CHAPTER NO: 1 INTRODUCTION
1.1 EVOLUTION
The origin of the State Bank of India goes back to the first decade of the nineteenth century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. Three years later the bank received its charter and was re- designed as the Bank of Bengal (2 January 1809). A unique institution, it was the first joint-stock bank of British India sponsored by the Government of Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July 1843) followed the Bank of Bengal. These three banks remained at the apex of modern banking in India till their amalgamation as the Imperial Bank of India on 27 January 1921. Primarily Anglo-Indian creations, the three presidency banks came into existence either as a result of the compulsions of imperial finance or by the felt needs of local European commerce and were not imposed from outside in an arbitrary manner to modernize India's economy. Their evolution was, however, shaped by ideas culled from similar developments in Europe and England, and was influenced by changes occurring in the structure of both the local trading environment and those in the relations of the Indian economy to the economy of Europe and the global economic framework.
Bank of Bengal H.O. Establishment The establishment of the Bank of Bengal marked the advent of limited liability, joint stock banking in India. So was the associated innovation in banking, viz. the decision to allow the Bank of Bengal to issue notes, which would be accepted for payment of public revenues within a restricted geographical area. This right of note issue was very
1 valuable not only for the Bank of Bengal but also its two siblings, the Banks of Bombay and Madras. It meant an accretion to the capital of the banks, a capital on which the proprietors did not have to pay any interest. The concept of deposit banking was also an innovation because the practice of accepting money for safekeeping (and in some cases, even investment on behalf of the clients) by the indigenous bankers had not spread as a general habit in most parts of India. But, for a long time, and especially up to the time that the three presidency banks had a right of note issue, bank notes and government balances made up the bulk of the investible resources of the banks. The three banks were governed by royal charters, which were revised from time to time. Each charter provided for a share capital, four-fifth of which were privately subscribed and the rest owned by the provincial government. The members of the board of directors, which managed the affairs of each bank, were mostly proprietary directors representing the large European managing agency houses in India. The rest were government nominees, invariably civil servants, one of whom was elected as the president of the board.
Group Photogaph of Central Board (1921) Business The business of the banks was initially confined to discounting of bills of exchange or other negotiable private securities, keeping cash accounts and receiving deposits and issuing and circulating cash notes. Loans were restricted to Rs.one lakh and the period of accommodation confined to three months only. The security for such loans was public securities, commonly called Company's Paper, bullion, treasure, plate, jewels, or goods 'not of a perishable nature' and no interest could be charged beyond a rate of twelve percent. Loans against goods like opium, indigo, salt woollens, cotton, cotton piece goods, mule twist and silk goods were also granted but such finance by way of cash credits gained momentum only from the third decade of the nineteenth century. All commodities, including tea, sugar and jute, which began to be financed later, were either pledged or hypothecated to the bank. Demand promissory notes were signed by the borrower in favour of the guarantor, which was in turn endorsed to the bank. Lending against shares of the banks or on the mortgage of houses, land or other real property was, however, forbidden.
2 Indians were the principal borrowers against deposit of Company's paper, while the business of discounts on private as well as salary bills was almost the exclusive monopoly of individuals Europeans and their partnership firms. But the main function of the three banks, as far as the government was concerned, was to help the latter raise loans from time to time and also provide a degree of stability to the prices of government securities.
Old Bank of Bengal Major change in the conditions A major change in the conditions of operation of the Banks of Bengal, Bombay and Madras occurred after 1860. With the passing of the Paper Currency Act of 1861, the right of note issue of the presidency banks was abolished and the Government of India assumed from 1 March 1862 the sole power of issuing paper currency within British India. The task of management and circulation of the new currency notes was conferred on the presidency banks and the Government undertook to transfer the Treasury balances to the banks at places where the banks would open branches. None of the three banks had till then any branches (except the sole attempt and that too a short lived one by the Bank of Bengal at Mirzapore in 1839) although the charters had given them such authority. But as soon as the three presidency bands were assured of the free use of government Treasury balances at places where they would open branches, they embarked on branch expansion at a rapid pace. By 1876, the branches, agencies and sub agencies of the three presidency banks covered most of the major parts and many of the inland trade centres in India. While the Bank of Bengal had eighteen branches including its head office, seasonal branches and sub agencies, the Banks of Bombay and Madras had fifteen each.
3 Bank of Madras Note Dated 1861 for Rs.10 Presidency Banks Act The presidency Banks Act, which came into operation on 1 May 1876, brought the three presidency banks under a common statute with similar restrictions on business. The proprietary connection of the Government was, however, terminated, though the banks continued to hold charge of the public debt offices in the three presidency towns, and the custody of a part of the government balances. The Act also stipulated the creation of Reserve Treasuries at Calcutta, Bombay and Madras into which sums above the specified minimum balances promised to the presidency banks at only their head offices were to be lodged. The Government could lend to the presidency banks from such Reserve Treasuries but the latter could look upon them more as a favour than as a right.
Bank of Madras The decision of the Government to keep the surplus balances in Reserve Treasuries outside the normal control of the presidency banks and the connected decision not to guarantee minimum government balances at new places where
4 branches were to be opened effectively checked the growth of new branches after 1876. The pace of expansion witnessed in the previous decade fell sharply although, in the case of the Bank of Madras, it continued on a modest scale as the profits of that bank were mainly derived from trade dispersed among a number of port towns and inland centres of the presidency. India witnessed rapid commercialisation in the last quarter of the nineteenth century as its railway network expanded to cover all the major regions of the country. New irrigation networks in Madras, Punjab and Sind accelerated the process of conversion of subsistence crops into cash crops, a portion of which found its way into the foreign markets. Tea and coffee plantations transformed large areas of the eastern Terais, the hills of Assam and the Nilgiris into regions of estate agriculture par excellence. All these resulted in the expansion of India's international trade more than six-fold. The three presidency banks were both beneficiaries and promoters of this commercialization process as they became involved in the financing of practically every trading, manufacturing and mining activity in the sub-continent. While the Banks of Bengal and Bombay were engaged in the financing of large modern manufacturing industries, the Bank of Madras went into the financing of large modern manufacturing industries, the Bank of Madras went into the financing of small-scale industries in a way which had no parallel elsewhere. But the three banks were rigorously excluded from any business involving foreign exchange. Not only was such business considered risky for these banks, which held government deposits, it was also feared that these banks enjoying government patronage would offer unfair competition to the exchange banks which had by then arrived in India. This exclusion continued till the creation of the Reserve Bank of India in 1935.
Bank of Bombay Presidency Banks of Bengal The presidency Banks of Bengal, Bombay and Madras with their 70 branches were merged in 1921 to form the Imperial Bank of India. The triad had been transformed into a monolith and a giant among Indian commercial banks
5 had emerged. The new bank took on the triple role of a commercial bank, a banker's bank and a banker to the government. But this creation was preceded by years of deliberations on the need for a 'State Bank of India'. What eventually emerged was a 'half-way house' combining the functions of a commercial bank and a quasi-central bank. The establishment of the Reserve Bank of India as the central bank of the country in 1935 ended the quasi-central banking role of the Imperial Bank. The latter ceased to be bankers to the Government of India and instead became agent of the Reserve Bank for the transaction of government business at centres at which the central bank was not established. But it continued to maintain currency chests and small coin depots and operate the remittance facilities scheme for other banks and the public on terms stipulated by the Reserve Bank. It also acted as a bankers' bank by holding their surplus cash and granting them advances against authorised securities. The management of the bank clearing houses also continued with it at many places where the Reserve Bank did not have offices. The bank was also the biggest tenderer at the Treasury bill auctions conducted by the Reserve Bank on behalf of the Government. The establishment of the Reserve Bank simultaneously saw important amendments being made to the constitution of the Imperial Bank converting it into a purely commercial bank. The earlier restrictions on its business were removed and the bank was permitted to undertake foreign exchange business and executor and trustee business for the first time. Imperial Bank The Imperial Bank during the three and a half decades of its existence recorded an impressive growth in terms of offices, reserves, deposits, investments and advances, the increases in some cases amounting to more than six-fold. The financial status and security inherited from its forerunners no doubt provided a firm and durable platform. But the lofty traditions of banking which the Imperial Bank consistently maintained and the high standard of integrity it observed in its operations inspired confidence in its depositors that no other bank in India could perhaps then equal. All these enabled the Imperial Bank to acquire a pre-eminent position in the Indian banking industry and also secure a vital place in the country's economic life.
6 Stamp of Imperial Bank of India When India attained freedom, the Imperial Bank had a capital base (including reserves) of Rs.11.85 crores, deposits and advances of Rs.275.14 crores and Rs.72.94 crores respectively and a network of 172 branches and more than 200 sub offices extending all over the country. First Five Year Plan In 1951, when the First Five Year Plan was launched, the development of rural India was given the highest priority. The commercial banks of the country including the Imperial Bank of India had till then confined their operations to the urban sector and were not equipped to respond to the emergent needs of economic regeneration of the rural areas. In order, therefore, to serve the economy in general and the rural sector in particular, the All India Rural Credit Survey Committee recommended the creation of a state partnered and state-sponsored bank by taking over the Imperial Bank of India, and integrating with it, the former state-owned or state-associate banks. An act was accordingly passed in Parliament in May 1955 and the State Bank of India was constituted on 1 July 1955. More than a quarter of the resources of the Indian banking system thus passed under the direct control of the State. Later, the State Bank of India (Subsidiary Banks) Act was passed in 1959, enabling the State Bank of India to take over eight former State-associated banks as its subsidiaries (later named Associates). The State Bank of India was thus born with a new sense of social purpose aided by the 480 offices comprising branches, sub offices and three Local Head Offices inherited from the Imperial Bank. The concept of banking as mere repositories of the community's savings and lenders to creditworthy parties was soon to give way to the concept of purposeful banking sub serving the growing and diversified financial needs of planned economic development.
7 The State Bank of India was destined to act as the pacesetter in this respect and lead the Indian banking system into the exciting field of national development.
CHAPTER NO: 2 CONCEPTUAL DATA
MISSION, VISION & VALUES
VISION
8 My SBI.
My Customer first.
My SBI: First in customer satisfaction
MISSION
We will be prompt, polite and proactive with our customers.
We will speak the language of young India.
We will create products and services that help our customers achieve their goals.
We will go beyond the call of duty to make our customers feel valued.
We will be of service even in the remotest part of our country.
We will offer excellence in services to those abroad as much as we do to those in India.
We will imbibe state of the art technology to drive excellence.
VALUES
We will always be honest, transparent and ethical.
We will respect our customers and fellow associates.
We will be knowledge driven.
We will learn and we will share our learning.
We will never take the easy way out.
We will do everything we can to contribute to the community we work in.
We will nurture pride in India
9 Scope The company's strengths and weaknesses and areas of development or decline are analyzed. Financial, strategic and operational factors are considered. The opportunities open to the company are considered and its growth potential assessed. Competitive or technological threats are highlighted. The report contains critical company information - business structure and operations, the company history, major products and services, key competitors, key employees and executive biographies, different locations and important subsidiaries. It provides detailed financial ratios for the past five years as well as interim ratios for the last four quarters. Financial ratios include profitability, margins and returns, liquidity and leverage, financial position and efficiency ratios.
10 PRODUCTS AND SERVICES Personal Banking SBI Term Deposits SBI Loan For Pensioners SBI Recurring Deposits Loan Against Mortgage Of Property SBI Housing Loan Loan Against Shares & Debentures SBI Car Loan Rent Plus Scheme SBI Educational Loan Medi-Plus Scheme Other Services Agriculture/Rural Banking NRI Services 125 ATM Services Demat Services Corporate Banking Internet Banking Mobile Banking International Banking Safe Deposit Locker RBIEFT E-Pay E-Rail SBI Vishwa Yatra Foreign Travel Card Broking Services Gift Cheques The State Bank of India provides a wide range of accounts which are easy to open and use. The bank also allows online operation of the accounts. Any body who desires to have SBI account can easily open an account. SBI accounts are now available for all like senior citizens, employed people, students, in short for each and every citizen of India. Opening an SBI account requires following the below mentioned simple steps: For Indian Residents: If opening in person then collection of an application form and properly filling
11 the form is required. If opening online downloading the form, filling the form and sending it back to the bank authorities is required. Identity proofs like photocopies of passport, pan card, driving license, voter ID card. As residence proofs photocopies of the above mentioned documents. Two photographs of the customer. 126 • For Non Resident Indians: The application form properly filled and signed by the SBI official or the consulate of the Indian embassy. Photocopies of passport, visa and work permit of the country. Details of other bank accounts if any. Photographs of the person himself / herself. • SBI allows different types of bank account each with their respective features, some are given below: SBI savings account – Safe deposits of savings, earning interest on the deposits. SBI salary account – Managing the salary, quick and easy credit of the amount. SBI NRI account – Transactions and savings, transfer of currencies. SBI business account – Easy transfer of money, outstation usable cheque facilities. SBI internet banking – Fast and easiest method of money transfer and transaction. SBI no frills account – Zero balance account, low service charges. SBI current account – easy transfer of money among different branches, availability of ATM cum debit card. State Bank of India (SBI) is the largest bank in India.
CHAPTER NO: 3 DATA AND ITS ANALYSIS
12 1. You are a customer of which bank?
SBI ICICI HDFC OTHER
Bank Number of Respondents SBI 20% ICICI 15% HDFC 0% OTHER 65%
BANK
20%
SBI ICICI HDFC OTHER
15% 65%
CONCLUSION:- From the above table and chart, this can be seen that out of the total respondents every respondent having account in the OTHER bank but SBI has more customers than ICICI and HDFC. The ICICI is also has more customers than HDFC.
13 2. What is your occupation?
Self-Employed Employee Employer Corporate Business Others
Occupation Number of respondents
Self-Employed 45%
Employee 40%
Employer 0%
Corporate Business 0%
Others 15%
OCCUPATION
number of respondents
45% 40% 15%
0% 0% self-employed employee employer corporate business others
CONCLUSION:- So it is concluded that the self-employed occupation is more than others and it is 45%. The next occupation is employee is of 40% is also more than other three and others occupation is of 15% are also more than other two.
14 3. Which type of account holder you are?
Individual Partnership Joint A/C Other
Type of account holder Number of respondents Individual 70% Partnership 0% Joint A/C 25% Other 5%
TYPE OF ACCOUNT HOLDER
80%
70% 70% 60%
50% number of respondents 40%
30%
20% 25%
10% 0% 0% 5% individual partnership joint a/c other
CONCLUSION:- As per the survey is concerned the individual account holder is of 70% and it is more than the others. The joint account holder is of 25% and the other type of account holder is of 5%.
15 4. Which type of account do you have with bank?
Saving Recurring Current Fixed
Type of account Number of respondents Saving 85% Recurring 0% Current 0% Fixed 15%
type of account
fixed; 15%
saving recurring current fixed saving; 85%
CONCLUSION:- From the total number of respondents is of 20 people the number of respondents in the saving account is of 85% and it is more than the other type of account. The fixed account is of 15% and is more than the other two account type.
16 5. Do you feel that the procedure to open an account with the bank was difficult?
Yes, to a certain extent No, it was easy
Open an account Number of respondents
Yes 15%
No 85%
90%
80%
70%
60%
50% number of respondents 40%
30%
20%
10%
0% yes no
CONCLUSION:- The procedure to open an account with the bank is easy, it was not difficult the number of respondents feel. The 85% of number of respondent answered that the procedure is easy.
17 6. Do you agree that minimum account limit is not high and easy to maintain?
Strongly Agree Agree Somewhat Agree Disagree
Minimum account limit Number of respondents Strongly Agree 5% Agree 80% Somewhat Agree 10% Disagree 5%
number of respondents
5% 5% 10%
strongly agree agree somewhat agree disagree
80%
CONCLUSION:- The total number of respondents answered that the minimum account balance is easy to maintain. From the total number of respondents is of 20 people and 80% number of respondents said that it is not difficult to maintain the minimum account balance.
18 7. How satisfied are you with the services provided by the bank?
Very satisfied Satisfied Somewhat satisfied Dissatisfied
Services Number of respondents Very Satisfied 15% Satisfied 70% Somewhat Satisfied 15% Dissatisfied 0%
15% 15%
70%
very satisfied satisfied somewhat satisfied dissatisfied
CONCLUSION:-
From the above table and chart, this can be seen that out of total respondents 70% respondents have satisfied with services provided by bank. The 15% respondents have very satisfied and 15% of respondents have somewhat satisfied.
19 8. Describe the overall relationship between you and bank?
Poor Very poor Good Excellent
Relationship Number of respondents Poor 5% Very Poor 0% Good 90% Excellent 5%
90% 80% 70% 60% 50% 90% 40% 30% 20% 10% 5% 0% 5% 0% poor very poor good excellent number of respondents
CONCLUSION:- The number of respondents answered that their relationship with bank is good. The 5% respondents answered that their relationship is excellent and 5% respondents answered that their relationship is poor.
20 9. How many times have you faced a problem related to your banking account in the last 1 year?
Once 1-5 times More than 10 times Never
Problems Number of respondents
Once 40%
1-5 Times 5%
More Than 10 Times 5%
Never 50%
number of respondents
60%
50% 50% 40% 40% number of respondents 30%
20%
10%
5% 5% 0% once 1-5 times more than 10 times never
CONCLUSION:- The 50% respondents never faced a problem related to a banking account in the last one year. The 40% respondents faced a problem at once in the last one year. The remaining 5% respondents faced a problem one to five times and 5% respondents faced a problem more than 10 times in the last one year.
21 10. Is your business handled by banking executives in a timely and efficient manner?
Always Sometimes Rarely Never
Business handled Number of respondents Always 25% Sometimes 50% Rarely 15% Never 10%
50% 45% 40% 35% 30% 50% 25% 20% 15% 25% 10% 15% 10% 5% 0% always sometimes rarely never
number of respondents
CONCLUSION:-
The 50% respondents answered that their business handled by banking executives in a timely and efficient manner. The remaining respondents answered that 25%, 15% and 10% respondents business handled by banking executives is always, rarely and never in a timely manner.
22 11. How long have you had these accounts in the bank?
Less than a year 1-3 years 3-8 years More than 8 years
Long accounts Number of respondents
Less Than A Year 15%
1-3 Years 20%
3-8 Years 35%
More Than 8 Years 30%
number of respondents
40% 35% 35% 30% 30% 25% 20% 20% 15% number of respondents 15% 10% 5% 0%
CONCLUSION:- The 35% of the total number of respondents has account with the bank for 3-8 years. The 30% number of respondents has more than 8 years with the bank. The 20% respondents have 1-3 years account with the bank. The remaining 15% respondents have account with the bank for less than a year.
23 12. How would you rate your bank on a scale of 4?
Excellent Good Neutral Poor
Bank rated Number of respondents Excellent 15% Good 75% Neutral 10% Poor 0%
number of respondents
excellent good neutral poor
10% 15%
75%
CONCLUSION:- From the survey concluded that 75% total number of respondents rated that bank is good. The 15% respondents rated excellent and remaining 10% rated the bank is neutral.
24 13. Would you recommend to your acquaintances, to open an account with your bank?
Yes No
Recommend to acquaintances Number of respondents
Yes 80%
No 20%
number of respondents
20%
yes no
80%
CONCLUSION:- From the above chart and table, the 80% number of respondents answered yes they will recommend to their acquaintances to open an account with their bank. The remaining 20% respondents answered no.
25 14. Which of the following associations do you have with the bank?
Banking Credit cards Loans Investing Others
Associations Number of respondents Banking 75% Credit Cards 5% Loans 10% Investing 5% Others 5%
75% 80%
70%
60%
50%
40%
30%
20% 10% 5% 5% 5% 10%
0% banking credit cards loans investing others number of respondents
CONCLUSION:- The 75% numbers of respondents have their banking associations with their bank. The 10% respondents have their loan associations. The remaining 5% each is of investing, credit cards and others associations with their bank.
26 15. Would you like suggest any changes or improvement in any service or any feature of the bank
Changes or improvement Number of respondents
Yes 45%
No 55%
number of respondents
45% yes 55% no
CONCLUSION:-
From the above table and chart we can see that the 45% of the respondents answered yes and the remaining 55% answered no for suggestion related to the changes or improvement in any service or any feature of the bank.
DATA COLLECTION Sample of study:- 27 The sample for this study consisted of 20 respondents. The selected respondents in the age group of 20-60 years belonged to varied employment, gender and income groups. Convenient sampling technique was applied in selecting respondents as sample.
Data source:-
The study is based on primary and secondary data.
1) Primary data:-
A self-designed questionnaire consists of first and second part, which deals with the respondent’s perception, was used for the purpose of primary data collection.
2) Secondary data:-
Secondary data have been collected from the journals, different books and websites.
3) Data analysis:-
The data collected from various sources have been analyzed by using the techniques of simple percentages, averages etc.
28 CHAPTER NO: 4 FINDINGS
The most of the respondents has an account in the SBI bank Most of the respondents is self employed 70% of the respondents are individual account holder From the total number of respondents 85% have saving accounts The procedure of the bank to open an account is easy to certain extent an account is easy to certain extent answered by the 85% of respondents The 80% number of respondents said that it is not difficult to maintain the minimum account balance 70% are satisfied with services provided by the bank and 90% respondents answered that their relationship with bank is good Some of them faces problem in bank account 50% respondents said that sometimes the banking staff provide timely and efficient services 75% of the respondents rated the bank as good and 75% of the respondents have their banking association with the bank.
29 CHAPTER NO: 5 CONCLUSION
From the analysis part it can be conclude that customers have a good respond towards SBI. SBI is in 1 st position having large number of customers & providing good services to them. The bank has a wide customer base, so the bank should concentrate on this to retain these customers.
In present scenario SBI is the largest advance product issuer in India. Within a very short period of time the achievement made by SBI is excellent, what a normal bank cannot expect, but it is being done by SBI. It happens due to employee dedication towards the organization, fastest growing Indian economy, & brand image.
To be the largest advance product issuer, SBI should focus on-
Launch Innovative product Customized advance products Better customer services Fastest customers problem solving techniques Customer retention Apart from all the above, SBI believe in providing good customer services to their customers which is a key factor for success in future.
30 CHAPTER NO: 6 APPENDIX
6.1 ANNEXURE-QUESTIONNAIRE
NM COLLEGE OF COMMERCE & ECONOMICS
Name: ______Address: ______Email Id: ______Mobile Number: ______
1. You are a customer of which bank? A) SBI B) ICICI C) HDFC D) OTHER
2. What is your occupation?
A) Self-Employed B) Employee C) Employer D) Corporate Business
3. Which type of account holder you are? A) Individual B) Partnership C) Joint A/C D) Other
4. Which type of account do you have with bank? A) Saving B) Recurring C) Current D) Fixed
5. Do you feel that the procedure to open an account with the bank was difficult? A) Yes, to a certain extent B) No, it was easy
31 6. Do you agree that minimum account limit is not high and easy to maintain? A) Strongly Agree B) Agree C) Somewhat Agree D) Disagree
7. How satisfied are you with the services provided by the bank? A) Very satisfied B) Satisfied C) Somewhat satisfied D) Dissatisfied
8. Describe the overall relationship between you and bank? A) Poor B) Very poor C) Good D) Excellent
9. How many times have you faced a problem related to your banking account in the last 1 year?
A) Once B) 1-5 times
C) More than 10 times D) Never
10. Is your business handled by banking executives in a timely and efficient manner?
A) Always B) Sometimes
C) Rarely D) Never
11. How long have you had these accounts in the bank?
A) Less than a year B) 1-3 years
C) 3-8 years D) More than 8 years
12. How would you rate your bank on a scale of 4? A) Excellent B) Good C) Neutral D) Poor
13. Would you recommend to your acquaintances to open an account with your bank? A) Yes B) No
32 14. Which of the following associations do you have with the bank?
A) Banking B) Credit cards
C) Loans D) Investing
E) Others
15. Would you like suggest any changes or improvement in any service or any feature of the bank
33