A REPORT PROJECT ON MARKETING ON SMALL SCALE AND ITS COMMERCIAL LOAN PRODUCTS With reference to STATE BANK OF INDIA MAIN BRANCH,VIZIANAGARAM Aproject report submitted in partial fulfillment of the requirement for the award of The degree of MASTER OF BUSINESS ADMINISTRATION Submitted by GRANDHI BANGARU LAKSHMI Regd no: 112250402040 Under the guidance of Mr. V.S.K.VARMA
DEPARTMENT OF COMMERCE AND MANAGEMENT STUDIES MAHARAJA’S POST GRADUATE COLLEGE Approved by AICTE NEW (Affiliated to Andhra University,Visakhapatnam) Phool Baugh, Vizianagaram 2012-2014
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PARTICULARS INTRODUCTION INDUSTRY AND ORGANISATIONAL PROFILE CONCEPTS OF SME PRATICAL STUDY SUMMARY
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DECLARATION •
I, G.BANGARU LAKSHMI studying at Maharaja post Graduation college, Vizianagaram, hereby state that this summer internship project titled “MARKITING OF SMALL SCALE INDUSTRIES AND ITS COMMERCIAL LOAN PRODUCTS”, carried out at STATE BANK OF INDIA, MAIN Branch of Vizianagaram district, is an original work carried out by me under the guidance and supervision of Mr.T.S.GOWTHAM,chief manager of Main branch vizianagaram and that the project or any part thereof has not been previously submitted for a Degree/Diploma of any University/Institution elsewhere.
DATE:-2th July, 2013
G.BANGARU LAKSHMI MRPG COLLEGE.
Acknowledgment Iam thankful to project guide mr.satish varma sir (assistance professor) deportment of management studies, Mrpg College, Vizianagaram for guiding and helping me in the completion of this project I encerely thank for prof. p.srinuvasa subba rao his consistent advice and encouragement during my project work period I also thank to gowtham sir and the training department of State bank of India which permitted me to complete my practical training at their prestigious organization Iam grateful to prof. Tavitinaidu rao garu of Mrpg college vizianagaram for endower and cooperation in doing the project Place:Date:Signature G.BANGARU LAKSHMI
BANKING IN INDIA
Structure of the organised banking sector in India. Number of banks are in brackets.
Banking in India :In the modern sense originated in the last decades of the 18th century. The first banks were Bank of Hindustan (1770-1829) and The General Bank of India, established 1786 and since defunct. The largest bank, and the oldest still in existence, is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India in 1955. For many years the presidency banks acted as quasi-central banks, as did their successors, until the Reserve Bank of India was established in 1935. In 1969 the Indian government nationalised all the major banks that it did not already own and these have remained under government ownership. They are run under a structure know as 'profit-making public sector undertaking' (PSU) and are allowed to compete and operate as commercial banks. The Indian banking sector is made up of four types of banks, as well as the PSUs and the state banks, they have been joined since 1990s by new private commercial banks and a number of foreign banks. Banking in India was generally fairly mature in terms of supply, product range and reach-even though reach in rural India and to the poor still remains a challenge. The government has developed initiatives to address this through the State bank of India expanding its branch network and through the National Bank for Agriculture and Rural Development with things like microfinance. History
In ancient India there is evidence of loans from the Vedic period (beginning 1750 BC). Later during the Maurya dynasty (321 to 185 BC), an instrument called adesha was in use, which was an order on a banker desiring him to pay the money of the note to a third person, which corresponds to the definition of a bill of exchange as we understand it today. During the Buddhist period, there was considerable use of these instruments. Merchants in large towns gave letters of credit to one another Colonial era During the period of British rule merchants established the Union Bank of Calcutta in 1829, first as a private joint stock association, then partnership. Its proprietors were the owners of the earlier Commercial Bank and the Calcutta Bank, who by mutual consent created Union Bank to replace these two banks. In 1840 it established an agency at Singapore, and closed the one at Mirzapore that it had opened in the previous year. Also in 1840 the Bank revealed that it had been the subject of a fraud by the bank's accountant. Union Bank was incorporated in 1845 but failed in 1848, having been insolvent for some time and having used new money from depositors to pay its dividends The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India, it was not the first though. That honour belongs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed, with some of its assets and liabilities being transferred to the Alliance Bank of Simla. Foreign banks too started to appear, particularly in Calcutta, in the 1860s. The Comptoir d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862; branches in Madras and Pondicherry, then a French possession, followed. HSBC established itself in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of the British Empire, and so became a banking centre. The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in 1895, which has survived to the present and is now one of the largest banks in India.
Around the turn of the 20th Century, the Indian economy was passing through a relative period of stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial and other infrastructure had improved. Indians had established small banks, most of which served particular ethnic and religious communities. The presidency banks dominated banking in India but there were also some exchange banks and a number of Indian joint stock banks. All these banks operated in different segments of the economy. The exchange banks, mostly owned by Europeans, concentrated on financing foreign trade. Indian joint stock banks were generally under capitalised and lacked the experience and maturity to compete with the presidency and exchange banks. This segmentation let Lord Curzon to observe, "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." The period between 1906 and 1911, saw the establishment of banks inspired by the Swadeshi movement. The Swadeshi movement inspired local businessmen and political figures to found banks of and for the Indian community. A number of banks established then have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India. The fervor of Swadeshi movement lead to establishing of many private banks in Dakshina Kannada and Udupi district which were unified earlier and known by the name South Canara ( South Kanara ) district. Four nationalized banks started in this district and also a leading private sector bank. Hence undivided Dakshina Kannada district is known as "Cradle of Indian Banking". 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 Indian banking. The years of the First World War were turbulent, and it took its toll with banks simply collapsing despite the Indian economy gaining indirect boost due to war-related economic activities. At least 94 banks in India failed between 1913 and 1918 as indicated in the following table:
Y N A Paid-up Capital eu(Rs. Lakhs) am t rbh seo r i oz fe d b ac na kp si t ta hl a t( R fs a. i lL ea dk h s ) 11235
927 14 3 147109 921 10 4 115 916 1 5 1124 93 11 6 19725 96 1 7 1721 90 19 8
Post-Independence
The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal, paralyzing banking activities 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: •
The Reserve Bank of India, India's central banking authority, was established in April 1935, but was nationalized on 1 January 1949 under the terms of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948 (RBI, 2005b).
•
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 could be opened without a license from the RBI, and no two banks could have common directors.
ROLE OF SMALL BUSINESS IN NATIONAL ECONOMY Small business has played a very crucial role in transforming the Indian economy from a backward agrarian economy to its present stature. Its benefits range from creating job opportunities for millions of people, including many with low levels of formal education. It hasnurtured the inherent entrepreneurial spirit in far flungcorners of the nation resulting in the growth and development of all regions. It has been instrumental in raising the standard of living of the multitudes. The small scale sector has contributed specifically in the following areas: 1. Employment Generation: The SSI sector in India is the second largest manpower employer in the country next only to the agriculture sector. India is characterized by abundant labour supply and is plagued by unemployment and underemployment. Under these circumstances the smallscale sector is a boon .For every Rs.0.1million of investment, the small-scale sector provides jobs to 26 people as compared to 4 jobs created in the large-scale sector.
2. Low Initial Capital Investment: Another feature of the Indian economy and most of the developing economies is the scarcity of capital. The modern large -scale sector requires colossal investments whereas the small sector is just the opposite. Not only is the employment capital ratio high for the SSI but the output capital ratio is also high. 3. Balanced Regional Development: Dispersion of small business in all parts of the country helps in removing regional imbalances by promoting decentralized development of industries. It helps in industrialization of rural and backward areas. It also helps to reduce problems of congestion, pollution, housing, sanitation etc.23 4. Equitable Distribution of Income: This is a natural corollary of the above. When entrepreneurial talent is tapped in different regions and areas the income is also distributed instead of being concentrated in the hands of a few individuals or business families. 5. Promotes Inter-Sectoral Linkages: SSI units are supplementary and complementary to large and medium scale units as ancillary units. Many small units produce sub-parts, assemblies, components and accessories for the large-scale sector especially in the electronic and automotive sectors. 6. Exports: The most significant contribution of the SSI has been in the field of exports. There has been a significant increase in the exports from this sector of both traditional and nontraditional goods including jewellery, Ornaments ,leather, hand tools, engineering goods, soft ware etc. 7. Development of Entrepreneurship: Small business taps the latent potential available locally. This way they facilitate the spirit of enterprise, which results in overall growth, and development of all the regions /sectors of the nation.
NEED AND SIGNIFICANCE OF THE STUDY
OBJECTIVES ASSIGNED BY THE PROJECT MENTOR: To study the profile of State Bank of India To study the theoretical concept of marketing of small-scale and medium industries and commercial loans products To know different schemes provide by the organization to costumers To gather information about extent of satisfaction of the costumers which respective schemes provided by organization To analysis the information gathered from costumers and to give some suggestive measures To review overall marketing activates performed by the organization To understand facilities provided by SBI and SBI loan providing schemes Informing about various schemes to the costumers METHOLOGY OF STUDY: The methology used for this study various sources they are: Primary data source Secondary data source PRIMARY DATA SOURCES:This data includes personnel discussion and interviews with various customers of SBI bank and others banks .the data was collected through the questionnaires’ with a sample size of 75 members SECONDARY DATA SOURCES:Secondary data consist of information that already exist some where.The data collected through secondary scoures including both internal and external sources .Intenal scources include
project mentor in branch .the external sources include information adobted from books, internet etc… LIMITATIONS:Time is major constraint This study is limited to maximum business The sample size is limited to 75 The respondents replay is based on their interest and mood Any bias in the information may lead to limitation The period of 10 weeks is not enough to cover all the aspects
PERIOD OF STUDY:The period of study is 10 weeks starting from 2nd may to 15th July
CHAPTER 2 INDUSTRY ORGANISATIONAL PROFIL Brief profile of organization:State Bank of India (SBI) is a multinational banking and financal services company based in India. It is a government owned organisation with its headquarters inMumbi maharastra. As of December 2012, it had assets of US$501 billion and 15,003 branches, including 157 foreign offices, making it the largest banking and financial services company in India by assets. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other two presidency banks—Bank of Calcutta and Bank of Bombay—to form the Imperial Bank of India, which in turn became the State Bank of India. Government of India nationalized the Imperial Bank of India in 1955, with Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. SBI was ranked 285th in the Fortune Global 500 rankings of the world's biggest corporations for the year 2012. SBI provides a range of banking products through its network of branches in India and overseas, including products aimed at non-resident Indians (NRIs). SBI has 14 regional hubs and 57 Zonal Offices that are located at important cities throughout the country. SBI is a regional banking behemoth and has 20% market share in deposits and loans among Indian commercial banks. The State Bank of India was named the 29th most reputed company in the world according to Forbes 2009 rankings and was the only bank featured in the "top 10 brands of India" list in an annual survey conducted by Brand Finance and The Economic Times in 2010.The roots of the State Bank of India lie in the first decade of 19th century, when the Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of Bengal was one of three Presidency banks, the other two being the Bank of Bombay (incorporated on 15 April
1840) and the Bank of Madras (incorporated on 1 July 1843). All three Presidency banks were incorporated as joint stock companies and were the result of the royal charters. These three banks received the exclusive right to issue paper currency till 1861 when with the Paper Currency Act, the right was taken over by the Government of India. The Presidency banks amalgamated on 27 January 1921, and the re-organised banking entity took as its name Imperial Bank of India. The Imperial Bank of India remained a joint stock company but without Government participation. Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India, which is India's central bank, acquired a controlling interest in the Imperial Bank of India. On 30 April 1955, the Imperial Bank of India became the State Bank of India. The government of India recently acquired the Reserve Bank of India's stake in SBI so as to remove any conflict of interest because the RBI is the country's banking regulatory authority. In 1959, the government passed the State Bank of India (Subsidiary Banks) Act, which made eight state banks associates of SBI. A process of consolidation began on 13 September 2008, when the State Bank of Saurashtra merged with SBI. SBI has acquired local banks in rescues. The first was the Bank of Behar (est. 1911), which SBI acquired in 1969, together with its 28 branches. The next year SBI acquired National Bank of Lahore (est. 1942), which had 24 branches. Five years later, in 1975, SBI acquired Krishnaram Baldeo Bank, which had been established in 1916 in Gwalior State, under the patronage of Maharaja Madho Rao Scindia. The bank had been the Dukan Pichadi, a small moneylender, owned by the Maharaja. The new banks first manager was Jall N. Broacha, a Parsi. In 1985, SBI acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was the acquirer as its affiliate, the State Bank of Travancore, already had an extensive network in Kerala. The State Bank of India and all its associate banks are identified by the same blue keyhole logo. The State Bank of India wordmark usually has one standard typeface, but also utilises other typefaces. Structure Current Board of Directors
As on 14 January 2013, there are fifteen members in the SBI board of directors:•
Pratip Chaudhuri (Chairman)
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Hemant G. Contractor (Managing Director)
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Diwakar Gupta (Managing Director)
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A. Krishna Kumar (Managing Director)
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S. Visvanathan (Managing Director)
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S. Venkatachalam (Director)
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D. Sundaram (Director)
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Parthasarathy Iyengar (Director)
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Thomas Mathew (Director)
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S.K. Mukherjee (Officer Employee Director)
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Rajiv Kumar (Director)
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Jyoti Bhushan Mohapatra (Workmen Employee Director)
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Deepak Amin (Director)
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Harichandra Bahadur Singh (Director)
International presence The Israeli branch of the State Bank of India located in Ramat Gan. As of 28 June 2013, the bank had 180 overseas offices spread over 34 countries. It has branches of the parent in Moscow, Colombo, Dhaka, Frankfurt, Hong Kong, Tehran, Johannesburg, London, Los Angeles, Male in the Maldives, Muscat, Dubai, New York, Osaka, Sydney, and Tokyo. It has offshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Cape Town. It also has an ADB in Boston, USA. The Canadian subsidiary, State Bank of India (Canada) also dates to 1982. It has seven branches, four in the Toronto area and three in the Vancouver area. SBI operates several foreign subsidiaries or affiliates. In 1990, it established an offshore bank: State Bank of India (Mauritius).
State Bank of India (S.B.I.) Branch at Tsim Sha Tsui, Hong Kong In 1982, the bank established a subsidiary, State Bank of India (California), which now has ten branches – nine branches in the state of California and one in Washington, D.C. The 10th branch was opened in Fremont, California on 28 March 2011. The other eight branches in California are located in Los Angeles, Artesia, San Jose, Canoga Park, Fresno, San Diego, Tustin and Bakersfield. In Nigeria, SBI operates as INMB Bank. This bank began in 1981 as the Indo-Nigerian Merchant Bank and received permission in 2002 to commence retail banking. It now has five branches in Nigeria. In Nepal, SBI owns 55% of Nepal SBI Bank, which has branches throughout the country. In Moscow, SBI owns 60% of Commercial Bank of India, with Canara Bank owning the rest. In Indonesia, it owns 76% of PT Bank Indo Monex. The State Bank of India already has a branch in Shanghai and plans to open one in Tianjin.[7] In Kenya, State Bank of India owns 76% of Giro Commercial Bank, which it acquired for US$8 million in October 2005. Associate banks SBI has five associate banks; all use the State Bank of India logo, which is a blue circle, and all use the "State Bank of" name, followed by the regional headquarters' name: •
State Bank of Bikaner & Jaipur
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State Bank of Hyderabad
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State Bank of Mysore
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State Bank of Patiala
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State Bank of Travancore
Earlier SBI had seven associate banks, all of which had belonged to princely states until the government nationalized them between October 1959 and May 1960. In tune with the first Five
Year Plan, which prioritized the development of rural India, the government integrated these banks into State Bank of India system to expand its rural outreach. There has been a proposal to merge all the associate banks into SBI to create a "mega bank" and streamline the group's operations The first step towards unification occurred on 13 August 2008 when State Bank of Saurashtra merged with SBI, reducing the number of associate state banks from seven to six. Then on 19 June 2009 the SBI board approved the absorption of State Bank of Indore. SBI holds 98.3% in State Bank of Indore. (Individuals who held the shares prior to its takeover by the government hold the balance of 1.77%.) The acquisition of State Bank of Indore added 470 branches to SBI's existing network of branches. Also, following the acquisition, SBI's total assets will inch very close to the 10 trillion mark (10 billion long scale). The total assets of SBI and the State Bank of Indore stood at 9,981,190 million as of March 2009. The process of merging of State Bank of Indore was completed by April 2010, and the SBI Indore branches started functioning as SBI branches on 26 August 2011 Non-banking subsidiaries Apart from its five associate banks, SBI also has the following non-banking subsidiaries: •
SBI Capital Markets Ltd
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SBI Funds Management Pvt Ltd
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SBI Factors & Commercial Services Pvt Ltd
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SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)
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SBI DFHI Ltd
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SBI Life Insurance Company Limited
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SBI General Insurance
In March 2001, SBI (with 74% of the total capital), joined with BNP Paribas (with 26% of the remaining capital), to form a joint venture life insurance company named SBI Life Insurance
company Ltd. In 2004, SBI DFHI (Discount and Finance House of India) was founded with its headquarters in Mumbai. Other SBI service points SBI has 27,000+ ATMs (25,000th ATM was inaugurated by the then Chairman of State Bank Shri O.P. Bhatt on 31 March 2011, the day of his retirement); and SBI group (including associate banks) has about 45,000 ATMs. SBI has become the first bank to install an ATM at Drass in the Jammu & Kashmir Kargil region. This was the Bank's 27,032nd ATM on 27 July 2012. Recent awards and recognitions •
Best Online Banking Award, Best Customer Initiative Award & Best Risk Management Award (Runner Up) by IBA Banking Technology Awards 2010
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The Bank of the year 2009, India (won the second year in a row) by The Banker Magazine
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Best Bank – Large and Most Socially Responsible Bank by the Business Bank Awards 2009
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Best Bank 2009 by Business India
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The Most Trusted Brand 2009 by The Economic Times
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Most Preferred Bank & Most preferred Home loan provider by CNBC
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Visionaries of Financial Inclusion By FINO
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Technology Bank of the Year by IBA Banking Technology Awards
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SKOCH Award 2010 for Virtual corporation Category for its e-payment solution
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The Brand Trust Report:[12] 11th most trusted brand in Hindustan.
Major competitor Some of the major competitors for SBI in the banking sector are ICICI Bank, HDFC Bank, Axis Bank, Bank of India, Punjab National Bank and Bank of Baroda. However in terms of average market share, SBI is by far the largest player in the market.
CHAPTER 3
INTRODUCTION:Micro-enterprise :A micro-enterprise is one where the investment in plant and machinery (their original cost excluding land, building and items specified by the Ministry of Small Scale Industries in its notification No. S.O. 1722(E) dated October 5, 2006) does not exceed Rs.25 lakh. Small enterprise:A small enterprise is one where the investment in plant and machinery (see above) is more than Rs.25 lakh but does not exceed Rs.5 crore. Medium enterprise:A medium enterprise is one where the investment in plant and machinery (see above) is more than Rs.5 crore but does not exceed Rs.10 crore. The definition of MSMEs in the service sector is: •
Micro-enterprise: Investment in equipment does not exceed Rs.10 lakh
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Small enterprise: Investment in equipment is more than Rs.10 lakh but does not exceed Rs.2 crore
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Medium enterprise: Investment in equipment is more than Rs.2 crore but does not exceed Rs.5 crore
Types of small scale industries Micro industries Ancillary industries Service industries
Feeder industries Marketing of small scale and medium Industries and commercial loan products The Fiscal commission Government of India, new Delhi 1950, for the first time defined a Small – scale industry as, one which is operated mainly with hired labor usually 10 to 50 hands The small scale industries board in 1955 defined,” small scale industry as a unit employing less than 50 employees if using power and less than 100 employees if not using power and with a capital asset not exceeding Rs 5 lakhs The new policy initiative in 1999-2000 defined small scale industry as a unit engaged in manufacturing ,repairing, processing and preservation of goods having investing in plant and machinery at an original cost not exceeding Rs 100 lakhs For small scale industries ,the planning commission of India uses term “village an small scale industry and the traditional cottage and house hold industries
Small Scale Sector 1. The Small Scale Sector is the natural habitat of entrepreneurs. Most entrepreneurs start small and then nurture their units into large industries. The SSI Sector provides an opportunity for them to hone their skills and talents, to experiment, to innovate and transform their ideas into goods and services needed by the society. Over the last six decades the Small Scale Industry sector has emerged as a highly vibrant and dynamic sector. It has acquired a prominent place in the socioeconomic development of the country. Mostly this sector exhibited positive growth trends even during periods when other sectors of the economy experienced either negative or nominal growth. Today this sector accounts for 95 percent of the industrial units, provides nearly 80 percent of manufacturing employment and contributes around 35 percent of exports. It produces 7500 items and provides employment to more than 195 lakh 17
persons. It is a well-recognized fact that a vibrant small-scale sector holds the key to economic prosperity in an economy like India. Profile of SSI Sector in India _ 95% of Industrial Units in the Country _ 39.92% of Value Added in the Manufacturing Sector _ 34.29% of National Exports _ 6.86% of Gross Domestic Product _ Employment To 193 Lakh Persons _ Production of Over 7500 Items in the Industrial Sector _ 298 Items Reserved for Exclusive Manufacture _ 358 Items for Exclusive Purchase from This Sector OBJECTIVES After going through this lesson you should be able • To define a Small Scale Industry, Ancillary Industry, Tiny Unit, Small Scale Service And Business Enterprises [SSSBEs], Women Enterprise and Export Oriented Unit. • Differentiate Between The Traditional and Modern Small Scale Sector • Explain the Nature and Characteristics of SSIs • Examine the Role of Small Business in National Economy • Describe how Small Industries act as Seedbed of Entrepreneurship .CONCEPTS AND DEFINITIONS In most parts of the world the nomenclature used is Small and Medium Enterprises (SMEs) and the criteria for defining include the number of employees and /or the turnover. In India the Small Scale Industry evokes different meanings for different agencies and the financial institutions. For example for the purpose of Excise and Sales Tax Exemption, the turnover alone is the determining criterion. However in broader terms, currently, an SSI is defined in terms of investment ceilings on the original value of installed plant and machinery. THE SMALL SCALE INDUSTRIAL
UNDERTAKING An industrial undertaking in which the investment in plant and machinery, whether held on ownership terms or on lease/hire-purchase basis, does not exceed Rs. 10 million (Rs. 1 crore) is regarded as a small-scale undertaking. These include manufacturing and service units. ANCILLARY INDUSTRIAL UNDERTAKING An industrial undertaking which is engaged or is proposed to be engaged in the manufacture or producing of parts, components, sub-assemblies, tooling or intermediates; or the rendering of services is termed as an ancillary undertaking .The ancillary undertaking is required to supply or render or propose to supply not less than 50 percent of its production or services, as the case may be, to one or more other industrial undertakings as the case may be. The investment in plant and machinery, whether held on ownership basis or on lease or on hire purchase, should not exceed Rs. 10 million. Over the years the following sub-sectors have been identified within the overall small-scale sector: TINY ENTERPRISE A unit is treated as a tiny enterprise where the investment in plant and machinery does not exceed Rs. 2.5 million (Rs. 25 Lakhs) irrespective of the location of the unit. Many shops, schools, parlous, Photostat and STD booths in your vicinity are all examples of tiny units. SMALL SCALE SERVICE AND BUSINESS ENTERPRISE [SSSBES] An industry related service/business enterprise with investment up to Re.0.5 million (5 Lakhs) in fixed assets, excluding land and building, is treated as an SSSBE. E.g. advertising agencies, Marketing consultancy, Auto repair, services and garages, Tailoring, Desktop printing etc. The service sector has emerged as the major segment of the economy. WOMEN’S ENTERPRISES 19 A Women Entrepreneur’s Enterprise is termed as an SSI unit/industry-related service or business enterprise, managed by one or more women entrepreneurs in proprietary concerns, or in which
she/they individually or jointly have a share capital of not less than 51 percent as partners/shareholders/directors of a private limited company/members of a cooperative society. EXPORT ORIENTED UNIT [EOU] A unit with an obligation to export at least 30 percent of its annual production by the end of the third year of commencement of production and having an investment ceiling up to Rs. 10 million (Rs. 1 crore) in plant and machinery is termed as an export oriented SSI unit. Key Words SSI, Ancillary Industry, Tiny Enterprise, SSSBEs, Women’s Enterprise, EOU Investment Ceilings for Small Scale Industries (2006) Type of SSI unit Investment limit (1 million= 10 Lakhs) Remarks Small Scale Industry Ancillary Tiny Enterprise Service & Business Enterprise Women Enterprise Export Oriented Rs 10 million Rs 10 million Rs 2.5 million Rs 0.5 million Rs. 10 million Rs. 10 million Historical cost of plant & machinery At least 50% of its output should go to other industrial undertaking No location limits
No location limit 51% equity holding by women Obligation to export 30% of production In India no separate definition of medium enterprises exists and as such there is no specific definition of Small and Medium Enterprises [SMEs.] Administratively, in the Indian context, the industry universe is divided into three major segments Factory Sector- Large Scale units- (Non- SSIs); 20 Factory Sector-Small Scale units Village and Small Industries sector [VSI.] The VSI sector has further been divided into two broad sub-sectors viz: The Modern SSI Sector and the Traditional SSI Sector. Modern Small Scale Industries These cover SSI units [both in the Factory and Non/Factory sectors] and power loom units. Such units mostly use power driven machinery and possess superior production techniques. Units in this sub-sector are generally located in close proximity to large industrial centers or urban areas. These industries are moving away from the traditional products to knowledge-based products. Traditional Small Scale Industries This sector comprises tiny and cottage industry segments like handlooms, khadi and village industries, handicrafts, sericulture and silk, rubber and coir. These units are labor- intensive, are generally located in rural and semi-urban areas and are artisan based. Usually the capital invested is also nominal .Check your progress: Match the following: Modern SSI Khurja Pottery Large Scale Industry Sona Steering supplying to Maruti Udyog SSI Laundry Services Tiny Paper Manufacturing Unit with Rs. 10 million investment Ancillary Photostatting Unit with Rs. 0.5 million investment SSSBEs TELCO Traditional SSI Call Centre
NATURE AND CHARACTERISTICS Small-scale industries have certain unique features, which distinguish it from the Large-scale sector. Some of the salient characteristics of small-scale businesses are given below. 1. Personal Character: In most small businesses the owners themselves are managers and so they can operate independently. They can give customized service to their clients, which in many cases is their USP. 2. Flexibility: Since most small businesses are a one-man show they do not have to go through a hierarchy to get permissions to make changes. Small business can respond quickly to environmental trends. Nimbleness and agility are 21 characteristics that allow small entrepreneurs to understand market conditions and rapidly respond to changes. 3. Labour Intensive: Small businesses have tremendous capacity for employment generation through their labour intensive techniques. Small businesses actually create more jobs than big businesses. This feature of a small-scale unit is of great significance in a country like India where the number of unemployed people is phenomenal. 4. Local Area of Operation: Small businesses are largely local in operation; however the market for its products may be local, regional or even international. 5. Short Gestation Period: The capital investment in the small sector is generally low and the time taken for production to commence is also less. As a result of short gestation period the units give quick returns and consequently the pace of economic development quickens. PROBLEMS OF SMALL BUSINESS While the small entrepreneurs can set up a unit even with less capital, enjoy quick returns and have the flexibility to handle the vagaries of the market, they have to face many problems like the following: 1. Paucity of Finance: The small entrepreneurs possess a weak financial structure and find it extremely difficult to obtain credit because of lack of collateral security. This acts as a big handicap, especially in the initial stages, in most of their operations like their ability to hire the best workers or to purchase the latest machinery and equipment or to acquire sophisticated technology.
2. Poor availability of power and other infrastructure: Though infrastructural bottlenecks are problems for big businesses too, yet they can overcome these problems to some extent because of their financial strength e.g. generating their own power, or even influencing the government in framing its policies sometimes. The small entrepreneur on the other hand has to battle with them. 3. Obsolete Technology: Most small businesses use old technologies because they cannot afford better. As a result the quality of their goods is inferior and the cost of production is higher than in case of other big ventures. This has acted as a serious handicap especially after opening up of the economy when they have had to compete with imported goods. 4. Marketing Problems: The small entrepreneur cannot supply standardized goods of high quality and as a result cannot compete with products of large companies or MNCs. They usually do not have a brand name or loyalty, as there are hardly any funds for advertising or sales promotion. All these increase their marketing woes. 22 5. Poor Managerial and Organizational Skills: usually the entrepreneur has to perform a multitude of diverse functions invariably with out having any exposure to professional education or formal training. The large sector on the other hand can hire the best qualified and trained people. 6. High Incidence of Sickness 7 out of 10 small businesses usually fall sick and die within 3to5 years. Main causes for this are a wrong choice of product, poor managerial skills, lack of experience, poor quality of products because of the use of old technologies, etc. Apart from the above-mentioned problems the small entrepreneur has weak bargaining power to deal with suppliers and financial institutions, has to face bureaucratic red tapism and is unable to invest in R & D. After the opening up of the economy the small sector has been finding it extremely difficult to compete with the high quality goods available in the market. ROLE OF SMALL BUSINESS IN NATIONAL ECONOMY Small business has played a very crucial role in transforming the Indian economy from a backward agrarian economy to its present stature. Its benefits range from creating job opportunities for millions of people, including many with low levels of formal education. It has nurtured the inherent entrepreneurial spirit in far flung corners of the nation resulting in the
growth and development of all regions. It has been instrumental in raising the standard of living of the multitudes. The small scale sector has contributed specifically in the following areas: 1. Employment Generation: The SSI sector in India is the second largest manpower employer in the country next only to the agriculture sector. India is characterized by abundant labour supply and is plagued by unemployment and underemployment. Under these circumstances the small scale sector is a boon .For every Rs.0.1million of investment, the small-scale sector provides jobs to 26 people as compared to 4 jobs created in the large-scale sector. 2. Low Initial Capital Investment: Another feature of the Indian economy and most of the developing economies is the scarcity of capital. The modern large scale sector requires colossal investments whereas the small sector is just the opposite. Not only is the employment capital ratio high for the SSI but the output capital ratio is also high. 3. Balanced Regional Development: Dispersion of small business in all parts of the country helps in removing regional imbalances by promoting decentralized development of industries. It helps in industrialization of rural and backward areas. It also helps to reduce problems of congestion, pollution, housing, sanitation etc. 23 4. Equitable Distribution of Income: This is a natural corollary of the above. When entrepreneurial talent is tapped in different regions and areas the income is also distributed instead of being concentrated in the hands of a few individuals or business families. 5. Promotes Inter-Sectoral Linkages: SSI units are supplementary and complementary to large and medium scale units as ancillary units. Many small units produce sub-parts, assemblies, components and accessories for the large -scale sector especially in the electronic and automotive sectors. 6. Exports: The most significant contribution of the SSI has been in the field of exports. There has been a significant increase in the exports from this sector of both traditional and nontraditional goods including jewellery, garments ,leather, hand tools, engineering goods, soft ware etc. 7. Development of Entrepreneurship: Small business taps the latent potential available locally. This way they facilitate the spirit of enterprise, which results in overall growth, and development of all the regions /sectors of the nation.
TYPES OF LOANS FOR S.M.E
CORPORATE LOAN:Details Target Group Existing and new companies/partnership/proprietor firms engaged in manufacturing activity. Purpose On going capital expenditure/ technology up-gradation/ renovation, Repayment of high cost debt, VRS scheme, acquisition of trademarks, patents, shoring up NWC. Facility Clean Term Loan Quantum of Finance • Minimum Rs 25 Lacs • Maximum Rs 10 Crores for non corporate borrowers • No cap for corporate borrowers Interest Rate At least one step higher than the applicable rate as per internal rating. Security Primary Security: Charge on the assets created from financial assistance. Collateral:Land, building etc. Personal Guarantee of Promoters/ Partners/ Proprietor. Margin Not applicable Special Features • Units facing liquidity crunch can avail this product for shoring up of working capital funds • Units planning to launch new products and require to spend on advertisement, promotion can avail this product.
DAL MILL PLUS:Details Eligibility • Units engaged in the activity of Dal Milling and having credit rating of SB-9 and above as per the bank's risk assessment. • Units must be profit making. • New established units are also eligible Purpose • Acquisition of machinery, modernizing the factory or setting up of additional facilities. • Working capital needs Facility • Term loan • Working capital(Fund Based & Non fund based facilities) • SME credit plus Quantum of Finance • Term loan is based on project cost • Working capital: Need based limit without any upper ceiling. Margin • Term loan 15% to 25% • Working capital 15% to 25% Interest Rate Interest is floating and linked to Base Rate, depending upon the size of the limit and value of collateral security. Repayment Period • Term loan - between 5 to 7 years excluding the moratorium period of 12 months. • Working capital loan for 12 months subject to satisfactory conduct of account. The limit is renewable after 12 months. Security •Primary : Hypothecation/Pledge over assets created out of Bank finance • For loans over 10 lakhs - Equitable mortgage of property/tangible securit
Doctor Plus:Target Group Medical practitioners of any discipline, promoters of hospitals, nursing homes, pathological clinics, polyclinics, X-ray labs, etc. Purpose To finance qualified medical practitioners For buying equipments (For dentists, the loan also covers dental implants besides equipments; for orthopaedists, the loan also covers various replacements/ implants for hip/ knee/ shoulder/ spine etc.) Setting up clinic, nursing home, pathology labs, drug store, ambulance, computers, vehicles, etc. Expansion/ renovation/ modernization of existing premises Type of facility Term Loan Cash Credit Quantum of finance Maximum- Rs 10 Crores subject to certain conditions. For individuals and proprietors maximum is Rs.5 Crores. Sub ceiling for working capital at -
10% of total loan amount for upto Rs.1 crore.
-
5% of total loan amount for above Rs.1 crore
For Non Allopathic doctors (Unani, Ayurvedic, Homeopathic): Maximum of Rs.10 lacs of which a sub ceiling for working capital limits at -
10% of total loan amount.
Margin Up to Rs. 10 lacs: 15% Above Rs.10 lacs upto Rs.5 crs: 20% Rs.5 crs. – Rs.10 crs: 25%. Rate of Interest Interest is floating and linked to Base Rate*.
Repayment Maximum period is 5 to 7 years depending upon the purpose. Processing Charges/ Upfront fee 50% of normal rate Security Primary Security- Hypothecation of assets financed by the Bank. Collateral: o For loan up to Rs.25 lacs: No tangible collateral security. Loan to be covered under CGTMSE guarantee scheme. o For loans above Rs.25 lacs: tangible security for at least 25% of the loan amount. However, eligible loans above Rs.25 lacs and upto Rs.1 Crore may be covered under CGTMSE guarantee scheme Insurance The assets created out of Bank’s finance are to be insured for the full value.
RENT PLUS:Target Group Owners of large commercial/ office spaces rented out to large corporate, MNCs, banks, PSUs etc. Eligibility Individuals/ partnership firms/ corporates Purpose To meet liquidity mismatches Type of facilities Term Loan Quantum of Finance : Minimum Loan amount is Rs 50,000/ Maximum Loan amount is Rs 10.00Cr Margin 40% Rate of Interest Interest is floating and linked to Base Rate Security Primary- Assignment of rent receivables. Power of attorney with the lessee to be obtained Collateral- Equitable Mortgage on building against the rentals of which the loan would be sanctioned or any other acceptable property of similar value. Insurance The property to be insured for the full value.
SBI SHOPPE:Target Group Present and prospective owners of shops/ offices/ show-rooms/ training centres/ service centres/ garages/ offices for Chartered Accountants / Consultants Eligibility Individuals /firms / partnerships / trusts / franchisees Purpose Purchase of new/old shops/establishments/offices. Modernization/expansion of establishments/shops, etc. All furniture/fixtures, electrical fittings and other accessories required for shops/showrooms/offices. Type of facilities Term Loan Quantum of Finance : Maximum of Rs.20 Lacs Margin 25% for purchase of new property. 40% in respect of purchase of old property. Rate of Interest Interest is floating and linked to Base Rate*. Repayment Period Maximum 7 years including moratorium period of 6 months. Security Primary- Hypothecation / pledge / mortgage / assignment of the assets purchased out of Bank's finances including non-industrial assets. Insurance
The assets created out of Bank’s finance are to be insured for the full value.
SCHOOL PLUS:Target Group Primary and Higher secondary schools Graduation, Under-Graduation and Post Graduation colleges Eligibility Government Aided Schools/ Colleges Private schools/ colleges Schools/ colleges run by trusts of good standing Technical institutes recognized by AICTE / NBA / MCI Purpose Loan for purchase of land for building/ playground, construction of school building/ auditorium, purchase of computer, books, furniture, repair/ renovation of existing building, purchase of sports equipment etc. Type of facilities Term Loan Quantum of Finance : No cap Margin 15% of the project cost Rate of Interest Interest is floating and linked to Base Rate*. Repayment Loan amount up to Rs.2 lacs – Repayable in 36 equated monthly installments. Loan amount from Rs.2 lacs to Rs.5 lacs – Repayable in 60 equated monthly installments.
Loan amount above Rs.5 lacs – Repayable in 84 equated monthly installments. Security Primary- Hypothecation of Assets purchased out of Bank finance. Collateral: o Personal guarantee of Promoters/ Trustees/ any other persons acceptable to Bank. o For loans upto Rs 10.00 lac, equitable mortgage of land and building, other immovable assets or guarantor for 20% of the loan amount. For loan above this amount, equitable mortgage of other immovable assets of the institute/ guarantor. Insurance The assets created out of Bank’s finance are to be insured for the full value.
SME COLLATERAL FREE LOAN:Details Eligibility New and existing Micro and Small Enterprises engaged in Manufacturing and Service sector. For Manufacturing sector, original investment in plant & machinery should be upto Rs 5 crore and for Service sector, original investment in equipment upto Rs 2 crore. Purpose • Working capital needs (Fund Based+ Non Fund Based). • Term loan for construction of Building, office, acquisition of machines / equipments including expansion and modernization of the unit. Facility • Cash Credit • Term Loan • Letter of Credit • Bank Guarantee Quantum of Finance Total Exposure to the unit : Upto Rs. 1.00 crore (All facilities WC, TL & NFB facilities) Interest Rate Attractive rates of interest* Service Charges • concession in processing and service charges. • Other charges as applicable. Security • Primary Security:- • Assets created out of bank finance • Existing assets of the borrower as per definition of CGTMSE
• No collateral • No third party guarantee Repayment Period • Working Capital (WC): One year, repayable on demand. Working capital limits will be renewed every two year. However, performance of the unit and conduct of account will be reviewed annually for continuation of limits. • Term Loan: Maximum Seven Years including moratorium period.
SME Credit Card:Eligibility Customers of the following segment with satisfactory track record for last 2 years Small industrial units Small retail traders Professionals & self employed Small business enterprises and transport operators Purpose To meet any kind of credit requirements including purchase of shops, equipments Type of Facility Cash Credit and/or Term Loan Loan amount Maximum - Rs. 10 lacs Margin 20% Rate of Interest Floating and linked to Base Rate*. Repayment Period Term loan repayable in maximum 5 years in suitable installments Working capital loan sanction valid for 3 years with annual review subject to satisfactory conduct of loan accounts
Security Primary: Hypothecation of stock in trade, receivables, machinery, office equipment Collateral: Nil (Eligible activities may be covered under CGTMSE guarantee scheme) Insurance The assets created out of Bank’s finance are to be insured for the full value Special features This product is for the units unable to provide elaborate financial data sought by banks for assessing credit needs. Stock statements for working capital loans are to be submitted once in a year only Working capital sanctioned is valid for 3 years subject to annual review. The Term Loan component should be repayable in a maximum of 5 years in suitable instalments.
SME OPEN TERM LOAN:Details Facility • The product is a pre-approved term loan facility which can be disbursed over a period of 12 months depending upon requirement of the unit. • The units get comfort of preapproved sanction to plan their capital expenditure and negotiate with suppliers of machinery to finalize the best possible terms and then get the loan disbursed. Target Group • All units under manufacturing sector. • Under Service sector: Educational Institution, Healthcare Industry (Hospital, Doctors, Pathological Labs, and Nursing Home), Hospitality Industry (Hotels, Restaurants, and Health Club etc), and Transport Operators . Purpose Any genuine commercial purposes in line with regular business activity of the customer. These would include • Expansion and modernization. • Substitution of high cost debts/ high cost term debts of other banks/FIs. • Design and introduction of new lay-outs in the factory to enhance productivity. • Up gradation of technology & energy conservation schemes/ machinery. • Acquisition of software, hardware, consumable tools, jigs, fixtures, vehicles, equipment , furniture upholstery etc.
• Acquisitions of ISO & other similar certifications. • Visits abroad for acquiring technology, finalizing business deals, participating in exhibitions/ fairs for market promotion etc. • R&D activities of the units in overall business development objective Quantum of Finance Maximum Rs 2.50 crore for both manufacturing and services enterprises, subject to credit rating and purpose of the loan. Margin Minimum 10% Repayment Period 3- 5 years. Interest Rate Floating rate linked to Base Rate. Security • Primary Security: Hypothecation / pledge of the assets proposed to be purchasedout of the term loan. • Collateral Security: - Extension of charge over current assets, fixed assets, and other existingcollateral if any. - Personal guarantees of propreitor/partners/promoters.
SME SMART SCORE:Details Eligibility Scheme is available to small and medium enterprise units engaged in manufacturing, trade or services. Purpose Working Capital requirements & Purchase of fixed assets like land, building, plant & machinery. Facility Working capital & Term loan Quantum of Finance • For manufacturing units total limits upto Rs 50 lacs • For trade & services units total limits upto Rs 25 lakhs. Margin 25% for working capital and 33% for Term Loan Interest Rate Floating Rate and linked to Base Rate Repayment Period • Term loan to be repaid in 5 years excluding moratorium not exceeding 6 months • Working Capital loan to be renewed every two years and reviewed annually subject to satisfactory conduct of account. Security • Primary: Hypothecation of stocks and assets financed by Bank • Collateral: Extension of charge over current assets, fixed Assets and otherexisting collateral, Personal guarantees of the promoters/partners of the unit. Insurance
The assets created out of Bank?s finance are to be insured for the full value. Special Features • A simplified loan application format • Concessionary rate of interest • Quick and hassle-free loan sanction process
STREE SHAKTI SCHEME Details Eligibility 1. Women Entrepreneurs in • Retail trade • Business enterprises • Professionals and self employed like Doctors, Beauty Parlour operators etc. • Small-scale units or tiny units. 2. The units run by women entrepreneur should undergo EDP (Entrepreneurial development programme) training conducted by state level agencies. Facility Term loan and working capital loan Quantum of Finance • Retail Traders: Rs. 50000 to Rs.2 Lacs • Business enterprises: Rs. 50000 to Rs.2 Lacs • Professionals: Rs. 50000 to Rs.25 Lacs • SSI: Rs. 50000 to Rs.25 Lacs Margin Reduced margin Interest Rate Floating rate and linked to base rate. Security • Primary: Stocks / Machinery purchased out of banks finance • Collateral:No collaterals for SSI Loans up to Rs.10 Lac. Eligible units may be covered under CGTMSE (Credit Guarantee Fund rust for Micro and Small
Enterprises), for others, collaterals should be provided.
TRADERS EASY LOAN (TEL):Target Group · Loan to traders and persons engaged in service sector against mortgage of property. Eligibility · Existing customers with a satisfactory track record. · New connections including take-over. · First generation entrepreneurs as well as promoters of existing units Purpose · Loan can be availed for normal day to day business requirements or for purchase of equipments/ fixed assets. Type of facilities · Cash Credit/ Term Loan/ Demand Loan Quantum of Finance : · Upto Rs 5.00 Cr Margin · 35% of the property value Rate of Interest · Attractive rate of interest. Interest rate is linked to Base Rate Security · Primary- Hypothecation of stocks and receivables, and /or assets acquired of bank finance. · Collateral- Tangible security of minimum of 154% of loan amount in the form of Equitable Mortgage of land and building Insurance
· The assets created out of Bank’s finance are to be insured for the full value. Special features · Simplified Assessment · User friendly
WEAVERS CREDIT CARD:Target Group Weavers and ancillary workers involved in weaving activities in the handloom sector Eligibility • All weavers and ancillary workers involved in weaving activities • Preference will be given to weavers identified under Third Census of Handloom weavers conducted by Development Commissioner, Ministry of Textile as well as to weavers identified by State Governments and weavers who have formed society/Self Help Group (SHGs)/Joint Liability Groups (JLGs). • Existing customers of bank enjoying credit facility and having satisfactory record. • Possession of Photo Id Card issued by Development Commissioner (Handloom) or the State Government is a necessary pre-condition for availing this loan. Purpose For working capital requirement as well as purchase of tools and equipment required for carrying out weaving activity. Facility Term loan and cash credit Quantum of Finance Upto Rs 2 lacs Margin • Upto Rs 25000: Nil • Above Rs 25000: 20%
Interest Rate Linked to Base Rate. Repayment Period • Term loan repayable in 3 years. • Cash credit limit to be renewed in 3 years with annual review subject to satisfactory conduct of account. Security • Primary: Hypothecation of assets financed by the Bank. • Collateral: Nil. Account will be covered under CGTMSE guarantee coverage. Special Features • Cash support is being offered to weavers in the following forms - Margin money support up to Rs 42,000/- per weaver and/or - Interest subsidy up to 3% on Bank loan And/or - Reimbursement of one time guarantee fee as applicable (1% at present) and annual service charges as applicable (0.50% at present) for a period upto 3 years payable for guarantee cover under CGTMSE. • New units are also eligible • No need of financial statements for purpose of annual review of sanction. • Loan Passbook will be issued to borrower.
CHAPTER-4 PRATCIAL STUDY ABOUT SME LOANS
Classification of costumers:Table4.1 T N Percentage of customers yo p e. o o f f c cu u s st to o m m e er rs s
I912 n d i v
i d u a l s B 233.33 u5 s i n e s s w 113.33 h0 o l e s a l e r s S113.33 m 0 a l l
s c a l e i n d u s t r i e s H 45.33 o s p i t a l s s122.68 c7 h o
o l s T 7100 o5 t a l s
Graph4.1
INTERPRETATION:Out of members surveyed 12% of people are individuals, 33.33% of people are business,13.33% are wholesaler,13.33%are small scale industries,5.33% are hospitals,22.68% are schools Table4.2
Classification of customers of public sector banks:T N In percentage
yo p eo f o fc u cs u t so tm o e m r e ri sn p u b l i c s e c t o r b a n
k s
I913.63 n d i v i d u a l s 231.81 B
u1 s i n e s s 913.63 w
h o l e s a l e
r s S69.09 m a l l s c a l e i n d u s t r i e s 46.06 H
o s p i t
a l s s125.78 c7 h o o l s 6100 T
o6 t a l s Graph4.2
INTERPRATION:-
Out of members survyed 13.63% of people are individuals ,31.81% of people are business,13.63% are wholesaler,9.09%are small scale industries,6.06% are hospitals,25.78% are schools
Table4.3 Classification customers of private sector bank:N T In percentage yo p eo f o fc u cs u t so tm e o m r es r si n p r i v a t e
s e c t o r b a n k s
I00 n d i v i d u a l s 444.44 B
u s i n e s
s 111.11 w
h o l e s a l e r s S444.45 m a l l s c a l e i n d u s t
r i e s 00 H
o s p i t a l s S00 c h o o l s 9100 T
o t a l s
Graph4.3
INTERPRATION-:-
Out of members surveyed 44.44% of people are business,11.11% are wholesaler,44.45%are small scale industries.
TABLE 4.4, Length of customer’s of public sector banks T L I6IA In percentageTotal in percentage yenn b p sto esp o p v eee o tr1r fh c5c1 aee5 cn n yn otety s5aaae tg rg a u yeser m es ea rr ss ’ I22552 2.22100 n25 d.. i25 v25 i
d u a l s B 158314.76100 u278 s.. i10 n49 e s s W 55222 2.22100 h52 o.. l52 e52 s a l e r s S 23351 6.66100 m 30 a. l3 l3 s c a
l e i n d u s t r i e s H 25250 100 o00 s p i t a l s S 52170 100 c920 h.. o45 o18 l s
ss
INTERPRATION:From the above table we observe that different types of costumers of public sector banks from less than 5 years among them 22.22% of costumers are individuals 57.14% are costumers business 55.55% costumers are schools. consumers of public sector banks from less than 5 years to 15 years among them 55.55%of costumers are individuals. 38.09%are costumers are business.22.22% of costumers are wholesalers 50% of costumers are hospitals 50% costumers are small scale industries and 50% are schools From the above table we observe that different types of costumers of consumers of public sector banks from above 15 years among them 22.22% of costumers are individuals 4.76% of costumers are business ,22.22% are wholesalers 16.66%small scale industries
TABLE 4.5 Type of customers in private sector banks TLI6IA In percentageTotal percentage yennb psto espopv eee otr1r fhc5c1 aee5 cnnn utt s5aa tgg oee m e r s
I000000100 n d i v i d u a
l s 2512125100 B
u05 s i n e s s 110000100 w
h0 0
o l e s a l e r s
S371200100 55 m
a l l s c a
l e i n d u s t r i e s 000000100 H
o s p i t a l s s000000100 c h o o l s
Chart 4.5
INTERPRATION:From the above table we observe that different types of costumers of private sector banks from less than 5 years among 50% of costumers are business .100% of costumers wholesalers, 75% of costumers are small scale industries so maximum number of costumers of private sector banks in below 5 years are 50% are business and minimum are individuals, schools, hospitals. From the above table we observe that different types of costumers of private sector banks that is from industries that is 25%
6 to 15 years.25% of costumers are business, and small scale From the above table we observe that different types of
costumers of private sectors banks from the above 15 years among them 25% of consumers are business
Table 4.6 Requirements of current account by various users TIn percentage yN p o e . o o ff cp o e so tp u l m e e r s
I00 n d i v
i d u a l s 110 B
u s i n e s s 220 w
h o l e s a l e r s S330 m a l l
s c a l e i n d u s t r i e s 00 H
o s p i t a l s S440 c h o
o l s 1100 T
o0 t a l s
Chart 4.6
Interpretation:The above table represents the requirements of current account by various types of users out of 6 type of costumers ,business people who require a current account constitute to 10%.wholesalers people who require a current account constitute to 20% small scale industries people who requires current account constitute to 30%.school people who require a current account constitute to 40% here we observe that maximum people who requires current account are schools that 40%schools and minimum is individuals and hospitals.\ T a
b l e 4 . 7 Requirements of Pos machine by various users T N y o p e . o o f f p c e o s p tl u e m e r s
In percentage
I3
42.85
n d i v i d u a l s 1 B
u s i n e s s
14.28
0 w
h o l e s a l e r s
0
0 S
m a l l s c a l e i n d u s t r i e s
0
2 H
28.57
o s p i t a l s s1
14.37
c h o o l s 7 T
100
o t a l s
Chart4.7
Interpretation:The above table represent the requirements of pos machine by various types of users out of 6 type of costumers individuals are 42.85%, business people who require a pos machine constitute to 14.28% .wholesalers’
people who require a
pos machine constitute to
0%s.mallscale industries people who require a pos machine constitute to 0% .hospital people who require a pos machine constitute to28.57% schools people who require a pos machine constitute to 14.37%.here we observed that maximum people who requires pos machine are individuals that 42.85% and minimum is wholesalers and small scale industries people Table4.8 Requirements of cash credit limit by various users T N In percentage yo p e. o o f f p ce o o sp tl u e m e r s
I00 n d i v i d u
a l s 350 B
u s i n e s s 233.33 w
h o l e s a l e r s S116.67 m a l l s c
a l e i n d u s t r i e s 00 H
o s p i t a l s s00 c h o o l s
6100 T
o t a l s
CHART 4.8 INTERPRATION:-
The above table represent the requirements of cash credit limit by various types of users out of 6 type of costumers business people who require cash credit limit constitute to 50% .wholesalers’ people who require a cash credit limit constitute to 33.33% ,small-scale industries people who require a cash credit limit constitute to 16.67% , here we observed that maximum people who requires cash credit limit are business that 50% and minimum is hospitals ,individuals and school Table4.9 Requirements of term loans by various users T N In percentage yo p e. o o f f p ce o o sp tl u e m e
r s
I00 n d i v i d u a l s 120 B
u s i n e s s 240 w
h o l e s a l e
r s S120 m a l l s c a l e i n d u s t r i e s 00 H
o s p i t
a l s s120 c h o o l s 5100 T
o t a l s
CHART 4.9
INTERPRATION:-
The above table represent the requirements of term loans by various types of users out of 6 type of costumers business people who requires a term loan constitute to 20%.wholesale people who requires term loan constitute to 40%.small scale industries people who require a team loan constitute to 20%.school people who require a term loan constitute to 20% here we observe that maximum people who requires term loan are that 40% wholesalers and minimum is individuals ,hospitals. Table4.10 Requirements of SMS facility by various users T N In percentage yo
p e. o o f f p ce o o sp tl u e m e r s
I321.42 n d i v i d u a l s 214.28 B
u s i n e
s s 321.42 w
h o l e s a l e r s S214.28 m a l l s c a l e i n d u s
t r i e s 00 H
o s p i t a l s s428.60 c h o o l s 1100 T
o4 t a l s
Chart 4.10
INTERPRATION:-
The above table represent the requirements of cash credit limit by various types of users out of 6 type of costumers individuals are 21.42%,business people who require a s m s facility constitute to 14.28%.wholesalers people who require a s m s facility constitute to 21.42% small scale industries people who requires a s m s facility constitute to 14.28% ,school people who requires a s m s facility constitute to 28.60% here we observed that maximum people who requires s m s facility are that 28.60% schools and minimum is hospitals Table 4.11 Requirements of internet by various users T N In percentage yo p e. o o f f p ce o o sp tl u e m e r s
I330 n d i v i
d u a l s 110 B
u s i n e s s 00 W
h o l e s a l e r s S00 m a l l
s c a l e i n d u s t r i e s 220 H
o s p i t a l s S440 c h o o
l s 1100 T
o0 t a l
Chart 4.11
INTERPRATION:-
The above table represent the requirements of internet by various types of users out of 6 type of costumers individuals are 30%, business people who require a internet constitute to 10% ..Hospital people who require a internet constitute to20% schools people who require a internet constitute to 40%.here we observed that maximum people who requires internet are that 40% schools and minimum is wholesalers ,small-scale industries. Table 4.12 Requirements of insta cash deposit by various users T N In percentage yo p e. o o f f p ce o o sp
tl u e m e r s
I233.33 n d i v i d u a l s 233.33 B
u s i n e s s 116.66 w
h o l e s
a l e r s S00 m a l l s c a l e i n d u s t r i e s 00 H
o s
p i t a l s s116.68 c h o o l s 6100 T
o t a l s
Chart 4.12
INTERPRATION:-
The above table represent the requirements of insta cash deposit by various types of users out of 6 type of costumers individuals are 33.33%, business people who require a insta cash deposit constitute to 33.33% .wholesalers people who require a insta cash deposit t constitute to 16.66% schools people who require a insta cash deposit constitute to 16.68%.here we observed that maximum people who requires insta cash deposit are that 33.33% individuals ,business and minimum is wholesalers, small-scale industries ,hospital TABLE 4.13
Requirements of business debit card various users by TIn percentage yN p o e . o o ff cp o e so tp u l m e e r s
I00 n d i v i d u a l s 120 B
u s
i n e s s 240 w
h o l e s a l e r s S120 m a l l s c a l e i n
d u s t r i e s 00 H
o s p i t a l s s120 c h o o l s 5100 T
o t a l s
Chart 4.13
INTERPRATION:-
The above table represent the requirements of business debit card by various types of users out of 6 type of costumers. Business people who requires a business debit card constitute to 20%.wholesalers people who requires a business debit card constitute to 40% small scale industries people who require a business debit card constitute to 20%.school people who requires a business debit card constitute to 20% here we observed that maximum people who requires business debit card are wholesalers that 40% schools and minimum is individuals hospitals. TABLE4.14 Preference of branch by costumers T N In percentage yo p e. o o f f p b e ro ap n l ce h 125.33 M
a9 i n
b r a n c h F230..66 o3 r t b r a n c h 233.35 B
a5 z a r b r a n c h 34 D
a s a n n a p e t a b r a n c h 11.33 C
o n t o r m e n t b r a
n c h 11.33 R
i n g r o a d b r a n c h 00 C
o u r t c o m p l
e x 34 R
. T . C c o m p l e x 7100 T
o5 t a l
CHART 4.14
INTERPRATION:-
The above table represent the requirements costumers’ among 75 members surveyed,25.33% of people are nearest to main branch,30.66% of people are nearest to fort branch,33.35% of people are nearest to bazaar branch,4% of people are nearest
to
dasannapeta branch,1.33% of people are nearest to cantonment branch,1.33% of people are nearest to ring road branch,4% of people are nearest to r .t. c branch so here we observed that
maximum number of people are nearest to bazaar branch that is 33.35% and minimum related to court complex.
FINDINGS
Out of 75 members 66 members are related to public sector banks and remaining are related ton private sector From the above analyses we concluded that requirements of current account facilitates by various users are 10 members, requirements of pos machine facilities by various users are 7 members ,requires of cash credit limit facilities by various users are 6 members, requirements of term loan facilities by various users sre 5 members, requirements of s m s facilities by various users are 14 members, requirements of insta cash deposit facilities by various users are 6 members. From the above analyses we concluded that requirements of main branch facilities by various respondents are 25.33%,requirements of fort branch by various respondents are 30.66% requirements of bazaar branch facilities by various respondents are 33.35% requirements of dasanapeta branch facilities by various respondents are 4% requirements of contorment branch facilities by various respondents are 1.33% requirements of ring road branch facilities by various respondents are1.33% requirements of r.t.c branch facilities by various respondents are 4%.
SUGGESTIONS
It is recommended to decrease the interest rates as well as margin levels of the schemes for better results Since most of the respondents are illiterates the s.b.i society has to educate the respondents regarding the S.b.i schemes and facilitates It is recommend to force on scheme awareness among the respondents It is recommended to extent credit facility to respondent by introducing new schemes. It is recommend to focus of s.b.i by creating awareness among the respondents.
BIBLOGRAPHY:-
Marketing management
S.nama kumara
Marketing management
Philip kotler
Marketing management
v.s.rama swamy
WEBSITES:www.sbi.com www.sme.com
