PREFACE

I am extremely happy to place before the esteemed teacher BANKING

FINANCIAL INSTITUTE IN INDIA. It is an attempt make by me to find out the
leading brands in Sagar City.
The Project Report has on objective to get the B.B.A. Studetns
familiar with real life buisness situations and gives an opportunity to the
students to understand the theoretical concepts of marketing and finance in
practical way.
The research starts with a short introduction of the company
followed by the line of the objective and research methodology.
Next Chapter Deals with the data analysis and interpretation that is
based on questionnaire. Then comes the limitation, suggestions conclusion of
the research report.
Students name : ANIL PATEL
Class :BBA VTH SEM.

ACKNOWLEDGEMENT
I Wish to express my deep sense of gratitude to all who generously helped in
successful completion of the project work by sharing their valuable time and
knowledge.
I t thankfully acknowlege Mr. Manish Jain (HOD BBA Dept) GIMS Sagar for
giving me the opportunity to conduct and survey.
I Would like to express my sincere thanks to MR. MANISH JAIN
LecturerBBA Dept) and all other faculty members, GIMS sagar who directly and
indirectly rendered me all possible hlep and guidance for preparing the report.
Finally I would like to thanks my parents, my friends without whom completion
of my project report would not have been possible.

Students name : ANIL PATEL

Class :BBA VTH SEM.

CERTIFICATE
A PROJECT REPORT ON BANKING FINANCIAL INSTITUTE IN INDIA
is prepared by ANIL PATEL under The guidance of MR. MANISH JAIN is a
satisfactory in respect to comments

Contents and presentation of the Subject Matter.

Language
Submission with in due date.

Signature of Supervisor

Signature of Examiner

Signature

of

HOD

DECLARATION BY THE CANDIDATE

Date:
I declare that the project report titled BANKING FINANCIAL INSTITUTE IN
INDIA is my own work conducted under the supervision of MR. MANISH
JAIN, Gyanveer Institute of Management and Science Sagar. To the best of
my knowledge the report does not contain any work, which has been
submitted for the award of any degree, anywhere.

Students name : ANIL PATEL

Class :BBA VTH SEM.

TABLE OF CONTENTS
Preface
Acknowledgement
Certificate
Declaration by the Candidate
TOPIC NAME

PAGE
NO.

CHAPTER 1 INTRODUCTION
(A) COMPANY PROFILE
(B) HISTORY
(C) KEY PERSON
CHAPTER 2 OBJECTIVE
CHAPTER 3 RESEARCH METHODOLOGY
(A) TYPE OF RESEARCH
(B) SOURCE OF RESEARCH
CHAPTER 4 HOME LOAN SERVICE
CHAPTER 5 DATA ANALYSIS AND INTERPRETATION
CHAPTER 6 SWOT ANALYSIS
CHAPTER 7 LIMITATION
CHAPTER 8 SUGGESTION AND CONCLUSION
CHAPTER 9 BIBLIOGRAPHY
CHAPTER 1011 QUESTIONNAIRE

INTRODUCTION
While walking in the streets of any town or city you might have seen some signboards on
buildings with names-Canara Bank, Punjab National Bank, State Bank of India, United Commercial
Bank, etc. What do these names stand for? Did you ever try to know about them? If you enter any
such building you will find some kind of a business office. You will see some employees sitting
behind counters dealing with visitors standing in front of them. You will find that some are
depositing money at one counter while some are receiving money at another counter. Behind the
counters in the office you will see tables and chairs occupied by officers. On one side of the office
you will also see a chamber (small partitioned room) where the manager is sitting with papers on his
table.
This is the office of a Bank.
Let us know in detail about banks and their activities.
You know people earn money to meet their day-to-day expenses on food, clothing, education
6

of children, housing, etc. They also need money to meet future expenses on marriage, higher
education of children, house building and other social functions. These are heavy expenses, which
can be met if some money is saved out of the present income. Saving of money is also necessary for
old age and ill health when it may not be possible for people to work and earn their living.
The necessity of saving money was felt by people even in olden days. They used to hoard
money in their homes. With this practice, savings were available for use whenever needed, but it also
involved the risk of loss by theft, robbery and other accidents. Thus, people were in need of a place
where money could be saved safely and would be available when required. Banks are such places
where people can deposit their savings with the assurance that they will be able to withdraw money
from the deposits whenever required. People who wish to borrow money for business and other
purposes can also get loans from the banks at reasonable rate of interest.
Bank is a lawful organization, which accepts deposits that can be withdrawn on
demand. It also lends money to individuals and business houses that need it.
Banks also render many other useful services like collection of bills, payment of foreign bills, safekeeping of jewelery and other valuable items, certifying the credit-worthiness of business, and so on.
Banks accept deposits from the general public as well as from the business community. Any
one who saves money for future can deposit his savings in a bank. Businessmen have income from
sales out of which they have to make payment for expenses. They can keep their earnings from sales
safely deposited in banks to meet their expenses from time to time. Banks give two assurances to the
depositors
a. Safety of deposit, and
b. Withdrawal of deposit, whenever needed
On deposits, banks give interest, which adds to the original amount of deposit. It is a great
incentive to the depositor. It promotes saving habits among the public. On the basis of deposits banks
also grant loans and advances to farmers, traders and businessmen for productive purposes.
Thereby banks contribute to the economic development of the country and well being of the
people in general. Banks also charge interest on loans. The rate of interest is generally higher than
the rate of interest allowed on deposits. Banks also charge fees for the various other services, which
they render to the business community and public in general. Interest received on loans and fees
charged for services which exceed the interest allowed on deposits are the main sources of income
for banks from which they meet their administrative expenses.
The activities carried on by banks are called banking activity. Banking as an activity
involves acceptance of deposits and lending or investment of money. It facilitates business activities
by providing money and certain services that help in exchange of goods and services. Therefore,
banking is an important auxiliary to trade. It not only provides money for the production of goods
and services but also facilitates their exchange between the buyer and seller.
You may be aware that there are laws which regulate the banking activities in our country.
Depositing money in banks and borrowing from banks are legal transactions. Banks are also under
the control of government. Hence they enjoy the trust and confidence of people. Also banks depend a
great deal on public confidence. Without public confidence banks cannot survive.
The development of banking in an inevitable precondition for the healthy and rapid
development of the national economic structure. Banking institutions have contributed much to the
development of the developed countries of the world. Today we cant imagine the business world
without banking institutions. Banking is as important as blood in the human body. Due to the
7

development of banking advances are increased and business activities developing so it is rightly
said, The development of banking is not only the root but also the result of the development of
the business world. After independence, the Indian government also has taken a series of steps to
develop the banking sector. Due to considerable efforts of the government, today we have a number
of banks such as Reserve Bank of India, State Bank of India, nationalized commercial banks,
Industrial Banks and co-operative banks. India Banks contribute a lot to the development of
agriculture, and trade and industrial sectors. Even today the banking systems of India possess certain
limitations, but one cant doubt its important role in the development of the Indian economy.
Banking sector is the first and most important aspect of the economic-planning of a nation for
the faster and speedy development of a nation; well-development and advanced banking sector is the
precondition. In the most of developed countries of the world, there is very close relation between
the business activities and banks. It is quite difficult to think the business activities without the
existence in economy as blood in human body.
Thus, we can say that, there is a noteworthy contribution of banking sector in the
development of various fields such as, agriculture, industries business activities, transportation and
communication.

The word bank is derived from, the Latin word Bonous or Banca means a bench. A bank refers to
the function of accepting deposits, lending, repaying the deposited money of demand and functioning
an agent whenever asked for. Now for healthy and rapid development of any national economical
structure, the development of banking is an inevitable pre-condition.
Some authorities observe that the word bank s originally derived from the German word
bank which means a joint stock fund. This word was Italianized into banco by the German when
they were the rulers of measure part of Italy. This term was again change into banck by the French;
afterwards, the Britishers converted this term into bank which has now been universalized. The
term bank or banker is used in almost all countries of the world to denote a financial institution
dealing in money.
There are different views regarding the origin of the term bank In ancient Greece and Rome
8

the practice of granting credit was widely prevalent. The books of the old Sanskrit law giver, Menu,
are full of regulations governing credit. In, past (I) traders (II) ledgers and (III) goldsmiths performed
banking activities. Some experts opine that the term, bancus or banque means bench, and the
term bank comes from these words. Ancient bankers and lenders used benches in the market place
to do their lending business. When a banker failed in his business, the people broke his benches. The
term, bankrupt, originated from such events.

A bank is an institution which deals in money. A Bank receives money in the form of deposits from
the public, and lends money for the development of trade and commerce. Several economists have
defined the term, baking, in various ways. From various definitions some of them as follow:
Banking company is a company, which transects the business of banking in any state of
India.
Section S (5) of banking company act 1949.
A bank or banker is one who, in the ordinary course of his business, receives money
which he repays by honoring the cheques of persons from whom or on whose account he receives it.
Hart Pofr.
Bank is an establishment which makes, to individuals, such advances of money as may be
required and safely made and to which individuals entrust money which it is not required by them for
use.
Prof. Kenly
Banking means where financial transactions of credit are done and bank means where draft,
cheque, or credit paid by order, deposits of money or currency are accepted or assets, bonds, gold,
silver, bills of exchange or promissory notes are accepted that kind of persons firms or companies
having the place of business.
Findlay sheraze

"Banking business" means the business of receiving money on current or deposit account,
paying and collecting cheques drawn by or paid in by customers, the making of advances to
customers, and includes such other business as the Authority may prescribe for the purposes of this
Act;
(Banking Act (Singapore), Section 2, Interpretation)
"banking business" means the business of either or both of the following:

1. receiving from the general public money on current, deposit, savings or other similar account
repayable on demand or within less than [3 months] ... or with a period of call or notice of
less than that period;
2. paying or collecting cheques drawn by or paid in by customers
Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale), direct credit, direct debit
and internet banking, the cheque has lost its primacy in most banking systems as a payment
instrument. This has led legal theorists to suggest that the cheque based definition should be
broadened to include financial institutions that conduct current accounts for customers and enable
customers to pay and be paid by third parties, even if they do not pay and collect cheques.

Banks act as payment agents by conducting checking or current accounts for customers, paying
cheques drawn by customers on the bank, and collecting cheques deposited to customers' current
accounts. Banks also enable customer payments via other payment methods such as telegraphic
transfer, EFTPOS, and ATM.
Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits,
and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances
to customers on current accounts, by making installment loans, and by investing in marketable debt
securities and other forms of money lending.
Banks provide almost all payment services, and a bank account is considered indispensable by most
businesses, individuals and governments. Non-banks that provide payment services such as
remittance companies are not normally considered an adequate substitute for having a bank account.
Banks borrow most funds from households and non-financial businesses, and lend most funds to
households and non-financial businesses, but non-bank lenders provide a significant and in many
cases adequate substitute for bank loans, and money market funds, cash management trusts and other
non-bank financial institutions in many cases provide an adequate substitute to banks for lending
savings to

10

In the economic development of a nation banks occupy an important place. Indian money market
comprises both organized as well as unorganized sectors. The unorganized sectors include money
lenders and indigenous bankers and largely cater to the needs of person living in villages and small
towns. Financial institutions in the organized sector have grown significantly. Among the institution
in organized sector of the Indian money market commercial banks, Co-operative banks, regional
rural banks, development banks etc.
In 1770, first Indian bank known as Bank of Hindustan was started and was closed down
twenty years later. Later on, the East India Co. started three presidency banks with government
participation. These were:
Bank of Calcutta
Bank of Bombay
Bank of Madras

1806
1840
1843

Other banks such as

Allahbad Bank came into existence in 1865
Alliance Bank of simla in 1875.
The first Indian joint stock bank known as Oudh Commercial Bank was setup in 1880 and
Punjab National Bank was launched in 1894. There were as many as 648 commercial banks in India
by the and of 1947 and as many as 161 banks failed during 1913-14. Thus, there was a great need of
an institution to control and regulate banking in the country. As a result, the RBI was setup in 1935
for regulating the banks in the country.
A scheme of social control on banks was enforced through statutory measures with effect
from 1-2-1969. The banking industry saw a revolution after 14 major commercial banks were
nationalized in June, 1982. More than 90 % of the bank deposits came under the control of the
government.
Agricultural Credit Development, Rural Planning and Credit Cell and Agricultural Refinance
and Development Corporation were combined together to setup national bank for agriculture and
rural development in July, 1982. Later, the Exim Bank and National Housing Bank were setup in
1984 and 1988 respectively.
RECENT HISTORY OF INDIAN BANKING
Indian banking system, over the years has gone through various phases after establishment of
Reserve Bank of India in 1935 during the British rule, to function as Central Bank of the country.
Earlier to creation of RBI, the central bank functions were being looked after by the Imperial Bank of
India. With the 5-year plan having acquired an important place after the independence, the Govt. felt
that the private banks may not extend the kind of cooperation in providing credit support, the
economy may need. In 1954 the All India Rural Credit Survey Committee submitted its report
recommending creation of a strong, integrated, State-sponsored, State-partnered commercial banking
institution with an effective machinery of branches spread all over the country. The recommendations
of this committee led to establishment of first Public Sector Bank in the name of State Bank of India
on July 01, 1955 by acquiring the substantial part of share capital by RBI, of the then Imperial Bank
of India. Similarly during 1956-59, as a result of re-organization of princely States, the associate
banks came into fold of public sector banking.
11

Another evaluation of the banking in India was undertaken during 1966 as the private banks
were still not extending the required support in the form of credit disbursal, more particularly to the
unorganized sector. Each leading industrial house in the country at that time was closely associated
with the promotion and control of one or more banking companies. The bulk of the deposits
collected, were being deployed in organised sectors of industry and trade, while the farmers, small
entrepreneurs, transporters , professionals and self-employed had to depend on money lenders who
used to exploit them by charging higher interest rates. In February 1966, a Scheme of Social Control
was set-up whose main function was to periodically assess the demand for bank credit from various
sectors of the economy to determine the priorities for grant of loans and advances so as to ensure
optimum and efficient utilization of resources. The scheme however, did not provide any remedy.
Though a no. of branches were opened in rural area but the lending activities of the private banks
were not oriented towards meeting the credit requirements of the priority/weaker sectors.
On July 19, 1969, the Govt. promulgated Banking Companies (Acquisition and Transfer of
Undertakings) Ordinance 1969 to acquire 14 bigger commercial bank with paid up capital of
Rs.28.50 Cr,deposits of Rs.2629 cr, loans of Rs.1813 cr and with 4134 branches accounting for 80%
of advances. Subsequently in 1980, 6 more banks were nationalised which brought 91% of the
deposits and 84% of the advances in Public Sector Banking. During December 1969, RBI introduced
the Lead Bank Scheme on the recommendations of FK Nariman Committee.
Meanwhile, during 1962 Deposit Insurance Corporation wasestablished to provide insurance cover to
the depositors.
In the post-nationalisation period, there was substantial increase in the no. of branches
opened in rural/semi-urban centres bringing down the population per bank branch to 12000 appx.
During 1976, RRBs were established (on the recommendations of M. Narasimham Committee
report) under the sponsorship and support of public sector banks as the 3rd component of multiagency credit system for agriculture and rural development. The Service Area Approach was
introduced during 1989.
While the 1970s and 1980s saw the high growth rate of branch banking net-work, the
consolidation phase started in late 80s and more particularly during early 90s, with the submission of
report by the Narasimham Committee on Reforms in Financial Services Sector during 1991.
In these five decades since independence, banking in India has evolved through four distinct phases:
Foundation phase can be considered to cover 1950s and 1960s till the nationalisation of banks in
1969. The focus during this period was to lay the foundation for a sound banking system in the
country. As a result the phase witnessed the development of neces sary legislative framework for
12

facilitating re-organisation and consolidation of the banking system, for meeting the requirement of
Indian economy. A major development was transformation of Imperial Bank of India into State Bank
of India in 1955 and nationalisation of 14 major private banks during 1969.
Expansion phase had begun in mid-60s but gained momentum after nationalisation of banks and
continued till 1984. A determined effort was made to make banking facilities available to the masses.
Branch network of the banks was widened at a very fast pace covering the rural and semi-urban
population, which had no access to banking hitherto. Most importantly, credit flows were guided
towards the priority sectors. However this weakened the lines of supervision and affected the quality
of assets of banks and pressurized their profitability and brought competitive efficiency of the system
at a low ebb.
Consolidation phase: The phase started in 1985 when a series of policy initiatives were taken by
RBI which saw marked slowdown in the branch expansion. Attention was paid to improving housekeeping, customer service, credit management, staff productivity and profitability of banks.
Measures were also taken to reduce the structural constraints that obstructed the growth of money
market.
Reforms phase The macro-economic crisis faced by the country in 1991 paved the way for
extensive financial sector reforms which brought deregulation of interest rates, more competition,
technological changes, prudential guidelines on asset classification and income recognition, capital
adequacy, autonomy packages etc.

BANK NATIONALISATION & PUBLIC SECTOR BANKING

Organised banking in India is more than two centuries old. Till 1935 all the banks were in
private sector and were set up by individuals and/or industrial houses which collected deposits from
individuals and used them for their own purposes. In the absence of any regulatory framework, these
private owners of banks were at liberty to use the funds in any manner, they deemed appropriate and
resultantly, the bank failures were frequent.
Move towards State ownership of banks started with the nationalisation of RBI and passing
13

of Banking Companies Act 1949. On the recommendations of All India Rural Credit Survey
Committee, SBI Act was enacted in 1955 and Imperial Bank of India was transferred to SBI.
Similarly, the conversion of 8 State-owned banks (State Bank of Bikaner and State Bank of Jaipur
were two separate banks earlier and merged) into subsidiaries (now associates) of SBI during 1959
took place. During 1968 the scheme of social control was introduced, which was closely followed
by nationalisation of 14 major banks in 1969 and another six in 1980.
Keeping in view the objectives of nationalisation, PSBs undertook expansion of reach and
services. Resultantly the number of branches increased 7 fold (from 8321 to more than 60000 out of
which 58% in rural areas) and no. of people served per branch office came down from 65000 in 1969
to 10000. Much of this expansion has taken place in rural and semi-urban areas. The expansion is
significant in terms of geographical distribution. States neglected by private banks before 1969 have
a vast network of public sector banks. The PSBs including RRBs, acount for 93% of bank offices and
87% of banking system deposits.

Indian banking system comprises of both organized and unorganized banks. Unorganized
banking includes indigenous bankers and village money lenders. Organized banking includes the
following,
The main four types are:
Reserve bank of India (central bank)

Commercial banks

Co-Operative banks

Development banks

Others are:
Exim banks

Regional rural banks

Land development banks

National Bank for Agriculture and Rural Development

14

(NABARD)

Industrial Development Bank of India

Small Industrial Development Bank of India

STRUCURE OF BANKING IN INDIA

Bank for Agriculture and Rural Development

15

MISSION
I.

World Class Indian Bank

II.

Benchmarking against international standards.

III.

To build sound customer franchises across distinct businesses

IV.

Best practices in terms of product offerings, technology, service levels, risk management and
audit & compliance
VISION STATEMENT OF HDFC BANK

The HDFC Bank is committed to maintain the highest level of ethical standards, professional
integrity and regulatory compliance. HDFC Banks business philosophy is based on four core values
such as:1. Operational excellence.
2. Customer Focus.
3. Product leadership.
4. People.
The objective of the HDFC Bank is to provide its target market customers a full range of financial
products and banking services, giving the customer a one-step window for all his/her requirements.
The HDFC Bank plus and the investment advisory services programs have been designed keeping in
mind needs of customers who seeks distinct financial solutions, information and advice on various
investment avenues.

16

OBJECTIVE OF THE STUDY

o To study how to choose the right housing finance bank.
o To study how do get loan for construction of residential houses.
o To discuss housing credit more affordable.
o To know the some of housing finance schemes.
o To discuss some tip for buying house.
o To study of terms and condition of home loan.
o To find out that how people to construction of houses by attractive EMI
systems.

17

RESEARCH METHODOLOGY
According to Green and Tall A research design is the specification of the methods and procedures
for acquiring the information needed. It is the overall operational pattern or framework of the project
that stipulates which information is to be collected, from where it is to be collected and by what
procedures
This research process based on primary data analysis and secondary data analysis will be clearly
defined to meet the objectives of the study.

I chose the primary sources to get the data. A questionnaire was designed in accordance with
our mentor in Banking. I chose a sample of about 45 corporate customers around the Sagar
City from which I can get the instant information of whose analysis will give me the desired
outcome of my research project.

I collected some data from the secondary sources like published Company documents,
internet etc.

Research Design
A research design is the arrangement of conditions for collections and analysis of data in a manner
that aims to combine relevance to the research purpose with economy in procedures. It is a
descriptive cross sectional design .It is the conceptual structure with in which research is conducted;
it constitutes the blueprint for the collection, measurement and analysis of data.
It is needed because it facilitates the smooth sailing of the various research operations, thereby
making research as efficient as possible yielding maximal information with minimal expenditure of
effort, time and money.
In the preliminary stage, my research stage constituted of exploratory study by which it is clear that
the existence of the problem is obvious .So, I can directly head for the conclusive research.
Sampling Plan
Sampling plan is a distinct phase of research process. In this stage I have to determine who is to be
sampled, how large should be the needed sample and how sampling unit is to be selected.
Population
In my research, I have defined my population as a complete set of customers of Sagar City
18

Sample Survey
As compared to census study, a sample study has been conducted by us because of:
Wide range of population, it was impossible to cover the whole population
Time and money constraints.
Sample Unit
In this survey I took the list of customers from the dealers of HDFC in Sagar City.
Sampling Technique
Sampling technique implies the method of choosing the sample items, the two methods of selecting
sample are:
Probability method.
Non-probability method.
Probability method is those in which every item of the universe has an equal chance of the
inclusion in the sample. Non-probability methods are those that do not provide every item in the
universe with known cause of being included in the sample. The selection process is partially
subjective.
For my study, I employed the Non-probability sampling technique, in which I got the data of the
customers from the dealer of HDFC in Sagar City Instrument of collection of data
I have used one set of questionnaire to collect data from the customers. This questionnaire is
structured and highly ordered. This includes both close ended and open ended questions. The close
ended questions included both dichotomous and multiple choice questions.
Data analysis and interpretations
Large volumes of raw data were collected through questionnaires in my research study. This raw data
has been further converted into significant statistical information before further interpretation so that
I can answer my research objective well.
The collected raw data was then edited and coded by the researchers to eliminate errors and
to assign data to pertinent categories. The data was then tabulated and presented with the help of bar
diagrams and pie charts.

19

NATIONALIZED BANKS:
Following 14 commercial banks were nationalized on the 19th July, 1969.
Bank of India

Canara Bank

Central Bank of India

Corporation bank

Indian Bank

Indian overseas bank

Syndicate Bank

UCO Bank

Allahabad Bank

Bank of Baroda

Bank of Maharashtra

Dena Bank

Oriental Bank of Commerce

Punjab & Sind Bank

Union Bank of India

United Bank of India

Vijaya Bank

IDBI Bank

Other six banks were nationalized on the 10th April, 1980.

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of Mysore

State Bank of Indore

State Bank of Pateyala

State Bank Of Saurashtra

State Bank of Travancore

20

In October 1993, the New Bank of Indian and Punjab National Bank were merged.
PRIVATE SECTOR BANKS:
HDFC Bank

ICICI Bank

Federal Bank

ING Vysya Bank

Axis Bank (formerly UTI Bank)

Yes Bank

Bank of Rajasthan

Bharat Overseas Bank

Catholic Syrian Bank

Centurion Bank of Punjab

City Union Bank

Development Credit Bank

Dhanalakshmi Bank

Ganesh Bank of Kurundwad

IndusInd Bank

Jammu & Kashmir Bank

Karnataka Bank Limited

Karur Vysya Bank

Kotak Mahindra Bank

Lakshmi Vilas Bank

Nainital Bank

Ratnakar Bank

SBI Commercial and International Bank

South Indian Bank

Amazing Mercantile Bank

Punjab National Bank

Rupee Bank

Saraswat Bank

Tamilnad Mercantile Bank

Thane Janata Sahakari Bank

21

Bassein Catholic Bank

Specialised Banks
There are some banks, which cater to the requirements and provide overall support for setting up
business in specific areas of activity. EXIM Bank, SIDBI and NABARD are examples of such banks.
They engage themselves in some specific area or activity and thus, are called
specialised banks. Let us know about them.
Export Import Bank of India (EXIM Bank): If you want to set up a business for exporting
products abroad or importing products from foreign countries for sale in our country, EXIM bank can
provide you the required support and assistance. The bank grants loans to exporters and importers
and also provides information about the international market. It gives guidance about the
opportunities for export or import, the risks involved in it and the competition to be faced, etc.
Small Industries Development Bank of India (SIDBI): If you want to establish a small-scale
business unit or industry, loan on easy terms can be available through SIDBI. It also finances
modernisation of small-scale industrial units, use of new technology and market activities. The aim
and focus of SIDBI is to promote, finance and develop small-scale industries.
National Bank for Agricultural and Rural Development (NABARD): It is a central or apex
institution for financing agricultural and rural sectors. If a person is engaged in agriculture or other
activities like handloom weaving, fishing, etc. NABARD can provide credit, both short-term and
long-term, through regional rural banks. It provides financial assistance, especially, to co-operative
credit, in the field of agriculture, small-scale industries, cottage and village industries handicrafts and
allied economic activities in rural areas.
(1.5.E) Exchange Banks
There is a difference in financing of foreign trade and financing of internal trade. Generally a
person carrying on international trade requires foreign currencies to meet his obligations. It is here
that exchange banks play the role of financing the dealer for setting transactions involved in foreign
trade. Though commercial banks undertake financing international trade, there are specialized banks
for foreign exchange business. In India, there is the Export-Import Bank (EXIM).
(1.5.F) Investment or Industrial Banks
Investment banks provide long-term credit to industries. They raise their funds by way of
share capital, debentures, and long-term deposits from the public. They also raise funds by the issue
22

of bonds for business corporations and government agencies. Usually they underwrite the fresh issue
of shares and debentures of companies. Such banks also buy the entire issue of new securities of
public limited companies and try to get them subscribed at a higher price by the public.
(1.5.G) Land Development Banks
Land development banks were earlier known as land mortgage banks. In India, there are a
limited number of such banks. They are special institutions providing long-term loans to
agriculturists and farmers. They provide loans on the security of land and other immovable
properties. They supply long-term funds for period exceeding six years. Agriculturists and farmers
need such funds for making permanent improvements to land and for buying farming machinery and
equipment.

(1.5.H) Rural Bank

Rural Bank provides various advance facilities for manufacturing activities such as business,
industry, and for the aim of rural economic development, the Rural Bank Act is passed in 1974. Rural
Bank has given major contribution in the development of rural area.
(1.5.I) Saving Banks
Saving banks are specialized institutions which encourage the general public to save
something from their earnings. In other words, such banks pool the small saving s of the lower and
middle income sections of society. They are not banks in the true sense of the term and their main
aim is to promote and collect the savings of the public. Not only the depositors are given interest, but
they are allowed to withdraw in times of needs. The numbers of withdrawals are, however, restricted.
Separate savings banks are organized in various nations. The government can also run a savings
bank. In India, the Postal Department runs the Postal Saving Bank all over the country.
(1.5.J) Deposit Bank V/s Mixed Banks
The main function of a commercial bank is to accept deposits from the public and lend them
to traders, industrialists and others for period not exceeding one year. The loans and advances
provided for a short period are meant to supplement the working capital of trade and industry in
times of need. This type of banking of attracting and accepting deposits and then lending for short
period is known as deposit banking. Banks which follow such a system are called deposit banks.

(1.6.A) General Banks Function

Principal Function:
Accounting Deposits
Granting Advances
Ancillary Function:
Discounting of Bills & Cheques.
Collection of Bills & Cheques.
Remittance.
Safe Custody of Articles.
23

 Safe Deposit Lockers.

Conducting:

Safe Deposit lockers

Issue of :

Letters of credit.

Guarantees.

(1.6.B) Function of the Commercial Bank

Central Bank of India was the first Indian commercial bank which was wholly owned and
managed by Indians. So the main function of the commercial bank is as follow:
The functions of commercial banks are of two types.
(A) Primary functions; and
(B) Secondary functions.
Let us discuss details about these functions.
PRIMARY FUNCTIONS
The primary functions of a commercial bank include:
a) Accepting deposits; and
b) Granting loans and advances.
Accepting deposits
The most important activity of a commercial bank is to mobilize deposits from the public. People
who have surplus income and savings find it convenient to deposit the amounts with banks.
Depending upon the nature of deposits, funds deposited with bank also earn interest. Thus, deposits
with the bank grow along with the interest earned. If the rate of interest is higher, public are
motivated to deposit more funds with the bank. There is also safety of funds deposited with the bank.
Grant of loans and advances
The second important function of a commercial bank is to grant loans and advances. Such loans and
advances are given to members of the public and to the business community at a higher rate of
interest than allowed by banks on various deposit accounts. The rate of interest charged on loans and
advances varies according to the purpose and period of loan and also the mode of repayment.
i) Loans
A loan is granted for a specific time period. Generally commercial banks provide short-term loans.
But term loans, i.e., loans for more than a year may also be granted. The borrower may be given the
entire amount in lump sum or in instalments. Loans are generally granted against the security of
certain assets. A loan is normally repaid in instalments. However, it may also be repaid in lump sum.
ii) Advances
An advance is a credit facility provided by the bank to its customers. It differs from loan in the sense
that loans may be granted for longer period, but advances are normally granted for a short period of
24

time. Further the purpose of granting advances is to meet the day-to-day requirements of business.
The rate of interest charged on advances varies from bank to bank.
Interest is charged only on the amount withdrawn and not on the sanctioned amount.
Types of Advances
Banks grant short-term financial assistance by way of cash credit, overdraft and bill discounting.
Let us learn about these.
a) Cash Credit
Cash credit is an arrangement whereby the bank allows the borrower to draw amount up to a
specified limit. The amount is credited to the account of the customer. The customer can
withdraw this amount as and when he requires. Interest is charged on the amount actually
withdrawn. Cash Credit is granted as per terms and conditions agreed with the customers.
b) Overdraft
Overdraft is also a credit facility granted by bank. A customer who has a current account with the
bank is allowed to withdraw more than the amount of credit balance in his account. It is a
temporary arrangement. Overdraft facility with a specified limit may be allowed either on the
security of assets, or on personal security, or both.
c) Discounting of Bills
Banks provide short-term finance by discounting bills, that is, making payment of the amount
before the due date of the bills after deducting a certain rate of discount. The party gets the funds
without waiting for the date of maturity of the bills. In case any bill is dishonoured on the due
date, the bank can recover the amount from the customer.
SECONDARY FUNCTION
The subsidiary functions of a commercial bank constitute the agency services and the
miscellaneous services.
Agency Services:One of the important functions of a banker is the services performed by him as an agent. The
services as an agent are as under:

Collection of Interest and Dividend: The bank collects interest or dividend as and when
earned by the customers from securities. A very small charge is levied for the collection on
behalf of the customer.

Collection and payment: Commercial banks also collect and pay cheques, bills and
promissory notes.

Executing standing orders: A customer may leave standing instructions to a banker to make
payments to certain individuals or institutions against his account. The banker usually charges
small fees for such services.

Buying and selling of Securities: A commercial baker also undertakes to purchase or sell
stocks or shares on behalf of his customers.

Remittance of Funds: It is convenient for banks to transfer funds as they have a network of
branches all over the country. The remittance of funds is done by mail transfer, telegraphic
transfer, and bank draft.

Miscellaneous Services: -

Among the various function when they are many general utility personal or miscellaneous
services rendered to the customers. The important ones are as under:
25

Safety of Customers valuable: This is undertaken when they are kept in specially
constructed rooms in the bank premises. Here the bank acts as a bailee of the goods as it is
entrusted to its safe keeping. Usually there are two methods of ensuring safety of customers
valuable. One is the acceptance of valuables ( e.g. documents of title, jeweler etc.) for safe
custody, and the other is the provision of safe deposit vault (Lockers) on hire to customers.

Foreign Exchange: Commercial banks also deal in foreign exchange transactions. They
assist in foreign trade by discounting foreign bills of exchange and sometime even have to
arrange transport, insurance and warehousing of goods.

Letters of Credit: A commercial bank can issue personal and commercial letters of credit,
enabling the customer to profit by the superior credit.

Bankers as Referee: Commercial bankers certify the respectability and financial standing of
their customers. This service benefits businessmen who deal with the banks customers.

Underwriting: - Banks often act as underwriters to local and municipal authorities or other
public bodies. Banks also underwrite for companies, corporations, and underwrite issues of
Govt. loans, raised by municipal authorities, and industrial securities.
Information & Statistics: - Several big banks have started the
collection of information related to trade and business and provide the
same to its customers. Some banks even publish monthly reviews
containing financial and economic information

26

DATA ANALYSIS AND INTERPRETATION

27

Interpretation
The amount of advances of CBI is increases since last 4 years, but it is increasing with
decreasing rate because in 2008 growth rate of advances was 11% while in 2009 it 10.20%

28

Interpretation
The amount of current a/c was in increasing rate since 2005, but in 2009 it was decreased by
20%

Interpretation
The amount of saving deposits of CBI is increases since last 4 years, but it is increasing with
fluctuating growth rate because in 2007 growth rate of saving deposit was 20.1% ,in 2008 it
was 9.9%, while in 2009 it was again 17.80%

29

Interpretation
The amount of time deposit was increase with high rate of growth in 2009 it was around
double compare to 2008

30

(By taking data of 2005 as a base year)

(Amount in Rs.)

Interest
Earned
Other income
Total income
Interest
Expended
Operating
Expenses
Total
expenditure
Profit

31/3/2005

31/3/2006

31/3/2007

31/3/2008

31/3/2009

1,45,89,500
10,26,356
1,56,15,856

1,50,98,785
12,05,560
1,63,04,345

1,97,94,871
14,19,198
2,12,14,069

2,59,28,971
11,04,376
2,70,33,347

3,93,14,270
15,18,648
4,08,32,918

98,45,698

1,02,56,565

1,34,85,435

1,84,67,512

3,43,94,367

35,45,566

38,58,580

42,71,936

46,91,548

56,25,512

1,33,91,264

1,41,15,145

1,77,57,371

2,31,59,060

4,00,19,879

22,24,592

21,89,200

34,56,698

38,74,287

8,13,039

2006
Growth in Interest Earned

2007

2008

2009

3%

31%

31%

52%

17%

18%

-22%

38%

Growth in Total income

4%

30%

27%

51%

Growth in Interest Expended

4%

31%

37%

86%

Growth in Operating Expenses

9%

11%

10%

20%

Growth in Total expenditure

5%

26%

30%

73%

-2%

58%

12%

-79%

Growth in Other income

Growth in Profit

31

Interpretation:
The amount of the interest earned was increased with increasing rate so it is good sign for the bank
and profitability point of view, in 2007 and 2008 the growth rate was became stable but in 2009 it
was increased and became around 52%

32

Interpretation:
The amount of other income was also increased with 38% of growth rate, while in 2008 it was
decreased by 22%, so overall it is good sign for the bank

33

Interpretation:
The total income of the bank was also increased due to increases in the interest earning and other
income

Interpretation:
The amount of the interest expended was increased with increasing rate since 2005, but in 2009 it
was increased by 86% which is very high compare to previous years. The reason may be that
increased the dependability on the out side debt like deposits and borrowing. And this is not good
sign for the bank

34

Interpretation:
The operating expenditure also increased with increasing rate since 2005. In 2008 it was increased by
10% while in 2009 it was increased by 20%

35

LIMITATION OF THE STUDY

1- As the Sagar dealt in survey, so the coverage area is small according to the project need.
2- Size Of the research may not be substantial.
3- Information may be biased because of the preference of the customers.
4- Complete data was not available due to company privacy and secrecy.
5- The survey was carried through questionnaire and the questions were based on perception.
6- There was lack of time on the part of respondents.
7- The banking sector is too vast & it is not possible to cover each & every customer.

36

FINDINGS
-Most of the respondents choose SBI because the bank is giving more loan and advances facility to
the customers.
-The age group of 25yrs 35yrs respondents mostly having accounts in ICICI bank where as
maximum old age respondents having account in SBI.
- According to my knowledge and perception maximum old age customers found SBI more reliable
bank as a public sector bank where as mostly youngsters have interest in ICICI bank.
-Customer awareness programme is required so that more people should attract towards loans &
advances product.
-Maximum customers are satisfied with todays banking scenario.
-Maximum customers like the most in banking services i.e less paper work where as they also like
the EMI base loan scheme.
-Even in case of loan & advances customers not only give preference to SBI but they are also
satisfied with it.
-In ICICI bank maximum customers having saving accounts where as in SBI maximum customers
have fixed account, reason among this that maximum customer rely over SBI for their long term
money deposits.
-maximum customers are satisfied with the more no. of ATM facilities of SBI where as ICICI
customers like it low transaction cost.
-36% of SBI customers well known about its loans & advances products where as, in ICICI bank
16% customers dont know about the loan & advances product of it.

37

RECOMMENDATIONS
1- Since many of the respondents are not aware of their product & services. The bank has to take
some initiatives.
2- The bank can post a list of services that they are rendered to the customers inside the bank
Premises And they can post demo of all these services in their bank website..
3- SBI should concentrate more on the respondents are falling under the age group 25yrs 35yrs.
4- ICICI should concentrate more over the people are falling under the age group of 45-55 yrs.
5- ICICI needs to increase its lending money to attract the more people towards its loan and advances
products.

38

CONCLUSION
We can conclude that the financial sector is a nerve system of Indian economy. For steady growth in
economy innovations and development in financial sector is very important.
. The banks should focus on-Launch Innovative product
-Customized advance products
-Better customer services
-Fastest customers problem solving techniques
-Customer retention
Since both the banks are competing equally with each other.
But SBI bank is little bit below the line in young customer handling when compared to ICICI bank.
The ICICI bank is little bit below the line in concentrating on Loan & advances products & services
then to SBI bank.
But SBI should be considering more reliable because of public sector bank & because of its various
schemes.

39

BIBLIOGRAPHY
BOOKS or JOURNALS
1- Preston Mcafee, R, Introduction to economic analysis, IV edition

2- Varshnnew, P.N. Banking and Practices, IVth edition

3- Mithani, D.M, Money, Banking, International trade & Public finance 2nd edition
4-Business world 2010 February volume.

WEBSITES
www.rbi.com
www.statebankofindia.com
www.ICICIbank.com
www.moneycontrol.com

40

ANNEXURE- 1
QUESTIONNAIRE
1. Name:
2. Age: a) 25yrs- 35 yrs b) 36 yrs - 45yrs

c) 46 55 yrs d) above 55 yrs

3. Gender: a) Male b) Female

4. Educational Qualification:
a) Illiterate

(b) School

e) Professional Course

(f) Others

(c) UG

(d) PG

5. Occupation:
a) House wife

(b) Students

(c) Salaried person

d) Business man (e) Professionals (f) Supervisor

g) Managerial

(h) pensioner

6. Income level:
a) Rs.50,000 Rs.150,000 b) Rs.150,001-Rs.250,000
c) Rs.250,001- Rs.350,000 d) Rs.350,001-Rs.450,000
e) Above Rs. 450,000
7. In which bank do you have an account?
a) ICICI bank

(b) SBI bank

8. Why you choose the particular bank?

a) Efficient customer service

b) more ATMs

c) Time saving

d) transaction costs

e) Technology
9. What type of account do you have in bank?
a) Saving

b) Fixed

c) Current

d) Others.
41

10. Which type of service you prefer the most in your bank?
a) ATM service

b) Internet banking

c) Mobile banking

d) core banking

10. Are you satisfied with it?

a) Yes

b) quite satisfy

c) No

11. Are you aware about the product and services provided by these banks?
a) Yes

b) No

12. What do you feel by services provided by SBI and ICICI bank in advance product?
a) Highly Satisfactory (b) satisfied

c) average d) dissatisfied

e) Highly dissatisfied
13. Are you taking the loan from your bank?
a) Yes

b) No

14. What Features do you like most in todays banking scenario regarding the loans?
a) Less paper work

b) Transparency

c) Less interest rates

d) longer tenure loan for ease of repayment

e) Flexibility to choose EMI base loan or an over draft

f) Specially design products for self employed.
15. Are you satisfied with todays banking system?
a) Yes

b) No

42

43