survive and failed. The depositors lost money and lost interest in keeping deposits with banks. Subsequently, banking in India remained the exclusive domain of Europeans for next several decades until the beginning of the 20th century. At the beginning of the 20th century, Indian economy was passing through a relative period of stability. Around five decades have elapsed since the India's First war of Independence, and the social, industrial and other infrastructure have developed. At that time there were very small banks operated by Indians, and most of them were owned and operated by particular communities. The banking in India was controlled and dominated by the presidency banks, namely, the Bank of Bombay, the Bank of Bengal, and the Bank of Madras - which later on merged to form PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY the Imperial Bank of India, and Imperial Bank of India, upon India's independence, was renamed the State Bank of India. There were also some exchange banks, as also a number of Indian joint stock banks. All these banks operated in different segments of the economy. The presidency banks were like the central banks and discharged most of the functions of central banks. They were established under charters from the British East India Company. The exchange banks, mostly owned by the Europeans, concentrated on financing of foreign trade. Indian joint stock banks were generally under capitalized and lacked the experience and maturity to compete with the presidency banks, and the exchange banks. There was potential for many new banks as the economy was growing. Lord Curzon had observed then in the context of Indian banking: "In respect of banking it seems we are behind the times. We are like some old fashioned sailing ship, divided by solid wooden bulkheads into separate and cumbersome compartments." Under these circumstances, many Indians came forward to set up banks, and many banks were set up at that time, and a number of them set up around that time continued to survive and prosper even now like Bank of India and Corporation Bank, Indian Bank, Bank of Baroda Sdyndicate Bank and Canara Bank. During the Wars The period during the First World War (1914-1918) through the end of the Second World War (1939-1945), and two years thereafter until the independence of India were challenging for the Indian banking. The years of the First World War were turbulent, and it took toll of many banks which simply collapsed despite the Indian economy gaining indirect
PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARSâ€™ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY boost due to war-related economic activities. At least 94 banks in India failed during the years 1913 to 1918 as indicated in the following table:
No. of Banks Authorised capital (Rs. Paid up capital (Rs.
Post-independence The partition of India in 1947 had adversely impacted the economies of Punjab and West Bengal, and banking activities had remained paralyzed for months. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included: â€˘
In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it became an institution owned by the Government of India.
PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARSâ€™ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY •
In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India."
The Banking Regulation Act also provided that no new bank or branch of an existing bank may be opened without a licence from the RBI, and no two banks could have common directors.
However, despite these provisions, control and regulations, banks in India except the State Bank of India, continued to be owned and operated by private persons. This changed with the nationalization of major banks in India on 19th July, 1969.
Nationalisation The nationalization of 14 major banks with deposits of Rs. 50 crores or more in July 1969 was a “historic” and momentous event in the history of India. Small industrial and business units are continuously and consistently ignored and starved of funds, even though the Government policy was to encourage small, tiny and cottage and village industries. Agricultural credit was never seriously considered by banks. Public funds were used to support anti –social and illegal activities against the interest of the general public. It was for these reasons that the Government took over 14 top commercial banks in July 1969. In 1980 again the Government took over another 6 commercial banks –altogether there are 20 nationalized banks. These are in addition to the State Bank of India and its associate banks –commonly called the State Bank of India Group –which were taken over in 1955.
ORGANISATION STUDY Branch Expansion: Initially, the banks were conservative and opened branches mainly in metropolitan cities and other major cities. Branch expansion gained momentum after the nationalization of major commercial banks and the introduction of the Lead Bank Scheme. Table No. 01 shows the progress of branch expansion of commercial banks: Branch expansion of all commercial banks: Table No. 01. As on
Total No. of
June 30 1969
as % of the total. 22
bank office 63,800
Deposit Mobilization: Planned economic development, deficit financing and increase in currency issue have led to increase in bank deposits. At the same time, banks have contributed greatly to the development of banking habit among people through sustained publicity, extensive branch banking and relatively prompt service to the deposit mobilization, due partly to the expansion of a network of bank branches and partly to the incentives given to savers. The trend of increase in deposits and credit of scheduled banks is given in Table No. 02.
ORGANISATION STUDY Table No. 02. Year
No. of reporting
2000 -2001 297
2003 -2004 288
Since, 1950 -51 deposit mobilizations and supply of credit by banks were growing at a rapid rate particularly after bank nationalization in 1969. Growth of deposits in India of all scheduled commercial banks was as follows: 1951 -1971 (20 years) -700% or 7 times. 1971 -1991 (20 years) -3,260% or 32.6 times. 1991 -2004 (12 years) -780% or 7.8 times.
Liberalisation In the early 1990s the then Narasimha Rao government embarked on a policy of liberalisation and gave licences to a small number of private banks, which came to be known as New Generation tech-savvy banks, which included banks such as UTI Bank (the first of such new generation banks to be set up), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, kickstarted the banking sector in India, which has seen rapid growth with strong contribution from all
ORGANISATION STUDY the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been setup with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%,at present it has gone up to 49% with some restrictions. The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4% Lend at 6%;Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks.All this led to the retail boom in India. People not just demanded more from their banks but also received more.
Current scenario Currently (2007), overall, banking in India is considered as fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. Even in terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets-as compared to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility-without any stated exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector, the demand for banking PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARSâ€™ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY services-especially retail banking, mortgages and investment services are expected to be strong. M&As, takeovers, asset sales and much more action (as it is unravelling in China) will happen on this front in India. Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that is with the Government of India holding a stake), 29 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively. As far as the present scenario is concerned the banking industry in India is in a transition phase. The Public Sector Banks (PSBs), which are the foundation of the Indian Banking system account for more than 78 per cent of total banking industry assets. Unfortunately they are burdened with excessive Non Performing assets (NPAs), massive manpower and lack of modern technology. On the other hand the Private Sector Banks are witnessing immense progress. They are leaders in Internet banking, mobile banking, phone banking, ATMs. On the other hand the Public Sector Banks are still facing the problem of unhappy employees. There has been a decrease of 20 percent in the employee strength of the private sector in the wake of the Voluntary Retirement Schemes (VRS). As far as foreign banks are concerned they are likely to succeed in India. Indusland Bank was the first private bank to be set up in India. IDBI, ING Vyasa Bank, SBI Commercial and International Bank Ltd, Dhanalakshmi Bank Ltd, Karur Vysya Bank Ltd, Bank of Rajasthan Ltd etc are some Private Sector Banks. Banks from the Public Sector include Punjab PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARSâ€™ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY National bank, Vijaya Bank, UCO Bank, Oriental Bank, Allahabad Bank, Andhra Bank etc. ANZ Grindlays Bank, ABN-AMRO Bank, American Express Bank Ltd, Citibank etc are some foreign banks operating in India
Diagram: Shows the Banking Structure in India:
Reserve Bank of India (RBI)
Scheduled Commercial Banks
Regional Rural Banks in India
Public Sector Banks
Scheduled Co –operative Banks
Foreign Banks in India
SBI & Its Associates
Private Sector Banks
Old Private Banks
Scheduled Urban Cooperative Banks
Scheduled State Cooperative Banks
New Private Banks
Indian Banking Structure: The banking system in India can be broadly divided into three categories, viz. the central bank of the country known as the Reserve Bank of India (RBI), the commercial banks and the co –operative banks. The Reserve Bank of India is the supreme monetary and banking authority in the country and has the responsibility to control the banking system in the country. It keeps the reserves of all scheduled banks and hence is known as the “Reserve Bank”. Below figure shows the structure of Indian banking. Scheduled and Non –Scheduled Banks: Under the Reserve Bank of India Act, 1934, banks were classified as scheduled banks and non –scheduled banks. The scheduled banks are those which are entered in the Second Schedule of RBI Act, 1934. Such banks are those which have a paid –up capital and reserves of an aggregate value of not less than Rs. 5 lakhs and which satisfy RBI that their affairs are carried out in the interests of their depositors. All commercial banks –Indian and foreign, regional rural banks and State co –operative banks –are scheduled banks. Non –Scheduled banks are those which have not been include in the Second Schedule of RBI Act, 1934. At present, there are only three non –scheduled banks in the country. Scheduled banks are divided into Commercial Banks and Co –operative Banks. Commercial banks are based on profit, while co –operative banks are based on co –operative principle. Commercial banks have been in existence for many decades. They mobilize savings in urban areas and make them available to large and PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY small industrial and trading units mainly for working capital requirements. After 1969 commercial banks are broadly classified into nationalized or public sector banks and private sector banks. The State Bank of India and its Associates banks along with another 20 banks are the public sector banks. The private sector banks include a small number of Indian scheduled banks which have not been nationalized and branches of foreign banks operating in India –commonly known as foreign exchange banks. The Regional Rural Banks (RRB’s) came into existence since the middle of 1970s with the specific objective of providing credit and deposit facilities particularly to the small an marginal farmers, agricultural laborers and artisans and small entrepreneurs. The Regional Rural Banks have the responsibility to develop agriculture, trade, commerce and industry in the rural areas. The RRB’s are essentially commercial banks but their area of operation is limited to a district.
COMPANY PROFILE Brief History
Syndicate Bank was established in 1925 in Udupi, the abode of Lord Krishna in coastal Karnataka with a capital of Rs.8000/- by three visionaries - Sri Upendra Ananth Pai, a businessman, Sri Vaman Kudva, an engineer and Dr.T M A Pai, a physician - who shared a strong commitment to social welfare. Their objective was primarily to extend financial assistance to the local weavers who were crippled by a crisis in the handloom industry through mobilising small savings from the community. The bank collected as low as 2 annas daily at the doorsteps of the depositors through its Agents under its Pigmy Deposit Scheme started in 1928. This scheme is the Bank's brand equity today and the Bank collects around Rs. 2 crore per day under the scheme.
SYNDICATEBANK, HEAD OFFICE, MANIPAL
ORGANISATION STUDY The first branch of the bank started its operations in the year 1928 at Brahmavar in Dakshin Kannada District. By 1937, it had secured its membership as a clearing house at Mumbai. The primary objective of the business was to extended financial assistance to local weavers. Initially, the bank collected as low as two annas from the door steps of the depositors daily through its agents. This type of system wherein the agents of the bank come doorsteps to collect deposit is still prevailing in India and is referred to as the Pigmy Deposit Scheme. As time progressed, twenty banks merged with the Canara Industrial and Banking Syndicate Limited including the Maharastra Apex Bank Limited and Southern India Apex Bank Limited. The name of the bank was changed to Syndicate Bank Limited in the year 1964 and the head office of the bank was shifted to Manipal. The bank expanded its operations not only on the domestic front but also overseas. It took over Al Shabei Finance and Exchange Co. in Doha (1983) and Musandam Exchange Co. in Muscat (1984). By 1978, it opened its 1000th branch at Hauz Khas, Delhi. Currently it has over 2125 branches out of which 1523 are offering corebanking-e-banking
banking. Syndicate Bank sponsored the first regional rural bank in India by name Prathama Grameena Bank. The stocks of the Syndicate Bank are listed on Bombay Stock Exchange, National Stock Exchange, Mangalore Stock Exchange and Bangalore Stock Exchange. The progress of Syndicate Bank has been synonymous with the phase of progressive banking in India. Spanning over 80 years of pioneering expertise, the Bank has created for itself a solid customer base comprising customers of two or three generations. Being firmly rooted in rural India PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARSâ€™ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY and understanding the grassroot realities, the Bank’s perception had vision of future India. It has been propagating innovations in Banking and also has been receptive to new ideas, without however getting uprooted from its distinctive socio-economic and cultural ethos. Its philosophy of growth by mutual sustenance of both the Bank and the people has paid rich dividends. The Bank has been operating as a catalyst of development across the country with particular reference to the common man at the individual level and in rural/semi urban centers at the area level. The Bank is well equipped to meet the challenges of the 21st century in the areas of information technology, knowledge and competition. A comprehensive IT plan is being put in place and the skills and knowledge of the Bank’s personnel are being upgraded through a variety of training programmes to promote customer delight in every sphere of its activity. The Bank has launched an ambitious technology plan called Centralised Banking Solution (CBS) whereby 500 of our strategic branches with their ATMs are being networked nationwide over a 4 year period.
Nature Of Business Carried: Syndicate bank being a major public sector banks in India, is well known for its banking operations that is, it provides various services and products to the customers by means of ATM, Debit Card, Credit Card, Internet Banking as the services and Retail Credit Scheme, Personal Banking Loan Scheme, Deposit Schemes at CBS Branches, and Term Deposit Schemes as it products. Other than the banking operation it also provides Foreign Business, Mercantile Banking, Insurance Banking, General Banking, and Social Baking to the various customers in India as well as in abroad. PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
PRODUCTS AND SERVICES PROFILE (A). Retail Credit Scheme: 1. SyndVidhya –Education Loan. 2. SyndLaghuUdyami –Loans for Entrepreneurs. 3. SyndVypar –Loans for Traders. 4. Syndswarna –Loans on Gold. 5. SyndPigmy –Loans for Pigmy Depositors. 6. SyndRent –Loans against Rent receivables. 7. SyndUdyog –Loans for Entrepreneurs. 8. SyndSenior- Personal loan for pensioners 9. SyndVahan –For Purchase of Vehicles. 10.SyndSuvidha –For Purchase of Consumer Durables. 11.SyndKisan –Loan for agriculturist. 12.SyndSaral –Contigency Loans. a. For Salaried Class. b. For Non –Salaried Class. c. All Purpose Credit Schemes. 13.SyndVidyarthi-a stand by overdraft facility for students of professional courses
(B). Deposit Schemes at CBS Branches: 1. Premium Saving Account (sweep out, sweep in facility). 2. Special Premium Savings Accounts. 3. Syndicate Floating Rate Deposit Scheme. PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
(C). Term Deposit Schemes: 1. Fixed Deposit (FD). 2. Social Security Deposit (SSD). 3. Vikas Cash Certificate (VCC). 4. Cumulative Deposit. 5. Syndicate Suvidha Deposit. 6. Quick Money Deposit (QMD). 7. Kisan Pragathi Deposit. 8. Senior Citizen’s Security Deposit. 9. SyndSamanya
Services: 1. Tele –Banking. 2. Internet Banking. 3. “Any Branch Banking”. 4. Multi City Accounts. 5. Synd Bill Pay. 6. Online Collection of Direct Taxes. 7. Online Railway Ticket Booking. 8. Western Union Money Transfer.
Details of Products and Services (A). Retail Credit Scheme: (1). SyndVidhya –Education Loan: Purpose: Providing financial support to deserving /meritorious students for pursuing higher education in India and abroad. Eligibility: All students studying specified courses in India or abroad. Nature of facility: DL or OSL. Quantum:
For studying in India – maximum of Rs.7.5 Lac.
For studying abroad – maximum of Rs.15 Lac
Security: Up to Rs.4 Lac – guarantee of parent/guardian (third party guarantee not required).Above Rs.4 Lac- collateral security not less than 100% of loan amount with stipulated margin is required. Guarantor: Up to Rs.4 Lac-guarantee of parent/guardian-(third party guarantee not required). Above Rs.4 Lac-guarantee of parent/guardian and a suitable third party guarantee acceptable to the bank. Repayment Holiday: Course period plus 1 year or 6 months after getting job, whichever is earlier? Repayment period: Maximum of 5-7 years after completion of repayment holiday.
(2). SyndLaghuUdyami –Loans for Entrepreneurs: Purpose: To meet the credit requirement of small/medium entrepreneurs, traders, small business, and self-employers/professionals. Eligibility: Existing customers who satisfy certain criteria. Quantum of Loan: Maximum of Rs.5 Lac Guarantee: Suitable third parties guarantee acceptable to the bank. PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY Validity: Three years. Yearly review is to be done by the branch on the basis of ADV 85. In case of borrower seeks enhancements, and then regular proposal is to be obtained.
(3). SYNDVYAPAR- LOANS FOR TRADERS: Purpose: To meet the credit limit of all types of traders. Eligibility: All traders. Quantum of loan: Maximum of Rs.25 Lac. Security: Mortgage of property/pledge of NSC/ KVP/ LIC Policy etc. The stock in trade also is to be hypothecated. Guarantee: Third party not compulsory. The owner of the property should join the transaction as guarantor (If the property is not owned by the borrower). Margin: 15% to 40%, depending upon the security. Repayment: Renewal once in 2 years.
. SYNDSWARNA- LOANS ON GOLD:
Purpose: Jewel loans can be granted for all purposes coming under priority sectors as well as non –priority sectors. Eligibility: The borrower should be agriculturist if he is seeking loan for agriculture and allied purposes. Jewel loans to all others will be classified as non –priority sectors. Jewel loans shall be generally arranged to customers who are properly introduced to the bank and only through branches having the services of approved jewel appraisers. Security: Gold ornaments of 22-carat purity.
ORGANISATION STUDY Quantum of loan: Maximum loan available depends on income generation capacity or the gold value per gram declared from time to time. Repayment period: Maximum of 12-24 monthly installments along with interest.
(5). SYNDPIGMY- LOANS FOR PIGMY DEPOSITORS: Purpose: Any genuine credit requirements of PD to meet any contingencies. Eligibility: Pigmy depositors having PD account, must have completed 2 years with regular contribution. Loans can be sanctioned only at those branches where pigmy scheme is in operation. Quantum: 3 times the balance in Pigmy Deposit account or Rs.50000/-, whichever is less. Repayment: OD renewable on yearly basis. DL to be repaid in installment not exceeding 35 EMI’s. Rate of Interest: For loans /OD sanctioned /released up to: 31-03-03; -15% P.a. (fixed). For loans /OD sanctioned /released up to: 01-04-03; -14% P.a. (fixed).
RECEIVABLES: Purpose: Any genuine business /personal credit requirement excluding for speculative / prohibited purposes as per the credit policy guidelines in force.
ORGANISATION STUDY Eligibility: Bonafide owners of commercial or residential property, legally
institutions/companies. Quantum: Maximum of 75% of rent receivable (less TDS) by owner for whole or part lease period not exceeding 60 months.
(7). SYNDUDYOG- LOANS FOR ENTREPRENEURS: Purpose: Scheme for financing small and medium entrepreneurs. Target Group: Manufacturing units, trading units, Service entities. Eligibility: Credit requirement of the applicant party/unit shall not be more than Rs.50 Lac. The annual sales/revenue turnover of the applicant party/unit shall not be more than Rs.250 Lac. Nature of facility: Overdraft/loans, Bill limits, LCs / BGs offered in one package at competitive rates within a predetermined overall limit (not exceeding Rs.50 Lac).
(B). Personal Banking Loan Scheme: (1). SYNDVAHAN- VEHICLE LOANS Purpose: Loan to purchase new/old 4-wheeler and new 2-wheeler by individuals. Eligibility: Individuals having minimum annual income of Rs.50,000/for 2-wheeler, Rs.1,00,000/-p.a. for 4-wheeler.
ORGANISATION STUDY (2). SYNDSUVIDHA- CONSUMER DURABLE LOANS: Purpose: To purchase consumer durables like TV, Fridge, washing machine, other audio /video equipment computer including printer etc. Eligibility: Salaried / non-salaried class. Repayment: Not more than 60 equated monthly installments. Rate of Interest: (compounded monthly). Guarantee: Suitable third party.
(3). SYNDKISAN- LOANS FOR AGRICULTURISTS: Purpose: To meet any genuine credit requirements / to purchase consumer durables. Eligibility:
Agriculturists clean loans may be sanctioned to existing
customers only who have availed some facility with the bank and have mortgaged the property. Quantum: Demand loan: 50% of average gross annual income or Rs. 1 lacs, whichever is less, where proof of income from revenue authority is submitted. When proof is not available the manager must make the party’s assessment of income. In such event, quantum of loan is restricted to 50% of the gross annual income or Rs. 0.25 lacs, whichever is less. Repayment: Not exceeding 3 years. Guarantor: Suitable third parties guarantee acceptable to the bank.
(4). SYNDSARAL-CONTINGENCY LOANS: (a). Salaried Class: Purpose: To meet any genuine personal credit requirements. Nature of Facility: Demand loan and ODC (for top executives only). PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY Eligibility: Permanent employees of central / state governments /departments /reputed public sector undertakings / companies /firms having sound financial / teachers, professors, staff of schools and colleges and pensioners. Quantum: 12 months’ gross salary, subject to maximum of Rs.3 lacs where salary is not credited at the branch. Repayment: Not exceeding 60 EMIs. Rate of Interest: (compounded monthly). Loans –PLR / PTLR + 2.5% P.a. and ODC for top executives –PLR +3% P.A. Guarantor: Suitable third parties guarantee acceptable to the bank. (b).Non salaried class: Purpose: To meet any genuine personal credit requirements. Eligibility: Non –salaried persons such as Doctors, Engineers, Architecture, Lawyers, Consultants, Businessmen etc. Quantum: Subject to maximum of Rs. 5 lacks. (c). All Purpose: Purpose: To meet any genuine credit requirements. HOUSING LOAN The banks has under restriction that they have to lend 40% 0f the advances to priority sector advances consisting of : small route transport operation, small scale industries professionals or self employed, small business, retail trade, agriculture and export. Housing loan has become cheaper as compared to earlier years. This is because of stiff competition between the banks The banks are required to lend at their prime lending rate but they don’t lend at this rate, this is because the RBI has given some liberty to the nationalized banks in fixing their own interest rate. The PLR is based PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY upon the low cost deposits the bank have, they can grant loan at lesser interest. In India the default in housing loan is very meger, and people in India are also sentimentally attached to the house which they own/construct by them and repayment are generally regular. Banks have taken more interest to finance housing loans because:1. it is secured advance with sufficient margin 2. the advance up to 10 lack is treated as priority sector advances 3. the risk weight age s only 50% Moreover the interest up to 1.50 lack is considered as for tax exemption. The have also tie up arrangement with the developer for the construction of an apartment is treated as one account. Following is the common feature of most of all housing loan scheme of different nationalized banks like Syndicate bank(SYNDNIVAS), Vijaya bank(VIJAYA HOME LOAN) • Purpose: -Construction/purchase of existing/new house/flat/purchase of site for house construction. -For repairs/renovation/modification in existing house. • Eligibility: All salaried / self-employed / business persons / agriculturists / Pensioners with regular income. • Quantum of loan: The quantum of loan is fixed on the basis of total project cost less prescribed margin (25% or 30%) or 72 months gross salary in case of salaried class of borrowers
ORGANISATION STUDY • Rate of Interest: The borrower will have a choice of either fixed interest rate or Floating interest rate. Floating interest rate will be linked to PLR, i.e. as & when PLR is revised, interest rate will also stand revised. • Repayment: Flexible repayment period options are available. Equated monthly installments for repayments are devised to enable the borrowers to structure and planned the repayment of the loans. • Security: Mortgage of the property to be financed
Defferences between housing loans given by the Syndicate bank(SyndNivas) and Vijaya bank (Vijaya Home loan)
Point of differences
Vijaya Home Loan
For acquiring a new house or For purchase of old house existing house not more than /flat of age of 30 years and 25 years old below.
For salaried class, applicant should have completed 5 years of service and the remaining period of service left shall not be less than 5years
In case of salary income alone is considered for deciding the quantum of loan, such salaried persons should be in permanent service and not probationers: Persons nearing superannuation getting retirement benefits sufficient to cover the Loan applied can also be considered.
Minimum loan amount is Rs. 1.00 lakh Maximum â€“ Any amount on need based as per the cost less stipulated margin subject to loan entitlement. For salaried class, applicant In case of Repairs/Renovation should have completed 5 maximum is Rs. 10Lakhs
For Salaried persons : Maximum of 72 months gross salary (including salary of spouse)
years of service and the remaining period of service left shall not be less than 5 years.
25% of total project cost for construction/purchase of new flat or house up to 5 years old.
20% of the cost in general. The cost shall include Land cost, Stamp duty, Registration charges, 30% for acquiring house Fixtures like Ward Robes, Pelmets, Dressing Mirror, which is above 5 years old. Kitchen cabinets / racks, 30% of the estimated cost of Geysers etc. addition/extension/repairs/re novation
Rs.500/- per lac with a minimum of Rs.1000/- at present. (Processing charges are subject to change from time to time)
Up toRs.2 lakhs Rs. 112/ Above Rs. 2 lakhs to Rs. 1 Crore Rs. 112./- per lakhs or part thereof Above Rs1Crore Rs 11,224 for Rs. 1 Crore plus Rs. 140/per Rs. 1 Lakhs or part thereof
ORGANISATION STUDY Rate of interest Synd-Nivas Repayment Period Up to 5 years Over 5 years & upto 10 years Over 10 years & upto 20 years
Fixed rates (%) 11.50 12.00 Category abolished Over 20 years & upto 25 Category years abolished
Floating rates (%) BPLR-3.0 BPLR-2.50 BPLR-2.25 BPLR-2.00
Vijaya Home loan Period Up to 5 years Above 5 years to 10 years Above 10 to 15 years Beyond 15 years
Existing and for loans up to Rs.20.00 Lakhs Floating Fixed 9.25% 9.50% 9.75% 10.00%
Revised and for loans above Rs.20.00 Lakhs Floating Fixed 10.00% 10.75% 10.50% 11.25%
Findings • • •
As Housing loans comes under Priority sector lending, the feature of housing loan given by different nationalized banks are similar. These banks charging interest to their Housing loan products even less then their Prime Lending Rate When we compare the housing loans of two nationalised banks i.e. Syndicate bank and Vijaya bank we find lot of similarities in Purpose of lending, Eligibility, Quantum of loan, Security, Rate of interest, and Repayment is concerned. As for as difference is concerned The difference between these two policy is minor, like in case of renovation of house syndicate bank give loan only for the period 25 years where as Vijaya bank it is 30 years In case of eligibility of housing loan for salaried class of customer should complete at least 5 years of service But such restriction is not
there in case of vijaya bankIn simple Housing loans of Vijaya liberal as compared to Syndicate bank
C). Deposit Schemes at CBS Branches: (1). Premium Savings Account (Sweep in, Sweep out facility): Features: All persons associations etc., who are eligible to open SB accounts can open accounts under this scheme. Average monthly balance of Rs. 10,000/- to be maintained in the premium saving account. Balance available in the account in excess of Rs. 10,000/- on any day gets automatically swept out into a fixed deposit for 180 days in units of Rs. 1000/ No penalty is charged for breaking the fixed deposit prematurely. However, the amount swept in earns interest for the period run at the application rate.
(2). Special Premium Savings Accounts: Features: All persons associations etc., who are eligible to open SB accounts can open accounts under this scheme. Rs. 20,000/- maintained in “Special Premium Savings Account”.
ORGANISATION STUDY The balance available in the account in excess of Rs. 20,000/- on any day will be swept out into a fixed deposit in units of Rs. 1000/- for one year and one day. The interest rate applicable for the amount so swept in will be the rate applicable for the period for which it was held in the term deposit account. No penalty is charged for breading the FD prematurely. Rs. 100/- per month is levied as service charges whenever the monthly average balance in the special saving account goes below Rs. 20,000/-.
(3). Syndicate Floating Rate Deposit Scheme: The scheme has been launched from 01 -01-2003 and the deposits are accepted at Syndicate e-banking branches.
Features: (a). Amount of deposit: Minimum deposit acceptable under this scheme is fixed at Rs. 100/- lacs and in multiples of Rs. 1/- lac. (b). Period of deposit: one year.
D). Term Deposit Scheme: (1). Fixed Deposit (FD): Amount of deposit: Opened with minimum of Rs. 50/- and above. FD can be opened with minimum of Rs. 1000/-. Period of deposit: Minimum period of 15 days and maximum of 120 months. Branches are permitted to accept bulk deposits of Rs. 25 lacs and above up to Rs. 100 lacs for a period of 7 -14 days. FD’s can also be accepted for any period in multiples of complete months or for incomplete months like 13 months and 12 days etc. Where a court directs the bank to do so, the branch may accept the deposits for any period beyond 120 months and also for any amount even if it is less than Rs. 50/-. Options regarding payment of interest: In case of FD for 6 months and below, the interest is payable on maturity. In other cases, the depositors is having the option of claiming interest on quarterly or half yearly rests. Monthly interest can be availed at discounted rates. Other features: Nomination facility is available. Premature closure is permitted to subject to penalty norms.
(2). Social Security Deposit (SSD): Amount of deposit: A SSD account may be opened with a minimum of Rs. 1000/- and in multiples of Rs. 100/PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY Period of deposit: SSD can be opened for a minimum period of one year. SSD’s are opened only in completed quarters subject to a maximum of ten years. Payment of Interest: The depositor is free to opt, any one of the following regarding the payment of interest. Monthly Interest: Interest is paid at the end of every calendar month at discounted value. Quarterly Interest: Simple interest accruing at the end of each quarter will be paid. Calculation of Interest: Monthly Interest at Discount rate =
Amount of deposit X Rate of
interest (1200 + Rate of interest) Ex: At 12% for Rs. 10,000/- discounted monthly interest is: (10,000 X 12) / 1212 =99.01. Branches refer Master Charts on interest rates for payment of interest at discounted rates.
(3). Vikas Cash Certificate: The amount accepted under this scheme grows constantly with interest compounded on quarterly basis and the accrued interest will be paid along with the principal amount of the deposit on maturity. Amount of deposit: Amount in multiples of Rs. 100/- is accepted. Period of deposit: Deposit will be accepted for a minimum period of 6 months and in completed quarter beyond 6 months subject to maximum of 120 month. Deposits can also be accepted for odd periods like one year one day, two year one day etc. PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY Payment of Interest: Interest on the amount of deposit is compounded at quarterly rests and paid along with principal on maturity. The maturity value for different periods are given in the tables supplied in this regard. Deduction of Tax at source on cash certificate: Branches shall affix a seal on the cash certificate mentioning “Maturity value is subject to provision of tax laws”. There is no breach of contract here, as it is the land which has altered the contractual terms.
4). Cumulative Deposit: In this scheme, deposits into the account are made in monthly installments for a stipulated period on expiry of this period; the total amount of installments deposited is rapid with interest compounded on quarterly basis. Amount of deposit: Uniform monthly installments of Rs. 10/- or in multiples thereof. However, with effect from 01 -04 -03 the minimum monthly installments stands revised to Rs. 100/- and thereafter in multiples of Rs. 10/-. Period of deposit: Minimum period of 12 months and maximum of 120 months in completed quarters.
(5). Syndicate Suvidha Deposit: A special deposit scheme, under which, the depositor can withdraw a part of the fixed amount at times of need. Amount of deposit: Rs. 10,000/- and above in multiples of Rs. 1000/-. Period of deposit: Minimum of 15 days and maximum of 120 months.
ORGANISATION STUDY Rate of Interest: As applicable to the term deposits at the time of opening the deposit account. Interest payment: Simple interest is payable at quarterly intervals at the contracted rate. For all the accounts opened prior to 27 -01 -1998, interest is payable at half yearly intervals. Partial Withdrawal: The depositor is at liberty to withdraw partially in multiples of Rs. 1000/-. There is no restriction regarding frequency and number of withdrawals. Withdrawals are recorded in the deposit ledger and also on the deposit receipt. No penalty is charged on partial withdrawals (w.e.f. 01 -11 -1998). Nomination facility is available. TDS norms are applicable.
(6). Quick Money Deposit: This is a term deposit scheme with overdraft facility which ensures availability of funds to the account holder without necessitating another visit to the branch. Amount of deposit: Rs. 25,000/- and above in multiples of Rs. 1000/-. Period of deposit: Minimum of one year and maximum of five years deposits can be accepted for incomplete quarters also. Interest Rate: As applicable for term deposits, compounded quarterly. For incompleted quarters, interest shall be calculated on the basis of 365 days a year.
ORGANISATION STUDY (7). Kisan Pragathi Deposit: Kisan Pragathi Deposit is a credit linked savings cum term deposit scheme designed for agricultural clientele. These deposits can be opened by any agriculturist solely or jointly with his wards. Interest: Rate of interest shall be 1% less than domestic term deposit rates. Interest is calculated on monthly product basis. Other Terms: TDS norms are applicable. Nomination facility is available and credit facility.
(8). Senior Citizen’s Security Deposit: This deposit scheme with value added features was introduced by the bank for the benefits of senior citizen’s who are of above the age of 60 years including retired employees of the bank, valid proof of age to be produced by the depositor. Amount of Interest: Minimum of 1,000/- and in multiples of Rs. 1000/-. Period of deposit: Minimum of 12 months and maximum of 120 months. Rate of Interest: Higher rate of 0.50% over the normal rates applicable to domestic term deposits. Interest is payable monthly (at discounted rate) or quarterly as desired by the depositors. Loans on deposits: Available up to 75% of the deposit amount. Other Features: Nomination facility is available. TDS norms are applicable. PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY Services: (1). Tele –Banking: Round the clock access regarding account details, balance enquiries, transfer of funds can be made from one account to another and utility bills like electricity, telephone, etc., can also be paid. (2). Internet Banking: The bank is accessible from your home, office or while you are traveling. A login password and transaction password has to be obtained, with these passwords you can login and (a). View account transactions. (b). Effect transfer of funds. (c). Open a Term Deposit. (d). Place requests for issue of Cheque books, demand drafts, etc. (3). Any Branch Banking: Banking is no longer restricted to the physical boundaries of your Branch premises. You can (a). Get cash payment of your Cheque up to a limit in any other CBS Branches. (b). Get collection of your cheques. (c). Purchase DDs, MTs, etc. or get online transfer of funds. (4). Multi City Accounts: These are accounts which can be operated in various CBS centers. You can opt for one of the five variant of the accounts depending on the minimum average balance. (a). Synd –Silver –Current Accounts. (b). Synd –Gold –Current Accounts. (c). Synd –Platinum –Current Accounts. (d). Multi –City –Corporate with sweep –in and sweep –out facility from OD account to current account.
ORGANISATION STUDY These Multi –City Cheques can be debited at any of our CBS network branches. Other transactions like purchasing DDs, fund transfer, etc. could be done for reasonable charges. (5). Synd Bill Pay: A hassle free utility payment product wherein utility bills can be paid directly by the bank. The modes of payment by registering with the Bank –all for no charges. (a). Autopay –where the Bank pays the bill on due date. (b). Online pay –where you can view the bills that are due and authorize payment online. (6). Online Collection of Direct Taxes: Our Bank collects Central Board Direct Taxes from the customer at the selected branches identified for this purpose. (7). Online Railway Ticket Booking: The bank has joined hands with Indian Railway Catering & Tourism Corporation Ltd. (IRCTC) to offer online booking of railway tickets for all Internet –banking (Syndinet) Customers of their bank. This facility is offered to the customers absolutely free of cost. (8). Western Union Money Transfer: The bank has signed MoU with M/s Kuoni Travel (India) Pvt. Ltd. Agent for M/s Western Union Network (Ireland) Ltd to make payments of Western Union Money Transfer remitted by NRIs from foreign countries.
ORGANISATION STUDY Area of Operation –Global / National / Regional: Syndicate bank is a major public sector bank –serves over 19millon Clinteles through 2125 branches spread over 20 states and four union territories with a branch at London and a workforce of 28000. The global business of the bank exceeds 131473 crores. It is known for mass banking through its innovative schemes ranging in scope from small savings and social lending to corporate finance and foreign business. Particulars Global business Global Deposits Global Advance Net Profit Net Interest Income Branches CBS Branches ATM’s Clientele Networth
Rs. In crores 131473 78634 52839 716 2150
Growth in % 44.03 46.64 40.31 33.47 14.31
2125 1508 701 19 million Rs 3623 crores
ORGANISATION STUDY Ownership Pattern: Syndicate Bank is a Govt. of India undertaking. This has more than 66% of share capital Sl. Category No. A Promoter’s Holding 1 Promoters Government of India Foreign Promoters 2 Persons acting in concert
No. of Shares % of share held holding.
Sub Total B
Non –Promoter Holding
Institutional Investor (a). Mutual Funds and UTI (b). Banks, Financial Institutions, Insurance Companies (Central / State Govt. Institutions / Non –government Institutions). (c). FII’s. Sub Total Others (a). Private Corporate Bodies (b). Indian Public (c). NRIs / OCBs (d). Any Others Sub Total
346968282 NIL NIL 3469568282
5952793 71425784 1136130 839826 79354533
1.14 13.68 0.22 0.16 15.20
Competitors Information: For any industries there are number of competitors who themselves try to emerge with innovative products and services, to compete with other industries. They provide products and services in order to satisfy the customers, which are economy to their purchasing habits. Likewise PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY Syndicate Bank is also having its competitors like all Public Sectors Banks in India, and Private Sectors Banks, Foreign Banks etc. The main competitors of Syndicate Bank are SBI and its Associates, Punjab National Bank, Canara Bank, Corporation Bank, Unit Trust of India (UTI), Indian Overseas Bank etc. Private sector banks like ICICI, IDBI, Centurian bank also give competition. Infrastructural Facilities: Syndicate bank has following infrastructure facilities 1. CBS Branches 2. ATM’s 3. Total Branch Mechanization(TBM’s) 4. Video Conferencing in HO, RO, CO, 5. Internet facility 6. Data warehousing and mining 7. Real Time Gross Settlement(RTGS) in CBS branches 8. Foreign exchange business 9. Treasury and Investment 10.Credit and Debit card 11.Security arrangement 12.Close circuit TV and Time clock facility 13.communication facility with cash van during cash remittance 14.Installation of Hotline with currency chest 15.Strong and safe room for currency chest 16.Burglar alarm system in all branch 17.Automatic fire alarm system in all CBS branches 18.Fire proof cabinet in all CBS branches Note counting machine
ORGANISATION STUDY Note sorting machine 45 Note banding machine 300 Desktop ultraviolet 2070 lamp Hand ultraviolet lamp
Achievement / Awards won by the Bank over the years: 1972 –INDIAN MERCHANTS CHAMBER Award for outstanding contribution towards welfare of community. 1974 –INDIAN MERCHANTS CHAMBER Award for outstanding contribution in promotion of savings. 1975 –CERTIFICATE OF MERIT for Bank's house journal "GIANT". 1976 –INTERNATIONAL AWARD by JAYCEE international for outstanding contribution to the cause of the JAYCEE movement. 1977 –ASSOCHAM AWARD for promotion of rural and agricultural activities of Syndicate Agriculture Foundation sponsored by the bank. 1978 –INDIAN MERCHANTS CHAMBER AWARD for outstanding contribution towards welfare of the community. 1981 –NATIONAL INVESTMENT AND FINANCE AWARD for Priority Sector lending. 1990 –CHAUDHARI CHARAN SINGH MEMORIAL NATIONAL AWARD for Rural Development.
ORGANISATION STUDY 1999 –FICCI AWARD for institutional initiative in the field of "Rural Development" to RUDSETI jointly sponsored by Syndicate Bank. 2001 –Banking Technology Award for innovative use of Banking Applications on INFINET awarded by IDRBT, Hyderabad. 2003 –Banking Technology Award awarded by IDRBT, Hyderabad for the year 2003. 2006- Institute for Development and Research in Banking Technology (IDRBT), established by Reserve Bank of India has conferred Syndicate Bank, “Special Award for Use of IT for Customer Service in Semi-Urban and Rural Areas”. The award was given to Shri C P Swarnkar, Chairman & Managing Director, Syndicate Bank by Dr Y.V. Reddy, Hon’ble Governor, Reserve Bank of India on Sept. 02, 2006 at Hyderabad.
ORGANISATION STUDY WORK FLOW MODEL ADVANCES Interview with manager
Know your customer
Evaluation of project
Sanction of loan
Transfer to his S/B accounts Repayment of interest
Diagram No.1 This is the work flow model followed by the bank at the time of giving advances to their customers. Which involves the following series of steps, they are: Interview with the manager: Any party requiring funds through bank first has to talk with the respective manager of a branch of his area. One thing the manager has to see that the amount of loan he has to sanction is in his power/ limit or else he has to concern his higher authority. In this stage the process of PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARSâ€™ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY negotiation regarding rate of interest between party and banker takes place. Know your customer: The important duty of a manager is to know his customer there are many systematical techniques and process to know the real identification of the customers. This is done mainly to avoid anti-laundering. Evaluation of project The purpose of loan to be sanctioned should be clearly understood either by evaluating blue print of his project or balance sheet or performance proof of his existing business. This is mainly done to make sure that repayment of the amount is ensured and party wonâ€™t become bankrupt. In case of personal loan evaluation of the person is done through other person who is known to the banker. Sanctioning Sanctioning is not actual giving of loan that is the amount to be paid is promised .the party in need of it is capable of withdrawing the amount not more then the amount sanctioned to him. Documentation: The documentation deals with filling of forms that are in contractual form and most of the documentation process could be seen in all the stage. It also deals with submission of security for their loan and its formalities. Transfer to his account: The party which is borrowing loan from bank need to have an account in that bank, if not the banker will create an account for this purpose. And PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARSâ€™ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY most of time the loan amount is transferred to his account and rarely they give it in their hand, either in their hand, either in the form of DD, Cheque or cash it depends upon the banker and the party . Repayment: After the purpose of the loan is served, the party is obliged to repay the amount incorporating PLR and other bank charges or according to the agreement
DEPOSITS Customer approaching the bank/ Enquiry
Diagram No. 2 Saving, Fixed, current & Recurring A/C
A/C Holder facilities
Account of the customer
Account of the customer
ORGANISATION STUDY This is the work flow adopted by the bank at the time of receiving the deposits from their customers. The first step in this process is customer approaching the bank. When the customers will have surplus money with them, they will be looking to invest that money in some place where they can get good returns out of it. Bank is one such place which accepts deposits from their customers and pays interest on them. So the customers will be looking for that bank which will pay them highest rate of interest on their deposits. Once the customer identifies the bank where he is going to deposit his amount, he has to go through the introduction stage, were the customer needs to be introduced to the bank.
He may be introduced to the bank by the
customer or an employee of this bank. He is asked for providing documents like Ration card or any license for address, age & income proof. Once the account is opened (i.e. Either S.B a/c, fixed deposits, recurring deposits or current a/c) he/she will provide with facilities like Cheque book, ATM or O.D if it’s a current a/c. Once the customer opens an account in the bank he can deposit any amount any number of times but in case of fixed deposit its one lump some amount deposited till its maturity it is not withdrawn. When amount is deposited it goes to the hands of cashier and then to cash supervisor and then to his account, but now due to CBS in a minute we give to cashier its transferred to customers a/c. The depositors are eligible to withdraw the amount which is credited in their account and not more than that unless it is current account. Depositors can withdraw as an when they need but in case of fixed deposits prior 7 days notice to be given but today’s banker will not ask for any notice just give it in the spot with penalty. The process of withdrawal is reverse of depositing where from his account it goes to cash supervisor from him to cashier finally to the hands of customer, again traditional work flow. Now all are computerized where in one person PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY does all the activity. Customer can directly withdraw in ATMs or can directly issue Cheques to the other party.
Future Growth and Prospectus: Banks domestic credit expansion during the fiscal at 32.47% was far better than the industry average. We would like to repeat the performance under credit font in the current financial year. Bank has done extremely well in expanding its agricultural credit base. The y-o-y increase was 51.89%. We would give some importance to increasing Agriculture portfolio of the bank in the current year. Similarly the bank is putting its strategy in place to increase its portfolio under SME’s, Mid corporate, SSIs, Retail business and consumer credit. Under resource mobilization point their focus is to shed high cost bulk deposits and to rely more on low cost deposits. Interest area being strengthening SB component of the deposits. Bank also has an ambitious plan to reduce its low yielding excess SLR portfolio and to invest it in quality high yielding advances. Bank has evolved many strategies to improve its bottom line in the current fiscal. Bank has received permission from RBI to set up rural development venture capital funds to asset Agriculture Business, Processed Foods, Biotech, Information technology and non-conventional energy in rural areas. Bank is also planning to enter BPO business to utilize excess man hours and expertise available in the bank. Reserve bank’s permission is awaited for this venture. PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
MCKINSEY’S 7S FRAMEWORK Introduction: The Seven –S model was developed by McKinsey’s is an important part of the organization. The two persons who developed this model were Tom Peters and Robert Waterman, who were consultants at the McKinsey’s. They had published their 7S models in their respective articles named, “The Art of Japanese Management (1981)” and “In Search of Excellence (1982)”. McKinsey’s & Co’s 7S framework provides a useful framework for analyzing the strategic attributes of an organization. The model starts on the premises that each and every organization is not just a structure as it consists of seven important elements. Strategy, Structure and Systems can be considered as “Hardware” of success while Style, Staff, Skills and Shared Values are considered as the “Software”. Companies, in which these soft elements are present, are usually more successful at the implantation of the strategy. The McKensy’s framework is shown in the figure.
Soft Ss: The four Ss across the button of the model are less tangible, more cultural in nature and were termed as Soft Ss by McKinsey. 1). Skills: The capabilities and competencies that exist within the company are termed as skills. 2). Shared Values: The values and beliefs of the company. Ultimately they guide employees towards “Valued Behavior”. 3). Staff: The company’s people resources and how they are developed, trained and motivated. PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY 4). Style:
The leadership approach of top management and the
company’s overall operating approach.
Hard Ss: The three Ss across the top of the model are described as “Hard Ss”. The 3Ss across the top of the model are described as “Hard Ss”. 5). Strategy: The direction and scope of the company over the long term is known as strategy. 6). Structure: The basic organization of the company, its departments reporting lines, areas of expertise and responsibility (and how they inter – relate). 7). Systems: These are formal and informal procedures that govern everyday activity, covering everything from management information systems, through the systems at the point of contact with the customer (retail systems, call center systems, online systems, etc.).
Diagram Showing pictorial diagram of McKinsey’s 7’S Model;
7S Model of Syndicate Bank (1). Structure: The bank has a well organized three tier structure with a sound foundation of 2113 business outlets and a well defined reporting architecture as the body to support. The corporate governance which is the breath sustaining the momentum is through a very talented board of directors including government appointed directors employee and office representative directors guided by RBI, Ministry of Finance, Government of India which forms the superstructure. Below figure shows the details structure of the Syndicate Bank.
ORGANISATIONAL STRUCTURE BOARD OF DIRECTORS CHAIRMAN & MANAGING DIRECTOR EXECUTIVE DIRECTOR
GENERAL MANAGERS Portfolios 1. Corporate Credit Division – I (CCD-I) 9. Priority Sector Credit Dept 2. Corporate Credit Division – II (CCD-II) 10. Premises & Maintenance Dept 3. Retail Banking Department 11. Central Accounts & Legal Dept 4. Planning & Development Dept 12. Personnel Department 5. Recoveries Dept & General Admn Unit 13. Inspection Department 6. Dept. of Information Technology 14. Vigilance Department 7. Risk Management & Monitoring Dept. 8. Treasury & International Banking Division
Regional Offices - 35 Branches – 2125
ORGANISATION STUDY Board of Directors: Chairman & Managing Director –Shri C. P. Swarnkar. Executive Director –Shri George Joseph. Directors: Shri M. Deena Dayalan.
Shri M Bhaskar Rao.
Shri K. Seetharamu
Shri Kawaljit Singh
Shri A R Nagappan.
Shri Dinkar S Punja.
Shri Bhupindar Singh Suri..
Shri Vinay Kumar Sorake.
Shri Suresh Kumar Rastage
And having 21 General Manager heading different departments in the organization
Board of Directors
Chairman & Managing Director
Executive Director Scale VIII
Deputy General Manager
Assistant General Manager
Assistant Manager PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY 2). Skills: The blend of management skills with employee orientation and employee skills with organizational loyalty is unique to Syndicate Bank. Having introduced successfully the Core Banking Solution (CBS) with an entire in house team of I.T. and Non –I.T. officers itself is a proof and track record for the skills of the prudent banker with the focus of migration of another 1500 branches to the CBS is a big leap in this direction. Training policies and programmes are suitably designed, modified and updated on a continuous basis to upgrade the knowledge levels and skills of its Executives, Officers, and Workmen on par with the best in the industry. While several new programmes are introduced in tune with the Corporate Goals, the existing programmes are made more interactive and learner –friendly. Risk Management and Basel II are the focal areas of their training programmes to ensure Bank’s readliness to move over to the new Basel II regime and extra care is taken to sensitize the workforce to these issues. The bank has taken its first step in e –learning initiative with the uploading of reading materials on Export Finance, Agricultural Lending and Financing SSI on its Intranet. During the year, emphasis was given to train executives / officers in the areas of Risk Management, Risk Based Supervision, Basel II, Agricultural Lending, Credit Management, Corporate & Retail Credit, Recovery Management, Marketing & Relationship Banking, Foreign Exchange business and CBS.
(3). Style: The conduct of the operations as well as administration at each operational unit having effective internal control has a vivid style by PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY itself. Every branch manager has his own style of functioning individually but collectively is a syndicate team member, which is the brand equity of the bank. The style of the bank in business or in administration has a unique niche in the industry, poised to excel among the peers. Decision making style( powers of disposal):
Desk Manager (Scale II/ III)
Asst. General Manager
CM or AGM
Desk Manager (Scale II/ III)
Desk Manager (Scale II/ III)
CM or AGM
Desk Manager (Scale II/ III)
Being one of the leading public sector banks with a culture of well managed private sector professional institution, the strategy of the bank is to be a premier among the peers and to excel in all the parameters are it business or social responsibilities. To be the faithful and friendly financial partner to their beloved clients. The strategy also includes concern for the middle class and the moderate income group of the society for financial inclusions. Evolving a product called “Synd Samanya”, with zero balance in rural and semi –urban areas and ensuring 100% coverage at all lead districts the goal under the financial inclusion which is being met. Thus, all the products and services are targeted towards the above focus including the core banking and internet banking
ORGANISATION STUDY etc. which are introduced at a very nominal minimum balance and no hidden charges.
Strategies for 2007-08 Corporate theme for the year- “Acquire Accounts Aggressively, Add Core Deposits Continuously” Year also marked as-Year of NPA resolution
(5). System: The systems and procedures of the bank are a time tested one on sound and scientific foundation. The systems and procedures are well defined and are available with all the hierarchy as no need to know basis. The recently developed best practice codes and the best behavioral practices are the guiding factors of the systems prevailing. The well structured process manuals are available for all the functional areas, be it business or administration or inspection and audit.
(6). Staff: The staff composition is so mixed and having experience and loyalty to the institution as the core credentials reflecting the customer’s loyalty and ethics. The bank has ventured into a recruitment drive at all levels to ensure the mix of experience and youth at appropriate level and also to ensure the age profiles of the cadres match with technological advancement. An ongoing annual promotional process to ensure blending of experience and expertise to be brought to the fore. A balanced team of executives guide the operations. The bank had a total staff strength of 28000 as on 31 -03 -2007.where as the strength of Udupi is 85. And per employee productivity on that date is
ORGANISATION STUDY 4.98crores. The SC /ST Employees constituted 26.23% of the total staff strength. The HR Policy has been geared to meet the Corporate objective of accelerated and profitable growth. This includes Campus and Direct Recruitments for replenishing skilled Man Power in Agricultural Finance, IT, Accounts and Financial Management, International Business, Credit, Marketing, Risk Management etc. The Promotion Policy has also been fine tuned to reward Outstanding Performance and also to facilitate Succession Planning.
(7). Shared Values: The core of above 6Ss is the ground rules of shared values. It is like the invisible software which works on the above 6S as the hardware and makes the institution work to the desired level of output.
Vision, Mission and Quality Policy: Vision (2006 -2010): “Consolidating position as a Premier Public Sector Bank with Increased Global Outreach”. “Emerging as a Strong, Vibrant Responsive Competitive Bank”. “Embracing state of art technology harnessing human potential and effectively participating in the process of Nation Building”. Serving its constituents and stakeholders as a “Faithful and Friendly Financial Partner”.
ORGANISATION STUDY Mission of Syndicate Bank: The Mission articulated for each of the functional area of the Bank is highlighted below:
Resources: To achieve global deposits of Rs.50 thousand crore by 2006 and around Rs.59 thousand crore by 2007 with emphasis on low cost resources slated to constitute at least 45% of the total resources by planned strategic initiatives including branch expansion, aggressive marketing and active involvement of each and every employee of the Bank.
Advances: To build a qualitative asset base of around Rs.35 thousand crore by 2006 and Rs.41 thousand crore by 2007 to augment the income portfolio of the Bank.
Business: To achieve global business of nearly Rs.85 thousand crore by March 2006 and attain Rs.100 thousand crore by 2007.
Profitability: To make every branch a profit centre to earn a net profit of Rs. One thousand crore by 2007and guarantee best possible returns to the stakeholders value.
Management of Assets: To focus on improving the quality of asset portfolio by avoiding slippage of assets to NPA and to strive to upgrade the existing non-performing assets to performing assets.
Human Resources & Organization structure: To mould and strengthen the organizational structure to meet the future Business requirements and challenges. To redefine and redevelop peoples’ management techniques so as to unleash human potential, drive growth and nurture leadership of high quality corporate governance.
marketing strategies to meet the ever-growing market demands, to PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY ensure that our products and services adapt to the changing needs and expectations of the customer, to provide the customer the ideal banking ambience, to reorient our publicity so as to provide increasing visibility to our Brand, to get our branches / offices ISO 9001-2000 compliant.
Risk Management: To become Basel II compliant under all facets of Risk Management and transform the Bank into total risk enabled enterprises, which addresses the concerns of every stakeholder by 2008.
Information Technology: To bring minimum of 80% of the Bank’s business under Centralized Core Banking network by 2008 spanning minimum of 700 branches across the country, supplemented by additional delivery channels with 750 ATMs and 750 fully automated branches, backed by a comprehensive fail safe Business Continuity Plan.
Forex and Treasury: To profitably manage the forex and investment assets of the Bank to achieve a dealing room turnover of Rs. 565 thousand crore by March 2008 and a net profit of nearly Rs.100 crore.
Para Banking: To achieve insurance premium collection of nearly Rs.200 crore with a commission income of Rs.35 crore, a credit card base of 2 lakh that brings in earnings of a minimum of Rs.15 crore and a debit card base of 15 lakh fetching a net revenue of Rs.20 crore.
Inspection: To migrate
progressively from the present
transaction oriented inspection system to a risk based audit exercise
ORGANISATION STUDY enhancing the effectiveness of risk management, control and governance processes.
SWOT ANALYSIS SWOT Analysis refers to the strength and weakness of the company and opportunities and threats in the environment. The investor should carry out a SWOT analysis for the chosen industry. Take for instance, increase in demand for the industryâ€™s product becomes its strength, presence of numerous players in the market, i.e. competition becomes the threat to a particular industry. The progress in the research and development in that particular industry is an opportunity and entry of multinationals in the industry becomes the threat to that industry. A SWOT Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture or in any other situation requiring a decision. The required first step in SWOT analysis is the definition of the desired end state or objective. The definition of objective must be explicit and approved by all participants in the process. This first step must be performed carefully because failure to identify correctly the end state aimed for leads to wasted resources and possibly failure of the enterprise. Once the objective has been identified, SWOTs are discovered and listed. SWOTs are defined precisely as follows:
ORGANISATION STUDY Strengths: Are attributes of the organization that are helpful to the achievement of the objective. Weaknesses: Are attributes of the organization that are harmful to the achievement of the objective. Opportunities: Are external conditions that are helpful to the achievement of the objective. Threats: Are external conditions that are harmful to the achievement of the objective Strength of Syndicate Bank: The Bank has a good image in the eyes of the general public. Syndicate bank provides financial assistance to various sectors like Agriculture, SSI, SME etc. As a part of its innovative strategies in product development process, bank has constantly reviewed and redefined many of its products to meet the ever –changing needs and expectations of the customers. Like Synd-Samanya, Synd-Vidhyarthi The security arrangements in the bank are carried out satisfactorily. To achieve quantitative improvements in key areas of security, the Annual Security Action Plan had been effectively implemented. The bank has an effective and transparent system of Corporate Governance driven by a highly professional Board which strives to adopt the best business practices that can enable the Institution to retain the competitive edge through innovation and world class standards of delivery of contemporary services and products. In this context, the bank has placed systems in place for risk assessment
monitoring. The bank has been proactive in conforming to the requirements of the Regulatory Authorities. PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY It is well equipped to meet the challenges of 21 st century, in the areas of IT, Knowledge and competition. It has launched Centralized Banking Solution (CBS) which covers 75% of the total business. Weakness of Syndicate Bank: •
The bank has implemented Core Banking Solution (CBS) by networking 1529 branches spread across over 2120 Branches covering over 75% of the Bank’s business, which need to cover all the branches so as to cover 100% of the bank’s business.
IT Policy and Strategy implementation by the bank has not been covered to all the branches. Some of the facilities provided by the Syndicate Bank like ATM, Credit Card, Debit Card are with in a particular geographic area, which need to be expanded.
The bank has only a single branch at London; more number of branches must be developed, not only in India but also abroad.
The large portion of their existing employees in the edge of retirement, this may create a problem in the future.
Opportunity for Syndicate Bank: The Central Banking Solution (CBS) has to be implemented in every branch, so as to improve its business activity. More opportunity is there for the bank if it implements all its branches totally with computerized and the business may spread across the world if it diversifies some of the branches in various countries. The bank continues to identify new areas and activities that require attention, as well as the risk management skills, processes, and practices that need to be developed and strengthened.
ORGANISATION STUDY The bank is planning to adopt best international practices in Credit Risk Management and Basel II implementation by outsourcing end to end solution viz., on –line appraisal system, risk assessment, risk inputs estimates, capital computation and RAROC framework. The Bank is also in process of engaging reputed consultant to design and implement Operational Risk Management Framework. Threats for Syndicate Bank: In this technological and fast growing world the greatest threat for the bank is to compete with other public sector banks, private banks and also foreign banks. Syndicate bank has to prove that it’s unique in providing various products and services to its customers. This is possible by continuous improvement and adopting technological advancements. Government policies may go strict. More and more government policies make the company follow the rules which ultimately affect the company revenues. Intense competition in the market. Market share redistribution. Market place is becoming smarter. Conclusion: It is not simply enough to identify the strengths, weaknesses, opportunities, and threats of a company. In applying the SWOT analysis it is necessary to minimize or avoid both weaknesses and threats. Weaknesses should be looked at in order to convert them into strengths. Likewise, threats should be converted into opportunities. Lastly, strengths and opportunities should be matched to optimize the potential of a firm. Applying SWOT in this fashion can obtain leverage for a company.
ANALYSIS OF FINANCIAL PERFORMANCE Financial Analysis of syndicate Bank for the year ending 2007 Syndicate Bank, which has a balance sheet size of Rs.900 billion, is among the ten largest state-owned banks in India in terms of asset size. The bank operates through a network of 2,126 domestic branches and one international branch. It has a dominant presence in the southern region, which houses 58% of its branches. The bank made its first public offer in 1999, when it offered 125 million equity shares at par and raised Rs1.25 billion. It raised further capital of Rs2.5 billion in July 2005, by offering 50 million shares at a premium of Rs40 per share. As a result, the government's stake has reduced to 66.5%. Recent developments • Syndicate Bank has revised its benchmark prime-lending rate (PLR) from 12.25% to 13% in April 2007. • Balance sheet growth remains strong • Margins decline YoY but expand QoQ • Treasury profits flat; other income up 10% in FY07 PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY • Asset quality improves, with net NPAs down to 0.76% • Tier-I CAR down to 6.2%; bank would need capital in FY08
ORGANISATION STUDY Analysis of Bank’s annual report 2006-07 Syndicate Bank is progressing well under all parameters, Global Business: Global business Domestic business
2006 Rs.105143 crores Rs.96212 crores
2007 Rs.132526 crores Rs.123095 crores
• The Global Business of the bank as on 30th June 2007 grew by 26.04% and stood at Rs.132526 crores as against Rs.105143 crores as on 30th June 2006. The bank has strategically opted for moderate growth during the current fiscal. • Domestic business as on 30th June 2007 increased to Rs.123095 crores from Rs.96212 crores as on 30th June 2006, registering a growth of 27.94%.
Deposits: Total deposits Domestic deposits
2006 Rs.63829 crores Rs.59979 crores
2007 Rs.80682 crores Rs.76480 crores
• The Bank’s total deposits reached a level of Rs.80682 crores as on 30th June 2007 from Rs.63829 crores as on 30th June 2006, recording a growth of 26.40%. •
The growth of deposits in Q1 was 2.60%. The low cost deposits increased by 32% to Rs. 26045 crores as on 30 th June 2007 from Rs.20374 crores as on 30th June 2006.
• The Bank will effectively leverage on the 2 Million plus accounts opened by the Bank in 2006-07 and new accounts opened in the first quarter to accelerate the growth of low cost deposits. PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY • The domestic deposits, with the growth of 27.51%, scaled to a level of Rs.76480 crores as on 30th June 2007 from Rs.59979 crores as on 30th June 2006. Advances:
Global gross advances Domestic advances
2006 Rs. 41314 crores Rs.36233 crores
2007 Rs. 51844 crores Rs.46615 crores
• The Global gross advances as on 30th June 2007 increased by 25.49% to a level of Rs. 51844 crores from Rs. 41314 crores as on 30th June 2006. The CD ratio as on 30th June 2007 was placed at 64.26% as against 64.73% reported as of 30th June 2006. • The domestic advances grew by 28.65% to a level of Rs.46615 crores as on 30th June 2007 from Rs.36233 crores as on 30th June 2006.
Net profit: Net profit
2006 Rs. 180.58 crores
2007 Rs. 221.03 crores
• The net profit of the Bank increased to Rs. 221.03 crores for the quarter ended 30th June 2007 from Rs. 180.58 crores for the quarter ended 30th June 2006. •
The year-on-year growth of net profit works out to 22.40%. The growth is achieved from the higher NII of Rs. 41 crores and despite higher operating expenditure by Rs.48 crores as compared to the previous quarter.
ORGANISATION STUDY Operating Profit: 2006 Rs.293.95
• The operating profit for the quarter ended 30th June 2007 stood at Rs.314.52 crores as against Rs.293.95 crores reported for the quarter ended 30th June 2006 thereby recording a growth of 7%. • The low growth is mainly due to increased deposit cost on account of hardening of interest rate and higher depreciation of Rs.8 crores for investment of around Rs.132 crores incurred on account of accelerated CBS conversion in the last year and in the first quarter of the current year. Total Income: Total income Interest income Profit on sale of investments
2006 Rs.1357 crores Rs.1231 crores Rs. 24 crores
2007 Rs.1999 crores Rs.1846 crores Rs. 38 crores
• The total income of the Bank increased to Rs.1999 crores during the Q1 of 2007-08 from Rs.1357 crores against Q1 of 2006-07, an increase of 47.33%, mainly contributed by the growth in interest income. • Interest income for the quarter ended 30th June 2007 improved to Rs.1846 crores from Rs.1231 crores reported for the quarter ended 30th June 2006. While the overall growth in interest income works out to 50%, the increase in interest on advances was to the extent of 58.40%. PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY • The profit on sale of investments was to the extent of Rs. 38 crores for the quarter ended 30th June 2007 as against Rs. 24 crores earned for the quarter ended 30th June 2006. The fee based income increased to
Rs.127 crores for the quarter ended 30 th June 2007
from Rs.110 crores for the quarter ended 30 th June 2006, increase by 15.45%. Net Interest Income (NII): Net Interest Income
2006 Rs.506 crores
2007 Rs.547 crores
• The NII for the quarter ended 30 th June 2007 grew by 8% and stood at Rs.547 crores as against Rs.506 crores for the quarter ended 30th June 2006. Net worth: Net worth
2006 Rs.2818 crores
2007 Rs.3406 crores
• The Net worth of the Bank increased to Rs.3406 crores as on 30th June 2007 from Rs.2818 crores as on 30th June 2006, mainly contributed by the retained earnings.
NPA Management Non Performing Asset
• Gross NPA came down to 3.06% as of 30th June 2007 from 3.85% as of 30th June 2006. Net NPA came down to 0.82% as of 30th June 2007 from 0.86% as of 30th June 2006. Capital Adequacy Ratio (CAR): • The CAR stood at 12.62% as of 30th June 2007 well above the stipulated mark of 9%. The Tier I ratio was placed at 6.92% as of 30th June 2007 and the Tier II ratio stood at 5.70%. Other Financial Parameters: PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
i) Return on Assets: The return on assets declined to 0.98% as on 30th June 2007 from 1.02% as on 30th June 2006. The ratio as on 31st March 2007 was 0.91%. ii) Earning per share (EPS): EPS improved to Rs. 16.92 as on 30 th June 2007 from Rs. 13.84 as on 30th June 2006. iii) Book Value per Share: The Book Value per share increased from Rs. 57.74 as on 30th June 2006 to Rs. 73.59 as on 30th June 2007. iv) Employee Productivity: Business per employee improved from Rs. 4.04 crores as on 30th June 2006 to Rs. 4.96 crores as on 30th June 2007. Analysis of balance sheet and Profit & Loss Account of three years as on 31-03-2005 to 31-03-2007: The balance sheet of the Bank could be analyzed on the basis of the following important aspects, (Rs, in ‘000’) Capital Deposits Borrowings Investments Advances
31-03-2005 471,96,83 46294,56,25 322,00,93 20370,73,32 26729,20,28
31-03-2006 521,96,83 53624,39,47 343,05,50 17269,10,84 36466,23,31
31-03-2007 521,96,83 7863,35,67 1373,52,94 25234,01,14 51670,43,80
Income: Interest earned Other income Total
3757,62,37 564,55,41 4322,17,78
4050,41,90 561,96,59 4612,38,49
6040,07,15 618,47,63 6658,54,78
Expenditure: Interest expended Operating expenses Provisions & contingencies Total
2063,79,59 1264,20,34 591,27,74 3919,27,67
2169,54,87 1434,81,37 471,53,01 4075,89,25
3890,01,62 1385,97,52 666,49,56 5942,48,70
Profit / Loss: Net profit
Ratio analysis Ratio analysis is the mostly widely used method for the analysis of financial statement. A financial ratio is a ratio of selected values on a enterprise's financial statements. There are many standard ratios used to evaluate the overall financial condition of a corporation or other organization. Financial ratios are used by managers within a firm, by current and potential stockholders (owners) of a firm, and by a firm's creditors. Security analysts use financial ratios to compare the strengths and weaknesses in various companies. If shares in a company are traded in a financial market, the market price of the shares is used in certain financial ratios. Values used in calculating financial ratios are taken from the balance sheet, income statement, cash flow statement and (rarely) statement of retained earnings. These comprise the firm's "accounting statements" or financial statements.
The important ratios are as under, Return on Assets Earnings Per Share Profit Margin ratio Interest Expended Ratio. PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY Profit Margin ratio Profit margin measures the relationship between the total income and profit of the company. As the profits may be gross or net , there are two types of profit margin gross profit margin and net profit margin. Net profit margin measures the relationship between net profits and total income of the firm. Formula: Net Profit ×100 Total Income
Interpretation: The ratio reveals that the profit margin has been reduced in the year 2006-07 that is 10.75%, this is due to the increase in the total expenses of the bank. The major expense being the interest, which is increasing from the previous years.
Return on Assets ratio Return on Assets ratio is one of the profitability ratios which is measured in terms of the relationship between profits and assets. The ROA may also be called profit-to-asset ratio. It measures the profitability of the total investments of the firm. Formula: Net Profit ×100 Total Assets
Interpretation: The analysis shows that return on assets in the year 2006 is highest i.e .88%. But in the year 2007 it has been reduced to .80%, this is due to underutilization of the assets of the bank. In other words assets of the bank are not employed where optimum returns can be earned.
Interest Expense ratio Interest Expense reveals the relationship between the interest expended and the total income. The more the interest expense the less is the value of the ratio. This ratio also reveals the proportion of the amount paid as interest out of the total income of the company. Formula Interest Expended Ă—100 Total Income
Interest expense 0.58% Ratio Interpretation:
The ratio shows that .58% of the total income is paid as interest. It shows the interest expenditure is rising as compared to the past three years which in turn reduces the profit of the bank.
Earnings Per Share PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARSâ€™ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY It measures the profit available to the equity shareholders on a per share basis, that is, the amount that they can get on every share held. It is calculated by dividing the profits available to the shareholders by the number of the outstanding shares. Formula: EPS =
Net Profits Available to equity shareholders ×100 No of Shares outstanding
Earnings Per Share
Interpretation This shows that the profits available to equity shareholders have been increased over a period of time. This is because the total income of the bank has been increasing from the past years. It is the measure of profitability from the owner’s point of view. Perticulars Interest Expense/ Interest Income (%) Fee Based Income/ Total Income (%) Employee Cost / Operating Cost (%) Total Interest exp / Avg. interest bearing funds (%) Interest spread (%) Fund Based Income / Funds employed (%) Net Profit / Funds Employed (%) PAT / Net worth (%) Tax / PBT (%) Total liabilities / Net worth Investment Deposit Ratio Credit Deposit Ratio Capital Adequacy Ratio Ratio of NPA’s to Net Advances Yield on advances Cost of deposits Return on assets
31-Mar-07 64.40 7.61 66.95
31-Mar-06 31-Mar-05 53.56 54.92 7.30 6.76 74.63 78.37
3.20 7.69 0.86 19.76 0.00 24.63 0.32 0.66 10.70 1.59 8.64 4.58 0.82
3.51 7.78 0.94 18.93 0.00 21.55 0.32 0.68 11.73 0.86 8.72 4.48 0.91
3.81 8.52 0.83 18.33 7.04 23.70 0.44 0.58 11.74 0.76 9.28 5.44 0.91
Share statistics: As on
EPS (Rs.) CFPS (Rs.) Book Value (Rs.) DPS (Rs.)
31-Mar-07 13.72 15.32 69.41 3.23
31-Mar-06 10.28 11.15 54.29 2.85
31-Mar-05 8.54 9.33 46.58 2.26
LEARNING EXPERIENCE Learning Experience Gained 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. Various banks like Public Sector Bank, Private Sector Bank, Financial institution etc. are making sincere efforts to meet the expectations of the customer by providing better products and services. Syndicate bank is one among the Top Tenth bank in public sector. The study has highlighted that the bank is mainly focusing on customers’ satisfaction through various schemes. Syndicate bank is started the PIGMI deposit scheme. Which now generating deposits of Rs 20000000 per day .The study reveals that the Syndicate Bank continues to identify new areas and activities that require attention, for example the very recent schemes like Pigmy plus, Sindvidyarthi, syndsamanya are best examples. The risk management skills, process, and practices that need to be developed and strengthened. The bank is planning to adopt best international practices in Credit Risk Management and Base II implementation by outsourcing end to end solution viz., on –line appraisal system, risk management, risk inputs estimates, capital computation and RAROC framework. The bank is also in process of engaging reputed consultant to design and implement Operational Risk Management Framework. Apart from these the bank is also aiming to: PRASHANTHA SHETTY K, B. B. M. FINAL YEAR REG. NO. 050080049 BHANDARKARS’ ARTS & SCIENCE COLLEGE, KUNDAPURA
ORGANISATION STUDY 1. Highly focused on human resources initiative. An employee is given ample opportunities to learn and grow. 2. Bank has to give importance to: National Priorities: Some of the National priorities given by the bank in the areas like: Priority Sector Credit, Agriculture and Allied Activities, Rural Extension Education Programmes, Relief Measures for farmers, Housing Sector, Harnessing Solar Energy etc. Social Development: Syndicate Rural Development Trust, Rural Development and Self Employment Training Institute, SyndVidya, Implementation of Official Language (Hindi) etc. are its some of the concern towards social development. SME Sector: The bank is aiming for a minimum of 20% year –on –year growth in the outstanding credit to SME, with a view to doubling the credit to SME’s by 2009 -10. The bank is also providing composite loans up to Rs. 100 lacs to tiny sector. The bank has the novel, exclusive schemes for providing hassle free credit to SME’s like, Syndicate Laghu Udyami Credit Card wherein finance up to Rs.10 lacs can be made to small entrepreneurs and SyndUdyog, wherein, SME’s can be financed up to Rs. 50 lacs. 3. The security arrangements in the Bank are carried out satisfactorily. To achieve quantitative improvements in key areas of security, the Annual Security Action Plan had been effectively implemented.
ORGANISATION STUDY Apart from these issues the bank has to concentrate on various aspects like: Provide employment opportunities, provide better services, and focus on SME, Agriculture sector because they constitute a major part for the development of GDP of any nation; better training has to be given to the employees so that they can cope up with the latest technology which the bank is adopting now a days (CBS). In the present era, many banks make their best effort to attract number of customer towards them, which resulted in aggressive competition in banking industry. So, Syndicate Bank must cope up with the latest technology so as to provide better services for the customers, they must make an effort to study well the mindset of the customer and provide new products and services. As all the banks are trying to attract more industry to borrow loan from the bank, it is necessary for Syndicate Bank to improve the quality of service provided by the adoption of new technology like CBS, ATM, Global Card etc. in all their respective branches.
CONCLUSIONS Syndicate Bank Over the years has been various political, social and economic transitions. Today, Indian banking is under reform process. Foreign Banks are entering into market and private banks are gaining momentum. This stage is crucial for a nationalized Bank like SyndicateBank. Its future depends on how it can face threats and cash on opportunities. Thinking globally considering local aspects is the need of this hour. Syndicate Bank must use its vast banking experience to gain a strong hold in the Indian banking system and build a globally respected brand. SyndicateBank has a bright future as it gives greater thrust towards technological upgradation of its operations besides this, the bank has also installed ATMâ€™s at most of its branches. Realizing and evolving the diverse needs of customers the Bank has diversified too, entering several new areas such as credit card merchant banking, hire purchase and leasing and electronic remittance service etc. SyndicateBank is one among the few banks in the country to take up principal
International. Thus the activities of Bank are improving day by day. Today, SyndicateBank is a vibrant institution. It has spread its branch network in all 28 states and 4 union territories of the country and also abroad.
FINANCIAL RESULTS FOR THE NINE MONTH PERIOD ENDED DECEMBER 31, 2007 SyndicateBank HEAD OFFICE, MANIPAL - 576 104, KARNATAKA UNAUDITED ( REVIEWED ) FINANCIAL RESULTS FOR THE NINE MONTH PERIOD ENDED DECEMBER 31, 2007 Sl No
Interest earned (a+b+c+d) a) b) c) d)
Interest/discount on advances/bills Income on investments Interest on balances with Reserve Bank of India and other inter bank funds others
Quarter Quarter Nine ended ended months 31/12/2007 31/12/2006 ended (Reviewed ) (Reviewed 31/12/2007 ) (Reviewed ) 577188 198700 163530 415464 142678 114375 154856 53670 44309 533 4632 5047
(Rs. in Lakhs) Nine Previous months Accounting ended year ended 31/12/2006 31/03/2007 (Reviewed (Audited) ) 430343 604007 296806 417992 125055 170530 8239 15205
TOTAL INCOME (1+2)
Operating Expenses (e+f) e) f)
38005 23764 14241
37684 25056 12628
114506 73040 41466
106212 70752 35460
138597 89447 49150
Employees cost Other operating expenses
TOTAL EXPENDITURE (4+5) (Excluding Provisions and Contingencies)
OPERATING PROFIT (3-6) (Profit before Provisions and Contingencies)
Provisions (other than tax) and Contingencies
14 Net Profit(+)/Loss(-) for the period (12-13)
15 Paid-up equity share capital (Face value of the share Rs. 10/- each)
10 Profit(+)/Loss(-) from ordinary activities before tax (7-8-9) 11 Tax expenses 12 Net Profit(+)/Loss(-) from ordinary activities after tax (10-11) 13 Extraordinary items (net of tax)
16 Reserves excluding revaluation reserves (as per balance sheet of previous accounting year) 17 Analytical Ratios i) ii) iii)
Percentage of share held by Govt. of India Capital Adequacy Ratio Earning per share (Rs.)
(a) Basic and diluted EPS before Extraordinary items (net of tax expense) for the period, for the year to date and for the previous year (not to be annualised) (b) Basic and diluted EPS after Extraordinary items for the period, for the year to date and for the previous year (not to be annualised) NPA RATIO (a) Gross NPA (b) Net NPA (c ) % of gross NPAs (d) % of net NPAs Return on Assets
v) 18 Public Shareholding -
No. of shares Percentage of share holding
Consolidated Details for the nine months period ended 31.12.2007 1 2 3 4
Consolidated turnover Consolidated Net Profit Consolidated EPS (Not Annualised) Consolidated EPS (Annualised)
160472 70278 2.86 1.27 1.02
165211 43780 3.33 0.90 1.06
155981 39101 2.95 0.76 0.91
160472 70278 2.86 1.27 1.16
165211 43780 3.33 0.90 1.18
175000000 175000000 175000000 175000000 175000000 33.53% 33.53% 33.53% 33.53% 33.53%
Rs. in Crores
141,569.00 722.04 13.83 18.44
BIBLIOGRAPHY • www.finance.indiamart.com/investment_in_india/banking_in_india.html • http://syndicatebank.in • IBA bulletins. • Brochures, Hand Books, Circulars, Magazines, Annual reports provided by SyndicateBank • Book titled “Syndicate Bank A Peoples Bank” by M. V. Kamath.
Products and Services Profile McKinseyâ€™s 7S Framework
Analysis Of Financial Performance
BHANDARKARS’ ARTS AND SCIENCE COLLEGE, KUNDAPUR
CERTIFICATE This is to certify that Mr. PRASHANTHA SHETTY K. is a student of Final Year B. B. M. 2007-08 of this institution. This project report Titled “A PROJECT REPORT ON ORGANIZATION STUDY OF SYNDICATE BANK” has been prepared by him in partial fulfillment for the requirement of the Bachelors Degree in Business Management, to be submitted to Mangalore University, under the supervision and guidance of Ms. VIDYA, Lecturer, Department of Commerce and Business Management.
Date: Place: Kundapura
Head of the Department of Commerce and Business Management
BHANDARKARS’ ARTS AND SCIENCE COLLEGE, KUNDAPUR
DECLARATION I PRASHANTHA SHETTY K, a student of BHANDARKARS’ ARTS AND SCIENCE COLLEGE, KUNDAPUR, Final Year B. B. M. 2007-08 do hereby declare that this project report Titled “A PROJECT REPORT ON ORGANIZATION STUDY OF SYNDICATE BANK” is my original work and that it has not previously formed the basis for the reward of any Degree / Diploma or other similar title. This project is been prepared by me in partial fulfillment for the requirement of the Bachelors Degree in Business Management, to be submitted to Mangalore University, under the supervision and guidance of Ms. VIDYA, Lecturer, Department of Commerce and Business Management. Date: Place: Kundapura (MR. PRASHANTHA SHETTY K.)
ACKNOWLEDGEMENT I am very much beholden to Mangalore University for this wonderful opportunity to undertake the Project Study as a part of the fulfillment of Bachelorâ€™s Degree in Business Management. My grateful thanks are due to Prof. NARAYAN RAO the Principal, Bhandarkarsâ€™ Arts and Science College for extending the necessary support in the preparation of this project. A particular word of thanks is due to
SHANTHARAM H.O.D. of Commerce and Business Management and other faculty members for their useful tips and encouragement. My esteemed guide, Ms. VIDYA, Lecturer in Business Management, deserves all appreciation and thanks for patiently and efficiently guiding me throughout the preparation of this project. I am extremely grateful to Deputy General Manager SRI SUJIR
VASANTH NAYAK & STAFF OF SYNDICATEBANK Regional Office Udupi for providing the necessary information I also express my gratitude to RADHAKRISHNA JOISA, Personal Department Head Office Manipal for his words of wisdom, encouragement and the interest he had to make my project an interesting and educative one. Above all I thank my parents for helping, and encouraging me throughout my project work and also my friends and Mr. DINESH BHAT of BHAT'S TELECOM CENTRE , who have helped me in completing this project on time.
Mr. Prashantha Shetty K. Reg. No. 050080049
Under The Guidance of Ms. VIDYA, Lecturer, Department of Commerce and Business Management Project Report submitted to Mangalore University in partial fulfillment for the requirement of the Bachelor’s Degree in Business Management.
BHANDARKARS’ ARTS AND SCIENCE COLLEGE, KUNDAPUR