STRATEGIC MARKETING

Marketing is now defined in the context of highly complex market

conditions, which defy geographical and political boundaries as A business
function that identifies, defines and measures the magnitude of the
needs and wants of a target market and decides on appropriate product
and services and programmes to serve these markets. Marketing calls
upon everyone in the organization to think and serve the customer.
In order to achieve such a stage of a standardized service of excellent quality
at all times it is necessary to put in place an integrated marketing strategy.
Marketing Strategies can be either product driven or customer driven.
In the case of product-driven strategy, the direction for the organization to
adopt is set by four choices, popularly called the four As.
These are:
Avenue or market,
Advantage that differentiates from the competition,
Access i.e. channels used to reach the market and
Activities to be performed Better, Faster, Closer for success.
On the other hand, customer-driven strategy involves partnering with the
customer in order to enhance the rendering of services/products in an
improved manner. The form of strategy calls for a bounding with the
customer for enhancing the partnering process on an ongoing basis. On the
part of the organization, the customer driven strategy will means that the
organization should adopt the processes required to drive this strategy which
include, quality consciousness, speed, courtesy and competence in dealing
with customer request, an innovative and proactive approach with a view to
provide best value for price for the customer in an interactive manner and
being customer focused at all levels of the organization. These bonding
processes are synergistic. The strength of the total process is limited to the
weakest link in the process.

The challenge of service marketing, in which the Bank is involved, is

distinct from product marketing and people play a much more critical
function in service marketing. Service Marketing is characterized by the
instant consumption of the service and there is no scope for retracting once
the service is rendered. Thus, it is necessary that every instance of service to
the customer should be of the highest standard. Thus, a customer-driven
strategy is expected to be a more effective marketing strategy for a service
organization.
Thus, the Banks organization chart in this customer driven process is

Customer
Customer

CUSTOMER

Junior
JuniorManagement
Management
Middle
Management
Middle Management

Senior
SeniorManagement
Management
Top
management
Top management

M.D
M.DChairman
Chairman

MARKETING IS SATISFYING CUTOMERS PROFITABLTY

CREDIT MARKETING
Marketing has been defined in various ways but essentially, the term
Marketing refers to the process of ascertaining, identifying,
creating and customizing needs of a customer and to deliver
satisfaction more effectively and efficiently than the competitor, at a
profit on a sustained basis.
Thus, objectives of marketing can be summed up as under:

Maximization of profits
Improvement in profitability
Improvement in market share
Through customer satisfaction
On a sustained basis.

How can this objective be achieved in context of our Bank?

Maximization of Profits:
Profit will increase with increase in business volumes. Also, increasing the
interest spread, that is, the different between cost of deposits and yield on
advances will increase profits. To achieve this, it is obvious that we should
aim to increase low cost/no cost deposits and increase advances, which yield
higher rate of interest at lower risk. Fee based product such as LCs,
guarantees, remittances, and govt. business, forex and cross selling will also
boost the profit levels.
Improvement in Profitability:
A part from volume growth in profits it is essential to ensure that
profitability also registers improvement on an on going basis. This is best
achieved by adopting efficient and cost effective processes in handing
business, which will not only result in customer satisfaction but also reduce
transaction costs, thereby improving profitability.

Increase in Market Share:

The concept of market can be defined as: Comprising of all the potential
customers sharing a particular need or want or want and who are willing to
engage in exchange to satisfy that need or want If the objective of
Marketing to increase market share is to be fulfilled, it is necessary to grow
at a faster pace than the competition while retaining exiting customer base.
We shall now examine the various critical aspects of Credit
Marketing in particular. The foremost principle in marketing credit and
credit product is to target such business business, which is of good asset
quality and has the potential to generate income for the Bank on an on going
basis end also provide a platform for marketing of additional product such as
non-fund based facilities, like LCs, BGs, derivatives, remittances, bills,
forex, govt. business (excise, service tax, income tax, etc), and so on. In
order to achieve these objectives of booking good quality, high value
business for substantial income generation for Bank, the operating
functionaries should necessarily adopt a two-pronged approach of a sound
pre-sanction process of appraised followed by a structured and continuous
monitoring and supervision of the asset to ensure a healthy credit portfolio
for Bank. The Pre-sanction process will comprise of:
Appraisal of the borrower, group exposure, track record of the unit
and its associates.
Appraisal of the environment that is, the industry, the economy,
capital market scenario treads.
Financial appraisal, liquidity, profitability trends, solvency, borrowers
stake, finance and management policy, industry, marketing strategy,
profitability trends and so on.

How to target good customer for marketing our credit product:

A few should for the operating staff:

Have overall feed of the economy and general awareness of

capital, money, and forex markets.
Have general awareness of financial product, which is sought
after by customers.
Have knowledge about the immediate environment.
o Market in which one operates.
o The major industries/activities in the area of operation.
o Major corporate on whom the SSI/SME units in the
vicinity and the local economy is department.
o List of good non-customer units.
The operating staff should be aware of the sources, which provide this
information. Rapport should be established with the local industry
associations, trader associations, District Industries Center, Finance
department of large and medium corporate in the area. Newspapers and
financial periodicals provide useful leads about the potential customers
through the news items; feature and advertisement Electronic media and
Internet also provide information, which can be used for marketing of our
products. Software packages are also being brought out at regular internals
such as Prowess, Cris-infac, and Vans etc. Which provide detailed of various
industries and industrial units which can be used very effectively for tracing
track of specific industries and industrial units? Financial statements
published in the newspaper, VRS announcements, mergers and acquisitions,
are some of the other sources of business leads. Even the ads for recruitment
of personnel provide useful insights into the functioning of the unit.
Based on the knowledge of the potential customer base, short- list of
selected potential good customers should be made and should gather

information regarding those short listed customers and their banking needs,
especially on the following aspects:

1) General information about the overall conduct of their accounts.

2) Detailed of associate concerns
3) If the customer is a corporate, gather information regarding:
Corporate history.
Composition of Board of Directors.
Existing bankers.
Audit Reports.
Analysis of financial statements.
Industry aggregates
Various developments in the areas of:
Management
Sale of Assets
Mergers & Acquisitions
Exit Policy
I.R. Issues
Capital Market Perception
Corporate Governance
This information duly updated is available in packages like PROWESS, etc.

STRATEGIC MARKETING
Strategic Marketing will result in a more efficient and effective marketing. It
involves differentiation and segmentation for better targeting of product in a
focused manner so as to reach the right group of prospective customers. In
the context of credit marketing, the market can be classified into the
following categories:

Corporate Business
SME Business

Retail Business
Government Sponsored Schemes.
Of these, SME sector is characterized by:

High Potential
Broader Spreads
Support to large corporate
Not so much price-savvy
Reasonable Counseling
Expects Counseling
The SME sector is lucrative for the Bank in view of the higher spreads and
the scopes for cross selling of other retail products is also high. This
business segment is characterized by a large client base thereby spreading
the risk-profile over a wider base.

Strategies to be adopted while interacting with the prospective/existing

customer:
Some dos and donts:

TIME MANAGEMENT
Never approach customer without appointment.
Appointment should generally be taken in the afternoon
after 3 pm.
Purpose of visit (courtesy call or official call) to be
specified
Visiting card
May not be more than an hour
Topic of Discussions should be pre-planned and
structured
ICE BREAKING
Introduction
Capture
issues
of
common
interest
(Music/Support/Culture)
Interaction on current important topics
Short and sweet. Purpose only to get relaxed
PURPOSE OF VISIT
Use information gathered in a shrewd manner and touch
upon supposed or perceived needs of customer.
Provide solutions:
Off-the Shelf products
Structured product, customized products
Importance of counseling
Importance of counseling.
Closure & follow-up
Close with assurance
If we have to come back, beat the deadline and honor
your commitments. If the deadline has to be extended,
please inform the customer well in advance. Importance
of response time should always be borne in mind. At no
point of time our credibility should be questioned by the
customer.
If customer has to come back, please remind after
reasonable time. It leaves good impression.

HUMAN VALUE AND ETHICS

VALUE ARE THE MANNER IN WHICH AN
INDIVIDUAL TENDS TO MAKE JUGEMENT
AND CHOICE FOR ACHIEVING SET GOALS
AS ALSO THE MEANS TO BE ADAPTED TO
ACHIEVE THOSE GOALS.
EHICS IS THE SYSTEM OF MORAL CODES
AND PHILOSOPHY THAT EXAMINES THE
VALUE IN HUMAN BEHAVIOUR.

PRODUCT
SME CREDIT CARD
1.
2.

3.
4.
5.
6.
7.
8.

9.
10.

11.
12.

Target group

: SSI units, tiny units, village industries, Retail traders,

professionals, self- employed, etc.
Eligibility
: Customer of the following segments with a satisfactory
track record for the last two years: Small industrial units
Small retail traders Professionals
Self employee persons
Small business enterprises
Purpose
: To meet any kind of credit requirements
Type of facilities
: Cash Credit and/or Term Loan
Quantum
of : Maximum-Rs.10 lacs
Finance
Margin
: 20%
Rate of interest
: As applicable to the market segment
Security:
: Hypothecation of stock in trade, receivables, machinery
-Primary
Office equipment
SSI-No collateral is to be insisted upon
-Collateral
SBFCharge over movable/ improvable property/
third party guarantee
Processing fees
: As applicable to SSI units
Replacement
:
a) The working capital component should be
reviewed every year provided the credit
summation is not less than 50% of the projected
turnover. If the credit summation is less than
50%, then a replacement schedule should be
fixed for the outstanding monthly installment.
b) The Term Loan component should be repayable
in a maximum of 5years in suitable installments.
Documentation
: As per the nature of the facility
Special features
: Assessment: A scoring model has been designed and
those units which score a minimum of 60% qualify

under the Scheme for which the assessment will be

made as under:i. For small business, retail traders etc.,
- 20% of their annual turnover OR
- 20% of turnover of the last 12 month in their
their accounts, whichever and professionals.
ii. For self- employed and professionals
- 50% of gross annual income as declared in
their income tax return.
iii. For SSI units
- As Per Nayak Committee norms i.e.,
- 20% of annual turnover
Validity The limit will be valid for 3 years but is
subject to annual review.
13.

Methodology and
operating of the
account

The borrower will be issued a photo identity card

indicating sanctioned limit and validity of the
limit.
Cheque book to be market as SME Credit Card
Pass Book to be issued
Submission of stock statement is waived but may
be obtained once in the last quarter to meet RBI
stipulations
Brief opinion report should recorded

PRODUCT HIGHLIGHTS:Small business industries in the tiny sector, retail traders, professional and
self employed person, requiring working capital needs are very often unable
to provide the elaborate financial data sought by banks from time to time for
assessing their credit needs. To obviate this difficulty faced by the small
units of a photo identify card and a passbook, which gives details of the limit
and validity of the facility. The assessment is based on a simple scoring
model and units, which score 60%, or more are eligible for this working
capital cum term loan up to RS.10lacs valid for a period of 3 yaers

Marketing Tips: This is a very user friendly product for any type of entrepreneur
located in urban, semi urban or rural areas.
Small SSI units, retail traders, self-employed professionals, small
business enterprises etc., are the ideal target group.
The limit being valid for 3 years for properly conducted accounts is a
major plus point of this product.
Stock statements are not required to be submitted except once a year.

SME CREDIT SCORE

1.

Target group

2.

Eligibility

3.

Purpose

4.
5.

Type of facilities
Quantum of
Finance

6.

Margin

7.
8.

Rate of interest
Security:
-Primary
-Collateral

9.
10.

Processing fees
Replacement

11.

Documentation

: Individually managed proprietary/partnership

firm or closely held public/private limited
companies in the Small and medium industrial
and trading sector under C&I and SIB
segments
:
The chief promoter/ chief executive
should be below 66 years of age.
The applicant must obtain a minimum
score of 60% with a minimum of 50%
under each sub head of Business and
Personal details and a minimum of 10%
under collateral details.
:
Working Capital needs
Acquisition of fixed assets
: Cash Credit and/or Term Loan
: Rs. 5lacs to below Rs. 25lacs
20% of annual turnover for WC loan and 67%
of project cost for TL
: 25% for working capital component and 33%
for TL component.
: As applicable to SSI loans up to Rs. 25lacs
:
Hypothecation of stock and assets financed by
Bank
Office equipment
As per Banks extant norms for WC and TLs
: As applicable to SSI /SBF/C&I units
:
1. WC loan to be reviewed annually.
2. TL not more than 5years excluding
moratorium not exceeding 6months
: As applicable to SSI&C&I segment

12.

Special features

A. A simplified appraisal model (enclosed)

has been developed to standardize the
appraisal process.
B. A special application form has been
designed to capture all the required
information at one instance.

PRODUCT HIGHLIGHTS:The product is designed to avoid delays in credit delivery of retail

banking product due to cumbersome assessment processes. A simple
scoring model has been designed for which all the data required has to be
furnished at one go by way of an application form, which has also been
specially designed for this product. Unit, which score a minimum of
60%, are eligibility for this product. This product can be given to units in
C&I, SSI and SBF segments for credit requirements between Rs. 5lacs to
Rs. 25lacs based on the projected turnover and/ or project cost. The loan
quantum should be a minimum of 20% of turnover and/or, 67% of project
cost. If a proposal does not fit into this model, it can also be considered
on usual Banks term on merit.
Marketing tips:
This product is especially useful in Trend advances and small
industries.
All SMEs especially those which are individually managed
proprietary concerns/ partnerships/private limited companies are
the target group.

SME CREDIT PLUS

Target Group
Eligibility
Purpose

Type of facilities
Quantum of
Finance
Margin
Rate of Interest

Existing SSI borrowers with excellent track record

and have been standard assets for the past two
consecutive years and also new borrowers.
Units with CRA Rating of SB4 & above and / or
standard assets for the past two years

For meeting bulk orders

repairs to machinery

Tax payments

Any other contingency

Clean Cash Credit

20% of aggregate working capital limit subject to a
maximum of Rs.25 lacs
Not applicable
At the rates applicable the working capital limits

Security:
- Primary

Nil

- Collateral

Existing collateral to be extended to cover this limit

and additional collateral to be obtained only if
considered necessary by the sanctioning authority
As applicable
Each amount of withdrawal should be repaid within 2
months.
There should be a gap of 15 days between the last
date of repayment of outstandings and the next
withdrawal.
As applicable to clean cash credit.
No cheque book to be issued

Processing fees
Repayment

Documentation
Special features

SBI SHOPPE

Target Group

Eligibility
Purpose

Present and prospective owners of shops/ offices/

show-rooms/ training centres/ service centres/
garages/ offices for Chartered Accountants /
Consultants
Individuals /firms / partnerships / trusts / franchisees
Purchase of new / old shops/ establishments /
offices / dealer's showroom etc.
Repairs / renovation / modernization
Furniture / fixtures / electrical
/accessories for the shop/office etc.
Term Loan
Maximum of Rs.20lacs

Type of facilities
Quantum of
Finance
Margin
Rate of Interest
Security:
- Primary
- Collateral
Processing fees
Repayment
Documentation
Special features

fittings

25% and 40% for purchase old premises

As applicable to SIB TLs below Rs.25lacs
Hypo. / pledge / mortgage / assignment of the assets
purchased out of Bank's finance

As applicable to SSI / SBF units

3 to 7 years excluding a maximum moratorium period
of 6 months
As applicable to SSI / SBF Term Loan

No Objection Certificate and No Lien Letter

to be invariably obtained from the owner/lessor of
the property in the case of rented property

Repayment period should well within the lease

period in the case of rented property.

Opening of SB / Current Account is mandatory

DSCR to be minimum 1.75

Property on hire purchase/ lease from govt.

departments /PSUs should not be financed

WORKING CAPITAL FINANCE TO T&S SECTOR

Target Group
Eligibility
Purpose
Type of facilities
Quantum of
Finance
Margin
Rate of Interest

Retail and wholesale traders in agricultural and

industrial commodities, Dealers in consumer durables,
consumer goods, vehicles, showrooms, etc.
Units in C&I segment established with profits at least
in the preceding 3 years with CRA rating of SB4 and
above
Working capital requirements
Cash credit limit with a sub-limit for LCs if required
15% of projected annual turnover which should not be
more than 25 % of the turnover in the previous year
subject to a maximum of Rs.5 crores.
25%
As per credit rating. A concession of 0.50% may be
offered for units with at least 75% collateral coverage

Security:
- Primary

Hypothecation of stocks and receivables

- Collateral

Collateral security of at least 50% is to prescribed out

of which at least 33% of the limit should be by
mortgage of immovable property. The stipulation
regarding immovable property can be reduced to 25%
in exceptional cases with the administrative clearance
from CCC-II.
As applicable to C&I units
On demand
As per extant instructions
In case the proposal does not fit into this turnoverbased model of credit assessment, the traditional
method of projected balance sheet method may be
adopted.

Processing fees
Repayment
Documentation
Special features

FLEXI LOAN FOR TRADE AND SERVICES

Target Group

Wholesale and retail traders in agricultural or

industrial commodities

Distributors and stockiest of industrial products,

consumer durables, consumables, etc.

Tourism
agents, etc.

Large transport operators of passenger buses/fleet

owners

Eligibility

Purpose

Export / import intermediaries

related

facilities-Hotels/resorts/travel

Construction, transport & supply contractors,

Hospitals, nursing homes, clinical labs, etc.,

Borrowers with CRA rating of SB4 or SBTL4 and above only
are eligible and should have earned cash profits in each of the
preceding 3 years and net profit in the last year. Only
established traders with proven record of profitability are
eligible.
The loan can be considered for any general purpose such as

Holding of stocks/book-debts

Acquisition of land and building

Construction/renovation of office/showroom

Purchase of vehicles, equipment, machinery

Shoring up of net working capital

Type of facilities
Term loan
Quantum
of Rs.5lacs to Rs.100 lacs. In the case of extending this term
Finance
loan for working capital purposes, a limit of upto 15% of the
assessed WC limits can be considered for meeting

Margin
Rate of Interest
Security:- Primary
- Collateral

contingencies, subject to availability of drawing power.

Minimum DSCR to be 1.50.CRA Trade model to be used for
limits above Rs.25 lacs.
Minimum 25% of the expenditure
Linked to CRA rating for limits above Rs. 25 lacs. For others,
SBF rates are applicable
Hypothecation of current assets and EM of land and building
if acquired from Bank finance
1.

Tangible security by way of immovable property,

TDRs, NSCs, etc for a minimum of 35% of the loan for
those with a satisfactory track record of 3 years. For
others, minimum collateral should be 50%.

2.
Processing fees
Repayment
Documentation
Special features

Personal guarantees of promoters/partners/ proprietor

As applicable to C&I units
In 3 to 5 years This can be extended upto 8 years in deserving
cases.
Composite Term Loan Document for Flexi-loan-2A &2B
RBI guidelines on selective credit control will apply
Audited Balance Sheet to be obtained as per extant
instructions

Exposures under Multiple Banking Arrangement may

be explored selectively to facilitate take-over of quality
assets

GENERAL PURPOSE TERM LOAN FOR SSI

SECTOR

Target Group
Eligibility

Existing SSI borrowers with CRA rating of SB3 and

above

Should have earned profits in each of the

preceding 3 years

The unit should not have a history of default

Purpose
Type of facilities
Quantum of
Finance
Margin
Rate of Interest
Security:

The unit should be CRA rated unit with a

minimum limit of Rs.25 lacs (as far as possible).
Any general commercial purpose such as shoring up
NWC, substitution of high cost debt, R&D, quality
upgradation for ISO certification, etc.
Term Loan
Maximum of Rs.50lacs
Minimum of 25% for acquisition of assets, i.e.,
quantum of loan should be restricted to 75% of
project cost.
As per CRA rating

- Primary

Extension of Hypothecation charge over current and

fixed assets

- Collateral

Extension of charge over existing collateral

Ostentation of additional collateral by way of

tangible security to be explored

Processing fees
Repayment
Documentation
Special features

Personal guarantees of proprietor/ partners /

promoters to be invariably obtained
As applicable to SSI units
In monthly /quarterly instalments normally in 3 years,
extendable up to 5 years in deserving cases.
Specially designed document on the lines of the
Composite Loan Agreement

Term Loan to be disbursed in line with the

approved purpose

Loans, deposits, from friends and relatives can

be treated as quasi-equity to arrive at TNW subject

to undertaking from them that the amounts will

not be withdrawn during the currency of the loan.

DOCTOR PLUS

Target Group

Medical practitioners of any discipline, promoters of

Eligibility

hospitals and nursing homes, pathological clinics, polyclinics, X-ray labs, etc.

Individuals/ Partnerships/ Corporates/Trusts

Purpose

Minimum score of 60% in the scoring model

To finance qualified medical practitioners

Type of facilities
Quantum of
Finance

Margin

Rate of Interest

Promoters should be registered practitioners and

should possess minimum qualification to practice in
a discipline such as MBBS/ BDS / BAMS /
GAMS /BHMS

for buying equipment

for setting -up clinic, nursing home, poly-clinic,
Path lag, X-ray lab , drug store, purchase of vehicle,
ambulance, computers, etc..

for repair/ renovation of clinic / dispensary, etc.

MTL and Cash Credit. Clean Cash Credit can be
extended if mortgage of property is not possible in the
case of loan given for repair of clinic etc.
Maximum of Rs. 25 lacs of which a sub ceiling for WC
limit is Rs3lacs
Loans beyond Rs.15lacs in rural areas and beyond
Rs.10lacs in metro and urban centres will be classified
under C&I segment.
Upto Rs. 25000/-

NIL

Over Rs.25000/- and upto Rs.5 lacs

10%

Over Rs.5 lacs

Size of loan

20%
> 3 years

< = Rs.50000/SBAR

Below 3 years
2.25% below SBAR

2.00%below

> Rs.0.5lac
< = Rs.2 lac
SBAR

1.75%below SBAR

1.50%below

1.25%belowSBAR

1.00% below

> Rs.2lacs
< = Rs.5lacs
SBAR

> Rs.5lacs
< = Rs.25 lacs 0.75% SBAR
0.50%below
SBAR
Security Primary Hypothecation of assets financed by the Bank

- Collateral

< = Rs. 5 lacs Not required

Processing fees
Repayment

< = Rs 10lacs Not required allopathic doctors

As applicable to SBF units
Minimum DSCR 1:1.5
Maximum period 5 to 10 years
Moratorium:

Documentation
Special features

Maximum 6 months and 12 months if construction is

involved and relaxable to 24 months by one level
higher than the sanctioning authority
A Composite loan document drafted for the purpose
The assessment will be based on a simplified scoring
model . Minimum score to be eligible for the loan is
60%.

DOCTOR (+) PLUS

CREDIT SCORING MODEL

Name of the Company/Firm _________________________

Name of the Chief Promoter _________________________

(i)

S.
No.

Personal details of Chief Promoter:

Parameter

Owning house

Criteria

Own
Owning a house with
mortgage

Marks Max. Ma
Marks rks
sco
red
3
3
2
0

Not owning
Academic qualification
(in medical field)

Super Specialist

P.Graduate/Addl.
Qualification

Graduate
Experience/Practicing

More than 10 yrs

5 10 years

Spouse Details

Assessed for income tax

3 5 years

less than 3 years

Medical Practitioner

Employed

Not employed

Assessed

2
0

Not assessed
Loyalty
More than 5 years
(Deposit/advance dealing
3 5 years
with SBI, SBI Cards

1 3 years

for one year

Has Life Insurance Policy Yes

No
Total

2
0

25

PARYATAN PLUS

Target Group: All segments of tourism, viz.,

Hospitality Industry
Transportation
Travel agents
Tour operators
Adventure tourism

Religious tourism
Eligibility: Individuals, partnerships, corporates, trusts
Purpose

Construction / renovation / modernisation / expansion to Hotels /

Yatri Nivas / Dharamshalas, etc.

Construction of office premises/purchase of office furniture and

computers etc., by travel agents/tour operators

Purchase of luxury buses/ coaches ,cars, vans etc., at tourist sites

Purchase of house boats/ luxury boats

Setting up of restaurants/coffee houses/ ice-cream parlours etc.

Amusement parks / Ropeways

Health clubs / Spas

Type of facilities :CC (Hypo) , TL , LCs, BGs
Quantum of Finance : Minimum Rs.2lacs
Margin- 20% [40% for purchase of old vehicles of less than 5 years]
Rate of Interest As per C&I / SBF rates as the case maybe
Primary Security : Hypothecation of assets financed by the Bank
Collateral Security :Tangible Collateral of immovable property or TDRs,
NSCs, KVPs,, etc for at least 50% of the loan amount
Processing fees: As applicable to C&I / SBF units
Repayment:
TL 3 to 7 years including start up period not exceeding 18 months
CC Repayable on demand
Documentation: As applicable to SBF / C&I Advances
Special features

Maintenance of Current Account to route all receipts is mandatory

DSCR - minimum 1.5 in case of vehicles

Appropriate licenses to be obtained

Only skilled / trained persons eligible

Audited financials are desirable
Take over of loans permissible subject to take - over norms
For tourism related activities, WC limit over Rs.20 lacs or Advance
for purchase of more than 10 vehicles under this scheme must be
classified under C&I segment and should be treated as such for all
purposes.

Luxury coaches up to 10 vehicles can be financed under Transport

Operators Scheme

TRANSPORT PLUS

Target Group

Eligibility

Purpose

Fleet operators owning more than 10 trucks /tankers /

tippers / luxury buses etc. (surface transport operators)
generally operating on contract basis with govt.
departments/ corporates, etc.

Transport operators holding valid route permits and

willing to exclusively bank with us.

The promoters/CEO should be IT assesses.

The Regd./ admn. office should be in a metro/

urban/ semi-urban centre

The promoter/ CEO should be more than 18 years of

age, should own a house, should have experience of
more than 5 years in the field, and should have an
annual income of Rs.2lacs as per IT assessment in the
previous year.

Dealings with their bankers should have been

satisfactory.

Should be reputed and IBA approved in the case of

trucks.

Their operations should be fully computerised

Should record a rising trend in income and profits in

the last two years.

Should own more than 10 well maintained vehicles

not more than 10 years old of which at least 50% should
be unencumbered

Should have had dealings with banks /FIs for at least

3 years.

Should have a receivable level of within 3 months

Value of orders on hand should be at least 30% of

projected annual turnover.

Should be major sub-contractors or direct

contractors with tie up arrangements with large
corporates
To finance purchase of new transport vehicles including

Type of facilities
Quantum of
Finance

Margin
Rate of Interest
Security:
- Primary
- Collateral

Processing fees
Repayment
Documentation
Special features

take over of existing loans subject to fulfillment of

takeover norms and WC finance against receivables
TL and Cash Credit
Corporates
Non Corporate
TL Rs.15lacs to Rs.7.50crs
Rs.15lacs to
Rs.4.00crs
CC Rs.10lacs to Rs.10crs.
Rs.10lacs to
Rs.7.50crs
TL & CC 20%
TL 0.75% over SBAR floating with monthly rests
CC 0.50 % over SBAR with monthly rests
Hypothecation of vehicles financed and receivables
Other unencumbered vehicles / immovable property for a
value of not less than 50% of loan amount which can be
reduced to 25% if 100% tie up arrangements are in place
As applicable to C&I units
TL Maximum of 5 years IN EMIs. PDCs to be obtained
CC - Repayable on demand and renewable annually
Revised C&I documents C1.C2,C3,C4 & C5

Current Ratio minimum 1.33

TOL/TNW maximum 2.75
Average gross DSCR Minimum 2.00

Debt / Equity Maximum 2 :1

Promoter's contribution minimum 20%

Prepayment of 1% p.a. for the amount prepaid

and for the residual period

CYBER PLUS

Target Group
Eligibility

.Educated youth with basic computer knowledge

especially in rural and semi-urban centres. Women
entrepreneurs are to be given preference
Educational qualifications minimum SSC or 10thstd.
passed
Age between 18 and 45 years of age

Purpose
Type of facilities
Quantum of
Finance
Margin
Rate of Interest
Security:
- Primary
- Collateral

Processing fees
Repayment
Documentation
Special features

Should possess basic computer knowledge

To set up Internet/ Cyber cafes especially at rural and
semi- urban centres with potential for such a facility
Composite Loan
Rs.50000/Rs.9000/0.75%below SBAR
Hypothecation of the assets purchased from Bank
finance
NIL
Can be brought under CGTSI scheme
Waived
36 to 40 monthly instalments
Composite Loan Agreement

N-Logue, a non profit organisation comprising

of specialists from IIT Chennai has designed the
"CHIRAAG kiosk to be located at rural centres to
provide e-governance and has entered into
agreements with various agencies to enable these
kiosks to provide communication, education,
information about agriculture, health and other
services.

The role of n-Logue is as under:-

To identify, select and train the operators

To provide logistic support and marketing

Installation of equipment

Provide internet connection

Identifying usages and services

To provide maintenance and insurance

To interact with govt. departments to introduce

and enhance the scope of e-governance

To monitor the assets and undertake marketing

of kiosk services

To offer minimum buy back guarantee for the

assets

The scheme is presently introduced in Chennai,

Mumbai,
Hyderabad
,
Bangalore
and
Ahmedabad Circles.

The total project will be around Rs.59000/-for

purchase of PC, monitor, CorDET wireless system,
UPS, printer, Internet registration, software,
furniture, etc.

SWAROJGAR CREDIT CARD

Target Group

Self employed persons such as rickshaw owners,

fisherman, handloom weavers, service sector for

example, TV mechanics, and other micro-entrepreneurs,
and SHGs.
Eligibility
Individuals or group of individuals engaged in any viable
micro-enterprise. SHGs can also be provided with this
facility jointly with the entrepreneur.
Purpose
For meeting the investment needs as well as the working
capital requirements of self employed persons
Type of facilities
Composite Loan which comprises of a Term Loan and a
revolving Cash Credit account. The borrower can avail
the entire component as a TL or for working capital only
as per the actual requirement,
Quantum
of Rs. 25000/- per borrower as composite loan . This can be
Finance
increased to Rs.30000/- in deserving cases. The initial
investment in fixed assets and/or working capital
requirement /recurring expenditure are to be taken as the
basis for fixing the limit. The cash credit limit should be
fixed based on the operating cycle to the extent of the
available balance after fixing the TL component A
component not exceeding 20% of limit can be can be
built in for consumption purposes in view of the family's
contribution in the productive activity.
Margin
NIL
Rate of Interest
As applicable under SIB segment
Security:
- Primary

Assets acquired from Bank finance

- Collateral
Processing fees
Repayment

NIL
Waived
TL is repayable in 5 years in suitable instalments

Cash credit limit should be normally repaid in 12

months and renewed annually based on the conduct of
the account and repayment of the Term Loan. If the
CC account remains continuously irregular for 90
days or remains outstanding for 12 months, no further
debits should be permitted.

Documentation
Special features

Composite Loan document

The facility should be covered under the Group

Insurance Scheme and the cost borne by the Bank
and the borrower equally

BMs have absolute freedom to select the

borrowers for this product and there is government
subsidy for this scheme

Withdrawal from the account will be through a

withdrawal slip or cheque.

The SCC holder can be permitted to open a

Savings bank account.
Methodology and The borrowers will be issued a laminated credit card and
Operation of the a passbook.
account
This will serve as an identity card and will record the
transactions on an ongoing basis.
The passbook will contain the repayment schedule of the
term loan also.
A passport size photograph of the borrower will be
affixed on the credit card and the borrower will have to
produce both the credit card and the passbook for
withdrawal from the account.
Self Help Groups (SHGs) can also be issued these cards
and each member of the Group will be jointly and
severally liable for the amount.
As far as possible cluster approach should be adopted for
this product.

ARTISAN CREDIT CARD

Target Group
Eligibility

Artisans in the handicrafts sector and NOT covered by

the government sponsored loan schemes.

Minimum score of 60% under the simplified

scoring model

Preference to be given to artisans registered with

the Development Commissioner (Handicrafts)

Thrust to be to finance in clusters and preferably

those supported by a Self Help Group (SHG)

Purpose
Type of facilities
Quantum of
Finance
Margin
Rate of Interest

Existing borrowers with limits upto Rs.2 lacs

and satisfactory track record are also eligible.
For working capital requirements as well as cost of
tools and equipment required for carrying out the
manufacturing process.
A cash credit limit supported by a photo card which
indicates the limit and validity and a passbook
Maximum of Rs.2 lacs. Assessment to be made under
Nayak Committee norms and will be based on the
simplified Scoring Model. The minimum score to be
obtained for being eligible for finance is 60%
Upto Rs. 25000/NIL
Over Rs.25000/- and upto Rs.2 lacs
20%
Upto 50000/1.75% below SBAR
over Rs.50000/0.75% below SBAR

Security:
- Primary
- Collateral
Processing fees
Repayment

Documentation

Hypothecation of assets financed by the Bank

NIL
As applicable to SSI segment but no fees to be charged
for review/renewal.
The portion of limit used for purchase of tools, etc. may
be made repayable in 3years. The rest of the limit will
be a revolving cash credit limit to be reviewed every
year but valid for 3 years subject to satisfactory
conduct of account.
Composite Loan Agreement

Special features

New units can also be financed

Beneficiaries registered with the Development
Commissioner (Handicrafts) will be eligible for
insurance cover under group guarantee scheme for
which the premium will be paid by the government
and the beneficiaries in the ratio 60:40

Methodology and The beneficiaries of the scheme will be issued a photo

Operation of the ID card which contain name, limit and validity of the
account
facility. A passbook will also be issued which will
contain all details of the beneficiary including address,
and all transactions will be recorded in it on an ongoing
basis.

SEMFEX II
Target Group
Eligibility
Purpose

Ex-servicemen, widows of servicemen. disable servicemen

Individual or association of not more than 6 members.
To purchase utility vehicles, LCVs, Commander 650,
Major (CL-500) and Savari Rang and pick ups such as

Type of facilities
Quantum of
Finance
Margin
Rate of Interest

Security:
- Primary

single cabs and double cabs manufactured by Mahindra &

Mahindra.
Term Loan
As per assessment. Not more than 10 vehicles should be
owned by the borrower including the vehicles to be financed.
Gross DSCR should be Minimum 1.75%
20%
For loans below Rs.50000/1.75% below SBAR for TLs repayable within 3 years
1.25% for TLs repayable in 3years to 7 years.
For loans over Rs.50000/0.75% below SBAR for TLs repayable within 3 years
0.25% for TLs repayable in 3years and over.
Hypothecation charge to be registered with RTA.

- Collateral

mortgage of immovable / movable property to cover 50%of

the loan amount and / or third party guarantee
Processing fees
Waived
Repayment
Within 3 to 7 years with a moratorium of 6 months.
Longer repayment period may be fixed based on the gross
DSCR in each case.
Documentation
As per Term Loans in SBF segment
Special features
Subvention amount of Rs.1000/- is available per vehicle for
1 year
Methodology and M&M dealers will obtain applications and after due
Operation of the
diligence will forward them to the Bank for appraisal and
account
sanction if found acceptable in all respects.

RICE MILLS PLUS

1.

Target Group

: Rice Mills with proven track record

2.

Eligibility

: a)
b)

3.

Purpose

: a)

Profit making existing units

with CRA rating of SB4 and above
Take-over of units
conforming to takeover norms is
also permitted
Acquisition of
machinery/factory building for
modernization

b)

Working capital needs

4.

Type of facilities : Term Loan, Cash Credit, outward bill

limit, LCs , BGs,
SME Credit Plus

5.

Quantum of
Finance

: No upper Ceiling. Nayak Committee

norms are applicable: minimum of 20%
of projected annual turnover. A higher
limit can be considered selectively on
projected balance sheet method. Peak
and non peak limits can be fixed
depending on actual need.
Separate limits for other activities:-

6.

Margin

Wherever the borrowers are engaged in

other activities, separate limits may be
considered based on viability and other
aspects of assessment and appraisal.
: Term Loan 15-25%
Working Capital
Stocks :-

Paddy &Rice - 15%-20%

Brokens

- 20%

Bran

- 30%

Gunny bags -

40%

Book debts40%(cover period max.60days)

Margin for book debts can be lowered
upto 25% where adequate collateral is
available.
7.

Rate of Interest

CRA Rating
SB1
SB2
SB3

SB4
Limits Rs.2 to
Rs.25lacs

Interest rates
1% below SBAR
minimum 9.25%
p.a.
1% below SBAR
minimum 9.25%
p.a.
0.75% below
SBAR
minimum 9.50%
p.a.
@ SBAR
minimum10.25%
p.a.
@ SBAR
minimum 0.25%
pa

For Term Loans

SBTL 1

0.50% below
SBAR
minimum 9.75%
p.a.

SBTL 2

0.50% below
SBAR
minimum 9.75%
p.a

SBTL3

0.25% below
SBAR
minimum 10% p.a

SBTL 4

8.

Security:
- Primary
- Collateral

0.50% above
SBAR minimum
10.75%pa

For units with

0.50% above
limits of above
SBAR minimum
Rs.2 lacs to
10.75%pa
Rs.25 lacs
: Hypothecation/pledge of assets created
out of Bank finance
For loans upto Rs.5lacs-NIL,OthersTangible security of borrower or
guarantor a value of not less than 75%
of loan amount

9.

Processing fees

Rs.115/- per 1 lac

Upfront fee for term loans 0.60% of the
loan amount

10.

Repayment

11.

Documentation

Issuance of drafts/ BCs/ cheque

collection 50% of applicable charges.
: TL 5 to 7 years excluding the
gestation period of maximum 12 months

: As applicable to SSI units

RICE MILLS PLUS

CREDIT RATING SYSTEM
S.No.
Parameters
1.
Current Ratio
>=1.15

Score
15

>=1.13 <1.15

12

>=1.10 <1.13

>=1.05 <1.10
<1.05
2.

3.

4.

5.

6.

7.

TOL/TNW Ratio

Gross average DSCR for all

loans inclusive of the
proposed term loan

Interest and installment

obligation of cash credit and
term loan(s)

Total sales : Inventory +

sundry debtors

Submission of stock
statements, balance sheets,
renewal data
Achievement of projected
sales

<=2.50

5
0
10

>=2.50 <3.50

>=3.50 <5.00

>=5.00 <6.00

>6.01
>=2

2
10

<2.00 >=1.75

<1.75 >=1.50

<1.50

Timely repayment on
due date

Delayed payment
upto 30 days

Over 90 days
>= 4 times

2
10
5
0
10

>=3times <4 times

>=2 times <3 times

>2 times

Timely submission

One month delay

Irregular in
submission

2
5
3

>=85%

1
5

< 75% >=50%

<50% >=25%
<25%
8.

Supported by tangible
collateral security including
2nd change on fixed assets

Security coverage to total

loan
>=100%
>=50% <100%
>=25% <50%

9.

10.

Operational experience in
cash credit

Compliance with terms and

conditions of sanction

<=25%

Liability not
exceeding DP / Limit

Liability exceeded
limit occasionally. Excess
drawal adjusted in
stipulated time.

Liability exceeded
frequently and adjusted
with some delay.

Complied with
promptly

Complied with delay

Not complied with

3
0
10
8
4
2
10

3
5
3
0

ARTHIAS PLUS

Target Group

Commission agents (Arthias) of agricultural produce

who are registered with the Market Committee and
possess a license issued by the District Food and
Supplier Department to sell the produce of the

farmers.
Eligibility

Purpose
Type of facilities
Quantum of
Finance
Margin
Classification

Rate of Interest

Commission agents enjoying good reputation

and who have been in this business for at least the
past 3 years and holding a valid license to carry on
his activity.

Commission agents having receivables from

farmers only.
To finance commission agents against receivables
from farmers.
Cash Credit ( Hypothecation of book debts not more
than 6 months old)
Maximum Rs.25 lacs
40%
Indirect AGL. (R/SU Brs.)

In U/M Brs, to be classified under SBF

Segment (up to Rs. 10 lacs) and under
C&I Segment (above Rs. 10 lacs)
AGL/SBF Segment

0.5% below SBAR for limits below Rs.2lacs

At SBAR for limits of Rs 2lacs and upto Rs.10lacs
Under C&I segment (Above Rs.10lacs & upto
Rs.25lacs)
1.10% to 2.50% above SBAR based on CRA Rating
Security:
- Primary
- Collateral

Processing fees
Repayment

Hypothecation of receivables and movable assets if

any
EM of non-agricultural property, either residential or
commercial belonging to the borrower or guarantor
for 1.5 times the loan amount.
As applicable to the segment
To be liquidated within 6 months and to be renewed

Documentation
Special features

annually
As per SBF or C&I Trade advances

A statement of eligible receivables should be

obtained from the borrower and verified with
books of account or audited financial statements.

At the end of every cropping and marketing

season, the borrower should liquidate the out
standings fully

The limit should thereafter be subject to

review/ renewal as per trade advance norms.

ESSENTIALS OF DOCUMENTATION

1
The main purpose of obtaining documents is to secure the advances
and enable the Bank to recover the dues through legal means when all
other recourses fail. Documentation process attempts to ensure the
following:

a)

The owing of the debt to the Bank by the Borrower is clearly

established by the documents.

b)

The charge created on the Borrowers assets as security for the debt is
maintainable and enforceable.

c)

The Banks right to enforce the recovery of the debt through a court of
law
is not allowed to become time-barred under the law of
limitation.

1.2 Documentation assumes special significance in the following

instances:
a)
At times, the Bank has to prove its claim against the legal
representatives, official receiver / liquidator, etc.
b)

The Bank may have to prove its prior charge in respect of assets
charged
to
the Bank against the claims by Government
Departments, other creditors, etc.

c)

It is not uncommon to observe that the Borrower, who is very cooperative at the time of availing the credit facilities and is ready to
sign on dotted lines, ceases to cooperate once the account turns bad.

1.3 As documents form the primary evidence in any dispute between the
Bank and the Borrower, it is imperative that they are correct and valid at all
times. Documentation, therefore, is a continuous and on-going process
covering the entire period of advance.

DOCUMENTATION

(Law and Procedure)

1.4 General
The Loan / security documents are of crucial importance to the Bank
in respect of all loans and advances as they constitute the primary
evidence in any legal proceedings between the Bank and the
Borrower(s) / Guarantor(s). They establish the precise jural
relationship between the Bank and the Borrower(s) / Guarantor(s). In
the absence of properly executed documents, it may be very difficult
for the Bank to succeed in any suit filed in a Court of Law for
enforcing its rights under the documents. The legal protection and
judicial adjudication always requires and depends upon valid
documents.
1.4.1 Object
The object of documentation is to serve as primary evidence for
enforcing the Banks right to recover the contracted debt through
Court of Law in the event of all other recourses proving to be of no
avail. Documentation will succeed in fulfilling this objective only
when the following requirements are met (1) the owing of the debt to
the Bank by the Borrower is established by documents (2) the charge
created on the Borrower's assets as security for the debt is preserved,
protected, perfected and maintained in accordance with the law and
(3) the Banks right to enforce the security for recovery of the debt
through Court of Law is not barred by expiry of limitation under the
Law of Limitation.

1.4.2

Purpose
The purpose of the document is to help in identifying the parties, the
nature and extent of security, for providing evidence of the
transactions, for settling / crystallizing the terms and conditions, for

defining the rights and liabilities of parties or under the securities, for
creating the charges / encumbrances, for protecting the priority of
charges, for computing the period of limitation and lastly for
enforcing the rights under the documents.

INTRODUCTION of SBI
The State Bank India has an unbroken traditional of more than 199 years
of banking. In fact, the 200th anniversary celebrations commenced in
JUNE 2005. Its history is traced back to the Bank of Calcutta (1806),
which received its charter as Bank of Bengal in 1809. There were two

other Banks, Bank Of Bombay(1840) and Bank of Madras(1843) .

These three banks were known as Presidency Bank.
The Presidency Banks were authorized to conduct Government
business and also issue currency notes.
1921:- The Three Presidency Banks amalgamated to form the Imperial
Bank of India (70 branches.) in 1921. The Imperial Bank was conducting
government business exclusively.
RBI was established only in 1935 pursuant to the recommendations of
the HILTON YOUNG COMMISSION. After the formation of RBI, the
Imperial Bank acts as its agent in doing government business and in
maintaining currency chest and small coin depot. RBI was first
established as a Private Bank in 1935 and nationalized later in 1949
1-7-1955:- The All India Rural Credit Survey Committee (Gorwala
Committee) recommended the formation of State Bank of India.
According, SBI as formed as a state partnered and sponsored bank. The
S.B.I was formed under the State Bank of India Act 1955. The S.B.I was
established with the objective of taking banking to the interior and
remote parts of India
Later under the State Bank of India (Subsidiary Bank) Act, the former
state-associated banks were taken over by the S.B.I as its subsidiaries
(currently designated as Associated Banks.)
The Banks registered office in kolkata. The Corporate Centre (formally
called Central office) is in Mumbai. The central Accounts Office is in
kolkata. In terms of SBI Act, RBI should hold a minimum of 55% of the
capital of Bank. The central office is now redesigned as Corporate
Centre to reflect the fact that it is apex office of the Bank; it is also in
tune with the modern business practice.
Presently there are 7 Associate Bank and one Banking Subsidiary, SBI
Commercial and International bank Ltd. The other important particular of
the Bank are (2004-2005)
No. of Branches/Offices
No. of employee
Total assets

9102(March 2005(domestic); Total:9156

2,07,039(March 2004)
Rs.4,59,883Cr.

Total Income
Total Expenditure
Net Profit
Earning per share
Return on Average Assets
Return on equity
Profit per employee(000)
Expenses to Income
Div. Declared
Capital Adequacy
Net NPA/Net Advances
Deposits
Advances

Rs.39,548 Cr.
Rs.35,243 Cr.
Rs.4,304 Cr.
Rs.81.79
0.99%
18.10%
207.50%
49.18%
125%
12.45%
3.48%(dec. from 4.50% in 2000-2003)
Rs.3,67,048 Cr
Rs.2,02,374 Cr

SBIS Organization Structure:-The Bank has been making

periodical changes in its structure, system etc in tune with
environmental demands. The 1972 and 1979 Re-organization and
McKinsey restructuring (1994) have been indicated in the
annexure to this part.

A
Summer Training

REPORT
ON
MARKETING OF SMALL & MEDIUM &
ENTERPRISES LOANS PRODUCTS
CONDUCTED
AT

STATE BANK

OF INDIA, Y.N.R.

Submitted to
Punjab Technical University, Jallandhar
(In the Partial of the requirement for the degree of Master of
Business Administrator)
Session 2009-10

Under the Guidance of: -

Submitted By:
Geeta Rani
University Roll. No. 9203040035
M.B.A. 4th Sem

HARYANA INSTITUTE OF INFORMATION TECHNOLOGY

Introduction of
SBI

Contents

Products

Elements of
Documentation

Suggestion

Conclusion

Declaration

Acknowledgment

Introduction

Preface

SUGGESTIONS

State Bank of India is the Number one amongst the nationalized banks and
the second largest pubic sector bank in the country.
The Bank needs to look at its advertising operations. In todays
environment advertising is the media to reach the public faster. The
bank should adopt more strategic audit its advertising media.
It can also offer some discount in its processing fee and other charges
to exiting customer of SBI as relationship discounts. This will create
goodwill of the bank amongst its customers.
The bank should reduce its processing time that it requires for the
loan.

LIMITATION

1. The study was to be completed in a short time; the time factor puts a
considerable limit on the scope and the extensiveness of the study.
2. Also many execution, officers and agents could not spare much time
answer queries, so many questions had to be either eliminated or
edited to arrive at the conclusion.
3. Due to the limitation of time, area and other factors survey and
analysis is limited.

CONCLUSION

After completing this project, we can conclude that any organization that
wants to lead the market has to adopt some customer-centered strategies.
State Bank Of India is playing full attention to customer care and is
providing good services to its customers

Since it inception it has maintained a consistent and healthy growth in its

operation. The Bank has also a wide array of retail financing including
Advance
against
to
Trader
and
Advance
against
Gold/Silver/Jewellery/Ornaments. The formalities which have to be fulfilled
by the consumer in getting loan are litter bit complex.

Backed by world-class service it has various delivery channels ATMs net

banking. The bank is also reporting high level of profitability in recent years

With this entire Bank is to emerge world-class Indian banks. We wish the
SBI good luck in pursuing further in its endeavors

HIGHLIGHTS OF ANNUAL REPORT-2006-07

Compiled by: Vinay Kumar
Manager (Credit Processing Cell)
Zonal Office, Ranchi, Jharkhand
vinay.kumar@sbi.co.in
09431087573
(Rs. in Crore)

TOTAL INCOME
TOTAL EXPENDITURE
NET PROFIT
EARNING PER SHARE (Rs)
RETURN ON AVG. ASSET%
RETURN ON EQUITY %
EXPENSES TO INCOME%
PROFIT PER EMPLOYEE (IN
THOUSAND)
PAIDUP CAPITAL &
RESERVE
DEPOSITS
ADVANCES
NO. OF DOMESTIC BRANCH
NO. OF FOREIGN OFFICES
CAPITAL ADEQUACY
a.Tier-I
b. Tier-II
NET NPA

2006-07
45260
40719
4541
86.29
0.84
14.24
54.18
236.81

2005-06
43415
39008
4407
83.73
0.89
15.47%
58.70
216.76

% CHANGE
4.25
4.39
3.04
3.06
-(5.26)
-(7.59)

31298

27644

13.22

435521
337336
9517
83
12.34%
8.01
4.33
1.56%

380046
261801
9177
70
11.88%
9.36
2.52
1.88%

14.60
28.85
3.70
18.57
3.87

9.25

-(17.02)

Analysis and
Interpretation

SBI Condensed Annual Report for The Last 3 Years

BUSINESS

31.03.2004

31.03.2005

31.03.2006

Global Deposits

318619

367048

380046

309798

352799

366229

157934

202374

261642

142026

178475

234696

185676

197098

162534

181684

192456

157286

Of which Domestic Deposits

Global Advances
Of which Domestic Advances
Global Investments
Of which Domestic Investments
CD Ratio (on Net Bank Credit)

54.03

60.19

Not Available

Net Profit

3681

4304.52

4406.67

Total Income

38073

39548

43184

Total Expenditure

34392

35243

38777

Capital

526.3

526.3

526.3

Reserves and Surplus

19705

23546

27118

Capital Adequacy (%)

13.53

12.45

11.88

- Tier I

8.34

8.04

9.36

- Tier II

5.19

4.41

2.52

CAPITAL STRUCTURE

Profitability

Interest Income

30460

32428

35795

Non Interest Income

7612

7120

7389

Interest Expenses

19274

18483

20159

Operating Expenses

9245

10074

11725

Provisions & Contingencies (Net)

5872

6686

6893

3703

1204

148

ROE (%)

18.19

18.10

15.47

Dividend (%)

110

125

140

Cost of Deposits (%)

5.48

4.70

4.49

Yield on Advances (%) domestic

8.17

7.68

7.78

Net Interest Margin (NIM) (%)

3.04

3.39

3.40

Operating Expenses/Total Income Ratio

24.28

25.47

27

EPS (for Rs.10 share) in Rs.

69.94

81.79

83.73

Of which provision for NPAs

SBI ANNUAL RESULTS(CONTD)

(Rs. in
Crores)

BUSINESS

31.03.2004
7.75

NPAs as % of Total advances

Net NPAs as % of Net Advances
Balance Sheet Total assets
Return on average assets%
Business per employee

31.03.2005
5.96

3.48

2.65

407815

459883

0.94

0.99

2.11

2.43

31.03.2006
3.88
1.87
493870
0.89
2.99

Profit per employee (net)

(Rs in lacs)

RBI shareholding (%)

Market Share of Aggregate Deposits
Market share of Total Advances
Branches
No. of Overseas Brs/Offices in No. of Countries
No. of ATMs installed
No. of Branches having Internet banking
No. of employees
Of which Officers (%)
- Clerical Staff (%)
- Sub-Staff (%)

2.17

1.77

2.07

59.73

59.73

18.72

18.23

16.76

16.33

9039

9102

54-28

54-28

3814

5000

1110

2225

207039

205515

28.71

29.32

46.17

45.65

25.12

25.03

59.73
16.25
16
9177
70-30
5572
3482
198774
29.51
45.19
25.30

BANK OF BENGAL H.O

BIBLIOGRAPHY

WEBSITS:

nsdl@bom2.vsnl.net.in
www.online.smeproducts.com
mosmep@smeproducts.com

WRITEN MATERIAL:

The Times of India

The Tribune
MOSMEPs Manual
Philip Kotler (Marketing Management)
MOSMEP Journals

Limitation
lAbout SBI and

HISTORY OF SBI

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Evolution

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Not many financial institutions in the

world today can claim the antiquity
and majesty of the State Bank of
India. Founded nearly two centuries
Hindi Vibhag
ago with the primary intent of
imparting stability to the money
market, the Bank from its inception
About GBU
mobilized funds for supporting both
the public credit of the Company's
Governments in the three
Our People
presidencies of British India and the
private credit of the European and
Cross Selling
Indian merchants. From about the 1860s, when the Indian economy took a
Products
significant leap forward under the impulse of quickened world
communications and ingenious methods of industrial and agricultural
Technology@SBI production, the Bank became intimately involved in the financing of
practically every trading, manufacturing and mining activity of the subcontinent. Although large European and Indian merchants and
NBG Business
manufacturers were undoubtedly the principal beneficiaries, the 'small man'
Bulletins
was never ignored as loans as low as Rs.100 were disbursed in agricultural
districts against gold ornaments. Added to these the Bank till the creation of
HR, Staff
the Reserve Bank in 1935 carried out numerous central-banking functions.
Matters, Service
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Adaptation to a changing world and the needs of the hour has been one of
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the strengths of the Bank. In the post-Depression era, for instance, when
business opportunities became extremely restricted, rules laid down in the
book of instructions were relaxed to ensure that good business did not go
past. Yet seldom did the Bank contravene its rules or depart from sound
banking principles to retain or expand its business. An innovative array of
offices, unknown to the world then, was devised in the form of branches,
sub-branches, treasury pay-offices, pay offices, sub-pay offices and
outstations to exploit the opportunities of an expanding economy. New
business strategies were also evolved way back in 1937 to render the 'best
banking service' through 'prompt and courteous' attention to customers.
A highly efficient and experienced management, functioning in a welldefined organizational structure, did not take long to place the Bank on an
exalted pedestal in the areas of business, profitability, internal discipline and
above all credibility. An impeccable financial status, consistent maintenance
of the lofty traditions of banking and observance of a high standard of
integrity in its operations helped the Bank gain a pre-eminent status. No
wonder the admiration for the Bank was universal as key functionaries of the
India Office and Government of India, successive finance ministers of
independent India, Reserve Bank governors and representatives of the
chambers of commerce showered encomiums on it.
Modern day management techniques were also very much evident in the
good old days. Years before corporate governance had become a buzzword,
the Bank's board functioned with a high degree of responsibility and concern
for the shareholder. An unbroken record of profits and a fairly high rate of
dividend all through ensured satisfaction. Prudential management and assetliability management not only protected the interests of the Bank but also
ensured that the obligations to customers were met.

Bank gears itself to meet the emerging challenges of the new millennium.
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Annexure

Finding

Certificate

COMPANY PROFILE

Mission Statement

To retain the bank's position as the Premier Indian Financial Services Group,
with world class standards and significant global business committed to
excellence in customer, shareholder and employee satisfaction and to play a
leading role in the expanding and diversifying financial services sector while
continuing emphasis on its development banking role.

VISION STATEMENT (QUALITATIVE)

Premier Indian Financial Services Group with global perspective, world

class standards of efficiency and professionalism and core institutional
values.
Retain its position in the country as a pioneer in development banking.
Maximize shareholder value through high sustained earnings per share.
An institution with a culture of mutual care and commitment, a
satisfying and exciting work environment and continuous learning
opportunities.

VALUES

Excellence in customer service.

Profit orientation.
Belonging and commitment to the bank.
Fairness in all dealings and relations.
Risk-taking and innovation.
Team-playing.
Learning and renewal.
Integrity.

Transparency and discipline in policies & systems.

BOARD OF DIRECTORS

Directors on the Bank's Central Board as on 11th October 2006

Sl.No
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.

Name of Director
Shri.O. P. Bhatt
Chairman
Shri.T.S.Bhattacharya
Managing Director
Shri.Yogesh Agrawal
Managing Director
Prof. M.S. Swaminathan
Shri. Ajay G.Piramal
Shri. Suman Kumar Bery
Dr. Ashok Junjhunwala
Shri. A.C.Kalita
Shri. Amar Pal
Shri. Arun Singh
Shri. Rajiv Pandey
Shri. Piyush Goyal
Shri. Ashok K Jha
Smt. Shyamala Gopinath

Awards of SBI

Section under
SBI Act
Section19(a)
Section19(b)
Section19(b)
Section19(c)
Section19(c)
Section19(c)
Section19(c)
Section19(ca)
Section19(cb)
Section19(d)
Section19(d)
Section19(d)
Section19(e)
Section19(f)

A. Silver jubilee AwardSh. Arun Kumar

(By S.D Sharma on 0606-2007)
B. Blood Donation Award for SBI Pvddukottai Branch and PB
Manager Sri T.V Rajagopalan
(By CM Pvddukottai Branch on
22-01-2006)
C. SBI BAGS IBA-CH BHABHA Research Award 2006Sri Nivasan
G.
(By K.S Kang on 18-05-2006)
D. Chair mans Club Member-2003-2004.
Corporate Centre, Mumbai on 12-01-06)

(By AGM(HR)

E. Our Colleague Sri B. Madhusudan Rao, is Awarded M.Phill in

Library Science
(By Admin on11-08-2005)
F. Our Colleague Anil Kumar Srivastava wins all expenses paid
European Trip sponsored by the Economic Times.
(By Anil Kumar Srivastava, DM,LHO Lucknow on 03-08-2005
G. AGM, DRTCELL, Sri N.B Toshniwal Awarded DoctorateSri N.B Toshniwal, AGM, DRT Cell, Mumbai on 16-07-05)

(By

H. Shri U,P Singh, AGM(faculty)-SBIICM Hyderabad wins first

prize in Inter Bank Hindi Essay Competition 2004-2005
(By
SBICM, Hyderabad on 10-07-2005)
I. Winners of whole Bank level Trainers Trophy(2003-2004)
(Congratulations By Principal SBI, RD Hyderabad on 12-03-2005)

ANAYSIS DATA

TOTAL INCOME
TOTAL EXPENDITURE
NET PROFIT
EARNING PER SHARE (Rs)
RETURN ON AVG. ASSET%
RETURN ON EQUITY %
EXPENSES TO INCOME%
PROFIT PER EMPLOYEE (IN
THOUSAND)
PAIDUP CAPITAL &
RESERVE
DEPOSITS
ADVANCES
NO. OF DOMESTIC BRANCH
NO. OF FOREIGN OFFICES
CAPITAL ADEQUACY
a. Tier-I
b. Tier-II
NET NPA

2009-10
45260
40719
4541
86.29
0.84
14.24
54.18
236.81

2008-09
43415
39008
4407
83.73
0.89
15.47%
58.70
216.76

% CHANGE
4.25
4.39
3.04
3.06
-(5.26)
-(7.59)

31298

27644

13.22

435521
337336
9517
83
12.34%
8.01
4.33
1.56%

380046
261801
9177
70
11.88%
9.36
2.52
1.88%

14.60
28.85
3.70
18.57
3.87

9.25

-(17.02)

DATA OF SBI BANK

4407

2005-06

4541

2006-07
0

39008
40719
43415
45260

10000 20000 30000 40000 50000

TOTAL INCOME
% CHANGES

TOTAL EXPENDITURE

SME
ADVANCE

FINANCIAL PERFORMANCE
1. PROFIT: The operating profit of the Bank is Rs.9999.94 cr (which is
arrived at after reckoning amortization loss of Rs.1677.51 cr) compared to
Rs.11299.23 crore in 2005-06. It would appear that operating profit has
declined sharply. However, if the previous figure are regrouped on the lines
of current year, the operating profit for fy 2008-09would stand revised to
Rs.8248.99 cr (after regrouping the figures on the lines of the recent RBI
Circular on treatment of amortization of Rs.3050.24 cr), which would mean
a growth of 21.23% in operating profit. The Bank has posted Net Profit of
Rs.4531.31 cr compared to Rs.4406.67 cr as on 08-09 registering a growth
of 3.04%.
Net Interest Income recorded growth of 2.98% and other income
increased (on regrouped figures) by 31.57%. The gains were largely
offset by increase of 14.94% in interest expanded. Operating expanses
remained controlled with marginal increase of 0.84%.
2. DIVIDEND: The Bank has declared a dividend of 140%.
3. NET INTEREST INCOME: Net Interest income has registered a growth
of 2.98% from Rs.15589.13 cr in 05-065 to 16054.21 cr in 09-10.
This is due to growth in interest income on advances. The Net Interest
Margin was at healthy 3.31% in 2009-10.
The gross interest income from global operations rose from Rs.35979.57 cr
in 08-09to Rs.39491.03 cr in 09-10.
This is due to higher interest income on advances. Interest income on
advances increased from Rs.16405.70 cr in 08-09to Rs.22872.66 cr in 0910.
This is due to higher volume.
Average yield on advances in India increased from 7.78% in 08-09to 8.67%
in 09-10.

Income from resources deployed in treasury operations in India declined by

21.18% due to decline both in average yield and the average resources
deployed. The average yield, which was 7.10% in 08-09declined to 6.88%
in 09-10.
This is due to declining trend in the interest rates.
Total interest expenses of the global operations increased from Rs.20390.44
cr. in 08-09to Rs.23436.82 cr in 2009-10. Interest expenses on deposit in
India recorded an increase of 4.58% compared to previous year. Average
level of deposits in India grew by 9.70%. This resulted in an increase in
average cost of deposit from 4.57% in 08-09to 4.79% in 2009-10.
4. NON INTEREST INCOME:
Non interest income stood at Rs.5768.25 cr as against Rs.7435.20 cr in
2005-06. However, in view of the RBI Circular on treatment of amortization,
the Non Interest Income in previous year stands revised to Rs.4384.96 cr
resulting a growth of 31.57%. Loss on revaluation of investment declined
from Rs.3050.24 cr in 2008-09to Rs.1677.51 cr in 2009-10.
During the year, the Bank received an income of Rs. 596.97 cr (Rs.317.18 cr
in 05-06) by the way of dividend from Associate Banks/ subsidiaries and
Joint Ventures in India and abroad.
5. OPERATING EXPENSES: There was marginal decline of 2.34% in the
staff cost from Rs.8123.04 cr in 08-09to Rs.7932.58 cr in 09-10. Staff cost
included an amount of Rs.478.30 cr (Previous year Rs.72.24 cr) paid
towards Ex-gratia payment under Exit Option Scheme.
Other Operating expenses have also registered an increase of 8.01%
This is mainly due to increase in expenses on rent, taxes and lighting,
insurance, postage, telegrams and telephones, repairs and maintenance
and miscellaneous expenses.
Total operating expenses have registered an increase of 0.84%.

6. PROVISIONS AND CONTINGENCIES: Major amount of provisions

are as under:

Rs.379.23 cr towards provision for deprecation on investments,

excluding amortization of premium on Held to Maturity category
( as against Rs.3898.50 cr including amortization of premium on
Held to Maturity category in 2005-06)
Rs.3014.61 cr towards provision for income tax including deferred
tax credit of Rs.19.83 cr ( as against Rs.2040.60 cr in 0809adjusted for deferred tax debit of Rs. 357.89 cr
Rs.589.19 cr towards Standard Asset (Rs.405.17 cr in 05-06) Total
provision for Standard Asset has become Rs.1502.32 crore.
Rs.88.50 cr towards Fringe Benefit Tax.(147.81 in 05-06).
Rs.1429.50 cr (net of write back) for non-performing asset
( Rs.147.81 cr in 05-06)

7. RESERVES & SURPLUS:

An amount of Rs.3358.11 cr (Rs.2933.77 cr in 05-06) was transferred to
Investment Statutory Reserve.
An amount of Rs. 321.15 cr. (Rs.632.74 cr in 05-06) was transferred to other
reserve.
8. ASSETS:
The total asset of the bank increased by 14.68%, from Rs.4,94,028.95 cr in
08-09to Rs.5,66,565.24 cr in 09-10.
During the period Loan portfolio increased by 28.85%, from 2,61,801.00 cr
in 08-09to 3,37,336.49 cr in 09-10.
Investment declined by 8.23%, from 1,62,534.24 cr in 08-09to 1,49,148.88
cr in 09-10.
The Bank's market share in domestic advance was 15.55%as of
March'2007.
9. LIABILITIES:

The Banks aggregate liabilities (excluding capital & reserves) rose by

14.76%, from 4,,66,384.87 cr in 08-09to 5,65,266.68 cr in 09-10.
This is mainly due to increase in deposits and borrowings.
The global deposit stood at Rs.4,35,521.09 cr. An increase of 14.60% over
March 06.
Banks market share in aggregate deposit of all schedule commercial
banks in India stood at 14.91%.
10. TREASURY OPERATIONS:
The overall domestic investment portfolio declined from Rs.1,59,289.00 cr
in 08-09to Rs. 1,36,927.00 cr in 09-10.
The 10 year G-Sec benchmark yield increased from 7.52% in 08-09to 7.97%
in 09-10.
Profits from Equity Portfolio increased by 68.55% from Rs.193.00 cr to
Rs.325.00 cr.
Average yield on treasury operations net of income on CRR Balances held
increased from 7.64% to 7.67%.
Trading volumes in forex operations increased substantially thereby
increasing income from forex operation from Rs.81.54 cr in 08-09to
Rs.202.20 cr in 09-10, registering a growth of 147.98%.