comparartive study of public banks and

COMPARARTIVE STUDY OF PUBLIC BANKS AND CO-OPERATIVE BANKS

COMPARARTIVE STUDY OF PUBLIC BANKS AND

CO-OPERATIVE BANKS (WITH SPECIAL REFERENCE TO

STATE BANK OF INDIA-THANE JANATA SAHAKARI BANK)

Dissertation submitted to the ALAGAPPA UNIVERSITY in partial

fulfillment of the requirements for the award of the Degree of

MASTER OF PHILOSOPHY

IN

COMMERCE

By

Miss LADI NUTAN VASANT

{Enrolment No.066030360}

GUIDED BY

Dr. Mrs. Anita Manna

DIRECTORATE OF DISTANCE EDUCATION

ALAGAPPA UNIVERSITY,

Karaikudi-630003

2011

1


Acknowledgement

On the completion of this project I would like to take this opportunity as a

platform to thank all the people who helped me in this work and who made

this project a success.

I express my heartfelt gratitude and thanks to Dr.Anita Manna for his

guidance and support throughout this project. I am also thankful to him for

giving his suggestions and encouragement throughout the project work and

helping me continuously at each and every stage.

I would like to thank my parents for their blessings. I would fail in my duty

if i do nit thank my husband for his cooperation and continuous support,

completion of this task was not possible. My deepest gratitude to all persons

who helped me directly or indirectly in completing dissertation.

2


DECLARATION

I hereby declare that the dissertation entitled

“COMPARARTIVE STUDY OF PUBLIC BANKS AND


STATE BANK OF INDIA-THANE JANATA SAHAKARI BANK)”

submitted for the M.Phil degree is my original research work and the

dissertation has not formed the basis for the award of any degree, associate

ship or fellowship or any other similar titles.

Place Signature of student

Date

3


CERTIFICATE

This is to certify that the dissertation entitled

“COMPARARTIVESTUDY OF PUBLIC BANKS AND


STATE BANK OF INDIA-THANE JANATA SAHAKARI BANK)” is

the bonafide research work carried out by LADI NUTAN VASANT student

of M.Phil (Commerce)Distance Education,Alagappa University , Karaikudi ,

during the year 2011, in partial fulfillment of the requirement for the award

of the degree of Master of Philosophy.

4


TABLE OF CONTENTS

SR.NO TOPICS PAGE

NO.

1. LIST OF TABLES 7

2. LIST OF DIAGRAM/CHARTS/GRAPHS 8

3 CHAPTER 1

INTRODUCTION-

INTRODUCTION

REVIEW OF LITERATURE

STATEMENT OF THE PROBLEM

OBJECTIVE OF THE STUDY

RESEARCH METHODOLOGY

SCOPE OF THE STUDY

LIMITATION S OF THE STUDY

9-48

49

50

51

52-54

55

564. CHAPTER 2

COMPANY PROFILE & PRODUCT PROFILE

OF THE BANKS COVERED

IN THE STUDY

INTRODUCTION

STATE BANK OF INDIA

THANA JANATA SAHAKARI BANK

57-84

85-96

5


5. CHAPTER 3

FINANCIAL PERFORMANCE OF STATE BANK

OF INDIA

FINANCIAL PERFORMANCE OF THANE JANATA

SAHAKARI BANK

106-107

108-110

6. CHAPTER 4

COMPARISIONS OF LATEST SERVICE PROVIDED

OF SBI

122-131

7 CHAPTER 5

FINDINGS,SUGGESTIONS & CONCLUSIONS

FINDINGS

SUGGESTIONS

CONCLUSION

8. BIBLIOGRAPHY

6


LIST OF TABLE

7

SR

NO.

TABLE

NO.

PAGE NO.

1. 1 Scheduled urban co-

operative banks

45-48

2. 2.1 Domestic term deposits 97

3. 2.2 Interest rates on domestic

term deposits

98-99

4. 3.1 SBI easy home loan 100

5. 3.2 SBI advantage home loan 101

6. 4 Education loan scheme-SBI

Student Loan Scheme

102

7. 5 Housing loan-Interest Rates

of TJSB

103

8. 6 SWAYAM SIDDHA

Scheme of TJSB

104-105


LIST OF DIAGRAMS/CHARTS/GRAPHS

SR

NO.

FIGURE

NO.

TITLE PAGE

NO.

1 1.1 Liquidity Ratio-Current ratio of last 5

years of SBI

111

2 1.2 Quick ratio of last 5 years of SBI 112

3 2.1 Profitability ratio- Net profit of SBI 113

3 2.2 Operating Profit ratio of SBI 114

4 3 Capital Structure Ratio-Debt equity

ratio

115

5 4 Deposits and Advances 116

6 5 Earnings and Dividend per Share 116

7 6.1 Current ratio of last 5 years of TJSB 117

8 6.2 Quick ratio of last 5 years of TJSB 118

7 Deposits and Advances 119

9 8 Debt equity ratio of TJSB 120

10 9 Gross Profit & Net Profit ratio of TJSB 121

8


Chapter1.

Introduction

A bank is the place where they accept deposits from people and lend loans

and charge interest on them and performs agency functions, and provide

certain facilities like providing lockers facilities and perform certain on the

basis of its motive ...eg: IDBI BANK in India used to provide financial

facilities to industrial sector.

It is generally said that the word "BANK" has been originated in Italy. In the

middle of 12th century there was a great financial crisis in Italy due to war.

To meet the war expenses, the government of that period a forced

subscribed loan on citizens of the country at the interest of 5% per annum.

Such loans were known as 'Compare', 'minto' etc. The most common name

was "Monte'. In Germany the word 'Monte was named as 'Bank' or 'Banke'.

According to some writers, the word 'Bank' has been derived from the word

bank.

It is also said that the word 'bank' has been derived from the word 'Banco'

which means a branch. The Jews money lenders in Italy used to transact

their business sitting on branches at different market places. When any of

them used to fail to meet his obligations, his 'Banco' or branch or branch

would be broken by the angry creditors. The word 'Bankrupt' seems to be

9


originated from broken Banco. Since, the banking system has been

originated from money leading business; it is rightly argued that the word

'Bank' has been originated from the word "Banco'.

Today the word bank is used as a comprehensive term for a number of

institutions carrying on certain kinds of financial business. In practice, the

word 'Bank' means which borrows money from one class of people and

again lends money to another class of people for interest or profit.

Scheduled commercial Banks constitute those banks which have been

included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934.

RBI in turn includes only those banks in this schedule which satisfy the

criteria laid down vide section 42 (60 of the Act. Some co-operative banks

are scheduled commercial banks albeit not all co-operative banks are. Being

a part of the second schedule confers some benefits to the bank in terms of

access to accommodation by RBI during the times of liquidity constraints.

At the same time, however, this status also subjects the bank certain

conditions and obligation towards the reserve regulations of RBI.

10


Meaning

A bank is a financial institution that serves as a financial intermediary.

The term "bank" may refer to one of several related types of entities:

A central bank circulates money on behalf of a government and acts

as its monetary authority by implementing monetary policy, which

regulates the money supply.

A commercial bank accepts deposits and pools those funds to

provide credit, either directly by lending, or indirectly

by investing through the capital markets. Within the global financial

markets, these institutions connect market participants with capital

deficits (borrowers) to market participants with capital surpluses

(investors and lenders) by transferring funds from those parties who have

surplus funds to invest (financial assets) to those parties who borrow

funds to invest in real assets.

A savings bank (known as a "building society" in the United

Kingdom) is similar to a savings and loan association (S&L). They can

either be stockholder owned or mutually owned, in which case they are

permitted to only borrow from members of the financial cooperative. The

asset structure of savings banks and savings and loan associations is

similar, with residential mortgage loans providing the principal assets of

the institution's portfolio.

11


Because of the important role depository institutions play in the financial

system, the banking industry is generally regulated with government

restrictions on financial activities by banks varied over time and by location.

Current global bank capital requirements are referred to as Basel II. In some

countries, such asGermany, banks have historically owned major stakes in

industrial companies, while in other countries, such as the United States,

banks have traditionally been prohibited from owning non-financial

companies. In Japan, banks are usually the nexus of a cross-share holding

entity known as the "keiretsu". In Iceland, banks followed international

standards of regulation prior to the recent 0global financial crisis that began

in 2007.

The oldest bank still in existence is Monte dei Paschi di Siena,

headquartered in Siena, Italy, which has been operating continuously since

1472.

A Bank's main source of income is interest paid on loans. A bank pays out at

a lower interest rate on deposits and receives a higher interest rate on loans.

The difference between these rates represents the bank's net income.[2] Banks

also generate non-interest income from service fees for Retail and Business

banking products, transactional fees, or other non-traditional services such as

Trust and Wealth Management consulting, Insurance, Cash Management

services, Mortgage loan closing costs and points.

Functions of Commercial Banks

12

http://en.wikipedia.org/wiki/Bank#cite_note-1


The functions of a commercial banks are divided into two categories:

i) Primary functions, and

ii) Secondary functions including agency functions.

i) Primary functions:

The primary functions of a commercial bank include:

a) Accepting deposits; and

b) Granting loans and advances;

a) Accepting deposits

The most important activity of a commercial bank is to mobilise

deposits from the public. People who have surplus income and

savings find it convenient to deposit the amounts with banks.

Depending upon the nature of deposits, funds deposited with

bank also earn interest. Thus, deposits with the bank grow along

with the interest earned. If the rate of interest is higher, public

are motivated to deposit more funds with the bank. There is also

safety of funds deposited with the bank.

b) Grant of loans and advances

The second important function of a commercial bank is to grant

loans and advances. Such loans and advances are given to

13


members of the public and to the business community at a higher

rate of interest than allowed by banks on various deposit accounts.

The rate of interest charged on loans and advances varies

depending upon the purpose, period and the mode of repayment.

The difference between the rate of interest allowed on deposits

and the rate charged on the Loans is the main source of a bank’s

income.

i) Loans

A loan is granted for a specific time period. Generally,

commercial banks grant short-term loans. But term loans

c) Discounting of Bills

Banks provide short-term finance by discounting bills, that is,

making payment of the amount before the due date of the bills

after deducting a certain rate of discount. The party gets the

funds without waiting for the date of maturity of the bills. In

case any bill is dishonoured on the due date, the bank can recover

the amount from the customer.

ii) Secondary functions

Besides the primary functions of accepting deposits and lending money,

14


banks perform a number of other functions which are called secondary

functions. These are as follows -

a) Issuing letters of credit, travellers cheques, circular notes etc.

b) Undertaking safe custody of valuables, important documents, and

securities by providing safe deposit vaults or lockers;

c) Providing customers with facilities of foreign exchange.

d) Transferring money from one place to another; and from one

branch to another branch of the bank.

e) Standing guarantee on behalf of its customers, for making

payments for purchase of goods, machinery, vehicles etc.

f) Collecting and supplying business information;

g) Issuing demand drafts and pay orders; and,

h) Providing reports on the credit worthiness of customers.

15


DEFINITION OF BANK

The Oxford dictionary defines the Bank as,

“An establishment for the custody of money, which it pays out, on a

customer’s order.”

According to Whitehead,

“A Bank is defined as an institution which collects surplus funds from

the public, safeguards them, and makes them available to the true owner

when required and also lends sums be their true owners to those who are in

need of funds and can provide security.”

According to “The Banking Regulation Act, 1949” definition of Banking

"Banking" means the accepting, for the purpose of lending or investment, of

deposits of money from the public, repayable on demand or otherwise, and

withdrawal by cheque, draft, order or otherwise

16


Banking company means any company which transacts the business of

banking. Any company which is engaged in the manufacture of goods or

carries on any trade and which accepts deposits of money from the public

merely for the purpose of financing its business as such manufacturer or

trader shall not be deemed to transact the business of banking.

Banking policy means any policy which is specified from time to time by

the Reserve Bank in the interest of the banking system or in the interest of

monetary stability or sound economic growth, having due regard to the

interests of the depositors, the volume of deposits and other resources of the

bank and the need for equitable allocation and the efficient use of these

deposits and resources.

Indian banking industry, today is in the midst of an IT revolution. A

combination of regulatory and competitive reasons has led to increasing

importance of total banking automation in the Indian Banking Industry.

Information Technology has basically been used under two different avenues

in Banking. One is Communication and Connectivity and other is Business

Process Reengineering. Information technology enables sophisticated

product development, better market infrastructure, implementation of

reliable techniques for control of risks and helps the financial intermediaries

to reach geographically distant and diversified markets

17


HISTORY OF BANKING IN INDIA

Without a sound and effective banking system in India it cannot have a

healthy economy. The banking system of India should not only be hassle

free but it should be able to meet new challenges posed by the technology

and any other external and internal factors.

For the past three decades India's banking system has several outstanding

achievements to its credit. The most striking is its extensive reach. It is no

longer confined to only metropolitans or cosmopolitans in India. In fact,

Indian banking system has reached even to the remote corners of the

country. This is one of the main reasons of India's growth process.

The government's regular policy for Indian bank since 1969 has paid rich

dividends with the nationalisation of 14 major private banks of India.

Not long ago, an account holder had to wait for hours at the bank counters

for getting a draft or for withdrawing his own money. Today, he has a

choice. Gone are days when the most efficient bank transferred money from

18


one branch to other in two days. Now it is simple as instant messaging or

dial. Money has become the order of the day.

The first bank in India, though conservative, was established in 1786. From

1786 till today, the journey of Indian Banking System can be segregated into

three distinct phases. They are as mentioned below:

Early phase from 1786 to 1969 of Indian Banks

Nationalisation of Indian Banks and up to 1991 prior to Indian banking

sector Reforms.

New phase of Indian Banking System with the advent of Indian Financial

& Banking Sector Reforms after 1991.

Phase I

The General Bank of India was set up in the year 1786. Next came Bank of

Hindustan and Bengal Bank. The East India Company established Bank of

Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as

independent units and called it Presidency Banks. These three banks were

19


amalgamated in 1920 and Imperial Bank of India was established which

started as private shareholders banks, mostly Europeans shareholders.

In 1865 Allahabad Bank was established and first time exclusively by

Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at

Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank

of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up.

Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also experienced

periodic failures between 1913 and 1948. There were approximately 1100

banks, mostly small. To streamline the functioning and activities of

commercial banks, the Government of India came up with The Banking

Companies Act, 1949 which was later changed to Banking Regulation Act

1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of

India was vested with extensive powers for the supervision of banking in

India as the Central Banking Authority. During those days public has lesser

confidence in the banks. As an aftermath deposit mobilisation was slow.

Abreast of it the savings bank facility provided by the Postal department was

comparatively safer. Moreover, funds were largely given to traders.

Phase II

Government took major steps in this Indian Banking Sector Reform after

independence. In 1955, it nationalised Imperial Bank of India with extensive

banking facilities on a large scale specially in rural and semi-urban areas. It

20


formed State Bank of India to act as the principal agent of RBI and to handle

banking transactions of the Union and State Governments all over the

country.

Seven banks forming subsidiary of State Bank of India was nationalised in

1960 on 19th July, 1969, major process of nationalisation was carried out. It

was the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14

major commercial banks in the country was nationalised.

Second phase of nationalisation Indian Banking Sector Reform was carried

out in 1980 with seven more banks. This step brought 80% of the banking

segment in India under Government ownership.

The following are the steps taken by the Government of India to Regulate

Banking Institutions in the Country:

1949 : Enactment of Banking Regulation Act.

1955 : Nationalisation of State Bank of India.

1959 : Nationalisation of SBI subsidiaries.

1961 : Insurance cover extended to deposits.

1969 : Nationalisation of 14 major banks.

1971 : Creation of credit guarantee corporation.

1975 : Creation of regional rural banks.

1980 : Nationalisation of seven banks with deposits over 200 crore.

21


After the nationalisation of banks, the branches of the public sector bank

India rose to approximately 800% in deposits and advances took a huge

jump by 11,000%. Banking in the sunshine of Government ownership gave

the public implicit faith and immense confidence about the sustainability of

these institutions.

Phase III

This phase has introduced many more products and facilities in the banking

sector in its reforms measure. In 1991, under the chairmanship of M

Narasimham, a committee was set up by his name which worked for the

liberalisation of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts

are being put to give a satisfactory service to customers. Phone banking and

net banking is introduced. The entire system became more convenient and

swift. Time is given more importance than money.

The financial system of India has shown a great deal of resilience. It is

sheltered from any crisis triggered by any external macroeconomics shock as

other East Asian Countries suffered. This is all due to a flexible exchange

rate regime, the foreign reserves are high, the capital account is not yet fully

22


convertible, and banks and their customers have limited foreign exchange

exposure.

BUSINESS OF BANKING COMPANIES

In addition to the business of banking, a banking company may engage in

any one or more of the following forms of business, namely: —

a) the borrowing, raising, or taking up of money; the lending or

advancing of money either upon or without security; the drawing,

making, accepting, discounting, buying, selling, collecting and dealing

in bills of exchange, hundies, promissory notes, coupons, drafts, bills

of lading, railway receipts, warrants, debentures, certificates, scrips

and other instruments and securities whether transferable or

negotiable or not; the granting and issuing of letters of credit,

traveller's cheques and circular notes; the buying, selling and dealing

in bullion and specie; the buying and selling of foreign exchange

including foreign bank notes; the acquiring, holding, issuing on

commission, underwriting and dealing in stock, funds, shares,

debentures, debenture stock, bonds, obligations, securities and

23


investments of all kinds; the purchasing and selling of bonds, scrips or

other forms of securities on behalf of constituents or others, the

negotiating of loans and advances; the receiving of all kinds of bonds,

scrips or valuables on deposit or for safe custody or otherwise; the

providing of safe deposit vaults; the collecting and transmitting of

money and securities.

b) acting as agents for any Government or local authority or any other

person or persons; the carrying on of agency business of any

description including the clearing and forwarding of goods, giving of

receipts and discharges and otherwise acting as an attorney on behalf

of customers, but excluding the business of a managing agent or

secretary and treasurer] of a company

c) Contracting for public and private loans and negotiating and issuing

the same;

d) The effecting, insuring, guaranteeing, underwriting, participating in

managing and carrying out of any issue, public or private, of State,

municipal or other loans or of shares, stock, debentures, or debenture

stock of any company, corporation or association and the lending of

money for the purpose of any such issue;

e) Carrying on and transacting every kind of guarantee and indemnity

business;

24


f) Managing, selling and realising any property which may come into

the possession of the company in satisfaction or part satisfaction of

any of its claims;

g) Acquiring and holding and generally dealing with any property or any

right, title or interest in any such property which may form the

security or part of the security for any loans or advances or which may

be connected with any such security;

h) Undertaking and executing trusts;

i) Undertaking the administration of estates as executor, trustee or

otherwise;

j) Establishing and supporting or aiding in the establishment and support

of associations, institutions, funds, trusts and conveniences calculated

to benefit employees or ex-employees of the company or the

dependents or connections of such persons; granting pensions and

allowances and making payments towards insurance; subscribing to or

guaranteeing moneys for charitable or benevolent objects or for any

exhibition or for any public, general or useful object;

k) The acquisition, construction, maintenance and alteration of any

building or works necessary or convenient for the purposes of the

company;

l) Selling, improving, managing, developing, exchanging, leasing,

mortgaging, disposing of or turning into account or otherwise dealing

with all or any part of the property and rights of the company;

25


m) Acquiring and undertaking the whole or any part of the business of

any person or company, when such business is of a nature enumerated

or described in this sub- section;

n) Doing all such other things as are incidental or conducive to the

promotion or advancement of the business of the company;

o) Any other form of business which the Central Government may, by

notification in the Official Gazette, specify as a form of business in

which it is lawful for a banking company to engage.

No company other than a banking company shall use as part of its name or

in connection with its business any of the words "bank", "banker" or

"banking" and no company shall carry on the business of banking in India

unless it uses as part of its name at least one of such words.

No firm, individual or group of individuals shall, for the purpose of carrying

on any business, use as part of its or his name any of the words "bank",

"banking" or "banking company".

26


Reserve Bank of India

The Banking system is an integral sub-system of the financial system. It

represents an important channel of collecting small savings from the

households and lending it to the corporate sector. The Indian banking system

has The Reserve Bank of India (RBI)

as the apex body from all matters relating to the banking system. It is the

“Central Bank” of India and act as the banker to all other banks.

Functions of RBI:

Currency issuing authority

Banker to the government.

Banker to other Bank.

Framing of monetary policy.

Exchange control.

Custodian to foreign exchange and gold reserves.

Development activities.

Research and development in the banking sector.

Banking Structure in India

27


Central Bank

The Reserve Bank of India is the central Bank that is fully owned by the

Government. It is governed by a central board (headed by a Governor)

appointed by the Central Government. It issues guidelines for the

functioning of all banks operating within the country.

Public Sector Banks

a. State Bank of India and its associate banks called the State Bank Group

b. 20 nationalized banks

c. Regional rural banks mainly sponsored by public sector banks

Private Sector Banks

a. Old generation private banks

b. New generation private banks

c. Foreign banks operating in India

d. Scheduled co-operative banks

e. Non-scheduled banks

Co-operative Sector

28


The co-operative sector is very much useful for rural people. The co-

operative banking sector is divided into the following categories.

a. State co-operative Banks

b. Central co-operative banks

c. Primary Agriculture Credit Societies

Definition of Public Sector Bank:

The term public sector banks refers to banks that have their shares listed in

the stock exchanges NSE and BSE and also the government of India holds

majority stake in these banks. They can also be termed as government

owned banks.

Definition of Co-operative Bank::

A co-operative bank is a financial entity which belongs to its members, who

are at the same time the owners and the customers of their bank. Co-

operative banks are often created by persons belonging to the same local or

professional community or sharing a common interest. Co-operative banks

generally provide their members with a wide range of banking and financial

services.

29


Role of Banking

Banks provide funds for business as well as personal needs of individuals.

They play a significant role in the economy of a nation. Let us know about

the role of banking.

It encourages savings habit amongst people and thereby makes funds

available for productive use.

It acts as an intermediary between people having surplus money and

those requiring money for various business activities.

It facilitates business transactions through receipts and payments by

cheques instead of currency.

It provides loans and advances to businessmen for short term and

long-term purposes.

It also facilitates import export transactions.

It helps in national development by providing credit to farmers, small-

scale industries and self-employed people as well as to large business

houses which lead to balanced economic development in the country.

It helps in raising the standard of living of people in general by

providing loans for purchase of consumer durable goods, houses,

automobiles, etc.

30


Types of Banks

There are various types of banks which operate in our country to meet the

financial requirements of different categories of people engaged in

agriculture, business, profession, etc. On the basis of functions, the banking

institutions in India may be divided into the following types:

Development Banks

Specialised Banks

(RBI, in India) (EXIM Bank

SIDBI, NABARD)

Commercial Banks

Co-operative Banks

(i) Public Sector Banks (i) Primary Credit Societies

(ii) Private Sector Banks (ii) Central Co-operative Banks

(iii) Foreign Banks (iii) State Co-operative Banks

Now let us learn about each of these banks in detail.

a) Central Bank

A bank which is entrusted with the functions of guiding and regulating the

banking system of a country is known as its Central bank. Such a bank does

not deal with the general public. It acts essentially as Government’s banker,

maintain deposit accounts of all other banks and advances money to other

banks, when needed. The Central Bank provides guidance to other banks

whenever they face any problem. It is therefore known as the banker’s bank.

The Reserve Bank of India is the central bank of our country. The Central

31


Bank maintains record of Government revenue and expenditure under

various heads. It also advises the Government on monetary and credit

policies and decides on the interest rates for bank deposits and bank loans. In

addition, foreign exchange rates are also determined by the central bank.

Another important function of the Central Bank is the issuance of currency

notes, regulating their circulation in the country by different methods. No

other bank than the Central Bank can issue currency.

b) Commercial Banks

Commercial Banks are banking institutions that accept deposits and grant

short-term loans and advances to their customers. In addition to giving short-

term loans, commercial banks also give medium-term and long-term loan to

business enterprises. Now-a-days some of the commercial banks are also

providing housing loan on a long-term basis to individuals. There are also

many other functions of commercial banks, which are: -

.

Types of Commercial banks:

Commercial banks are of three types:-

Public sector banks,

Private sector banks and

Foreign banks.

32


(i) Public Sector Banks: These are banks where majority stake is

held by the Government of India or Reserve Bank of India.

Examples of public sector banks are: State Bank of India,

Corporation Bank, Bank of Baroda and Dena Bank, etc.

(ii) Private Sectors Banks: In case of private sector banks majority of

share capital of the bank is held by private individuals. These

banks are registered as companies with limited liability. For

example: The Jammu and Kashmir Bank Ltd., Bank of Rajasthan

Ltd., Development Credit Bank Ltd, Lord Krishna Bank Ltd.,

Bharat Overseas Bank Ltd., Global Trust Bank, Vysya Bank, etc.

(iii) Foreign Banks: These banks are registered and have their

headquarters in a foreign country but operate their branches in our

country. Some of the foreign banks operating in our country are

Hong Kong and Shanghai Banking Corporation (HSBC), Citibank,

American Express Bank, Standard & Chartered Bank, Grindlay’s

Bank, etc. The number of foreign banks operating in our country

has increased since the financial sector reforms of 1991.

33


c) Development Banks

Business often requires medium and long-term capital for purchase of

machinery and equipment, for using latest technology, or for expansion and

modernization. Such financial assistance is provided by Development

Banks. They also undertake other development measures like subscribing to

the shares and debentures issued by companies, in case of under subscription

of the issue by the public. Industrial Finance Corporation of India (IFCI) and

State Financial Corporations (SFCs) are examples of development banks in

India.

d) Co-operative Banks

People who come together to jointly serve their common interest often form

a co-operative society under the Co-operative Societies Act. When a co-

operative society engages itself in banking business it is called a Co-

operative Bank. The society has to obtain a licence from the Reserve Bank

of India before starting banking business. Any co-operative bank as a society

is to function under the overall supervision of the Registrar, Co-operative

Societies of the State. As regards banking business, the society must follow

the guidelines set and issued by the Reserve Bank of India.

34


Types of Co-operative Banks

There are three types of co-operative banks operating in our country. They

are primary credit societies, central co-operative banks and state co-

operative banks. These banks are organized at three levels, village or town

level, district level and state level.

(i) Primary Credit Societies: These are formed at the village or town

level with borrower and non-borrower members residing in one

locality. The operations of each society are restricted to a small

area so that the members know each other and are able to watch

over the activities of all members to prevent frauds.

(ii) Central Co-operative Banks: These banks operate at the district

level having some of the primary credit societies belonging to the

same district as their members. These banks provide loans to their

members (i.e., primary credit societies) and function as a link

between the primary credit societies and state co-operative banks.

(iii) State Co-operative Banks: These are the apex (highest level) co-

operative banks in all the states of the country. They mobilise

funds and help in its proper channelisation among various sectors.

The money reaches the individual borrowers from the state co-

operative banks through the central co-operative banks and the

primary credit societies.

35


e) Specialised Banks

There are some banks, which cater to the requirements and provide overall

support for setting up business in specific areas of activity. EXIM Bank,

SIDBI and NABARD are examples of such banks. They engage themselves

in some specific area or activity and thus, are called specialised banks.

.

(i) Export Import Bank of India (EXIM Bank): If you want to set

up a business for exporting products abroad or importing products

from foreign countries for sale in our country, EXIM bank can

provide you the required support and assistance. The bank grants

loans to exporters and importers and also provides information

about the international market. It gives guidance about the

opportunities for export or import, the risks involved in it and the

competition to be faced, etc.

(ii) Small Industries Development Bank of India (SIDBI): If you

want to establish a small-scale business unit or industry, loan on

easy terms can be available through SIDBI. It also finances

modernisation of small-scale industrial units, use of new

technology and market activities. The aim and focus of SIDBI is to

promote, finance and develop small-scale industries.

(iii) National Bank for Agricultural and Rural Development

(NABARD): It is a central or apex institution for financing

agricultural and rural sectors. If a person is engaged in agriculture

or other activities like handloom weaving, fishing, etc. NABARD

36


can provide credit, both short-term and long-term, through regional

rural banks. It provides financial assistance, especially, to co-

operative credit, in the field of agriculture, small-scale industries,

cottage and village industries handicrafts and allied economic

activities in rural areas.

Functions of Commercial Banks

The functions of commercial banks are of two types.

Primary functions and Secondary functions.

(i) Primary functions

The primary functions of a commercial bank include:

a) Accepting deposits; and

b) Granting loans and advances.

a) Accepting deposits

The most important activity of a commercial bank is to mobilise deposits

from the public. People who have surplus income and savings find it

convenient to deposit the amounts with banks. Depending upon the nature of

deposits, funds deposited with bank also earn interest. Thus, deposits with

the bank grow along with the interest earned. If the rate of interest is higher,

public are motivated to deposit more funds with the bank. There is also

safety of funds deposited with the bank.

37


Fixed or Time Deposit Account: Cash is deposited in this

account for a fixed period. The depositor gets receipts for the amount

deposited. It is called Fixed Deposit Receipt. The receipt indicates the

name of the depositor, amount of deposit, rate of interest and the

period of deposit. This receipt is not transferable. If the depositor

stands in need of the amount before the expiry of fixed period, he can

withdraw the same after paying the discount to the bank.

Savings Account: This type of deposit suits to those who

just want to keep their small savings in a bank and might need to

withdraw them occasionally. Banks provide a certain rate of interest

on the minimum balance kept by the depositor during the month.

Current Account: This type of account is kept by the

businessman who are required to withdraw money every new and

then. Banks do not pay any interest on this account. Any sum or any

number of withdrawals can be presented by such an account holder.

38


b) Grant of loans and advances

The second important function of a commercial bank is to grant loans and

advances. Such loans and advances are given to members of the public and

to the business community at a higher rate of interest than allowed by banks

on various deposit accounts. The rate of interest charged on loans and

advances varies according to the purpose and period of loan and also the

mode of repayment.

i) Loans

A loan is granted for a specific time period. Generally commercial

banks provide short-term loans. But term loans, i.e., loans for more

than a year may also be granted. The borrower may be given the entire

amount in lump sum or in instalments. Loans are generally granted

against the security of certain assets. A loan is normally repaid in

instalments. However, it may also be repaid in lump sum.

ii) Advances

An advance is a credit facility provided by the bank to its customers.

It differs from loan in the sense that loans may be granted for longer

period, but advances are normally granted for a short period of time.

Further the purpose of granting advances is to meet the day-to-day

requirements of business. The rate of interest charged on advances

varies from bank to bank. Interest is charged only on the amount

withdrawn and not on the sanctioned amount.

39


Types of Advances

Banks grant short-term financial assistance by way of cash credit, overdraft

and bill discounting.

a) Cash Credit

Cash credit is an arrangement whereby the bank allows the borrower to draw

amount upto a specified limit. The amount is credited to the account of the

customer. The customer can withdraw this amount as and when he requires.

Interest is charged on the amount actually withdrawn. Cash Credit is granted

as per terms and conditions agreed with the customers.

b) Overdraft

Overdraft is also a credit facility granted by bank. A customer who has a

current account with the bank is allowed to withdraw more than the amount

of credit balance in his account. It is a temporary arrangement. Overdraft

facility with a specified limit may be allowed either on the security of assets,

or on personal security, or both.

c) Discounting of Bills

Banks provide short-term finance by discounting bills, that is, making

payment of the amount before the due date of the bills after deducting a

certain rate of discount. The party gets the funds without waiting for the date

40


of maturity of the bills. In case any bill is dishonoured on the due date, the

bank can recover the amount from the customer.

d) Money at Call

It is the money lent for a very short period varying from 1 to 14

days. Such advances are usually made to other banks and financial

institutions only. Money at call ensures liquidity. In the Interbank market it

enables bank to make adjustment according to their liquidity requirements

ii) Secondary functions

In addition to the primary functions of accepting deposits and lending

money, banks perform a number of other functions, which are called

secondary functions. These are as follows: -

a. Issuing letters of credit, travellers cheque, etc.

b. Undertaking safe custody of valuables, important document and

securities by providing safe deposit vaults or lockers.

c. Providing customers with facilities of foreign exchange dealings.

d. Transferring money from one account to another; and from one

branch to another branch of the bank through cheque, pay order,

demand draft.

e. Standing guarantee on behalf of its customers, for making payment

for purchase of goods, machinery, vehicles etc.

f. Collecting and supplying business information.

41


g. Providing reports on the credit worthiness of customers.

h. Providing consumer finance for individuals by way of loans on easy

terms for purchase of consumer durables like televisions, refrigerators,

etc.

i. Educational loans to students at reasonable rate of interest for higher

studies, especially for professional courses.

j. Banks collect and pay cheques, bills of exchange, promissory notes,

hundies, rent, interest etc. On behalf of their customers and also make

payments of income tax, fees, insurance premium etc. on behalf of the

customers Customers can leave standing instructions with the banker

for various periodic payments ensuring the regular payments and

avoiding the trouble of performing it themselves.

k. Undertake the purchase and sale of various securities like shares,

stocks, bonds units and debentures etc. On behalf of the customers,

banks do not give any advice regarding the suitability or otherwise of

a security but simply perform the functions of a broker.

42


Indian banks - Public Sector Bank

Bank of India

Dena Bank

IDBI Bank

Indian Bank

Oriental Bank of Commerce

Punjab National Bank

United Bank of India

UCO Bank

Allahabad Bank

Andhra Bank

Bank of Baroda

Bank of Maharashtra

Canara Bank

Central Bank of India

Corporation Bank

Indian Overseas Bank

Syndicate Bank

Union Bank of India

Vijaya Bank

Punjab & Sind Bank

43

http://en.wikipedia.org/wiki/Punjab_%26_Sind_Bank

http://en.wikipedia.org/wiki/Vijaya_Bank

http://en.wikipedia.org/wiki/Union_Bank_of_India

http://en.wikipedia.org/wiki/Syndicate_Bank

http://en.wikipedia.org/wiki/Indian_Overseas_Bank

http://en.wikipedia.org/wiki/Corporation_Bank

http://en.wikipedia.org/wiki/Central_Bank_of_India

http://en.wikipedia.org/wiki/Canara_Bank

http://en.wikipedia.org/wiki/Bank_of_Maharashtra

http://en.wikipedia.org/wiki/Bank_of_Baroda

http://en.wikipedia.org/wiki/Andhra_Bank

http://en.wikipedia.org/wiki/Allahabad_Bank

http://en.wikipedia.org/wiki/UCO_Bank

http://en.wikipedia.org/wiki/United_Bank_of_India

http://en.wikipedia.org/wiki/Punjab_National_Bank

http://en.wikipedia.org/wiki/Oriental_Bank_of_Commerce

http://en.wikipedia.org/wiki/Indian_Bank

http://en.wikipedia.org/wiki/IDBI_Bank

http://en.wikipedia.org/wiki/Dena_Bank

http://en.wikipedia.org/wiki/Bank_of_India


Table No. 1

Scheduled Urban Co-operative Banks as on 31.03.2009 as per RBI

BankMain

Location

Ahmedabad Mercantile Co-Op Bank Ltd. Ahmedabad

Kalupur Commercial Coop.Bank Ltd. Kalupur

Madhavpura Mercantile Co-Op Bank Ltd. Madhavpur

Mehsana Urban Co-Op Bank Ltd. Mehsana

Nutan Nagarik Sahakari Bank Ltd. Ahmedabad

Rajkot . Rajkot

Almora urban co-operative bank ltd. almora

Sardar Bhiladwala Pardi Peoples Coop Bank Ltd. Bulsar

Surat Peoples Coop Bank Ltd. Surat

Amanath Co-operative Bank Ltd. Bangalore

Andhra Pradesh Mahesh Co-Op Urban Bank Ltd.Andhra

Pradesh

Charminar Coop.Urban Bank Ltd. Hyderabad

Vasavi Coop Urban Bank LImited. Hyderabad

44

http://en.wikipedia.org/wiki/Hyderabad,_India

http://en.wikipedia.org/wiki/Hyderabad,_India

http://en.wikipedia.org/wiki/Andhra_Pradesh

http://en.wikipedia.org/wiki/Andhra_Pradesh

http://en.wikipedia.org/wiki/Bangalore

http://en.wikipedia.org/wiki/Surat

http://en.wikipedia.org/wiki/Bulsar

http://en.wikipedia.org/wiki/Almora

http://en.wikipedia.org/wiki/Rajkot

http://en.wikipedia.org/wiki/Ahmedabad

http://en.wikipedia.org/wiki/Mehsana

http://en.wikipedia.org/wiki/Madhavpur

http://en.wikipedia.org/wiki/Kalupur

http://en.wikipedia.org/wiki/Ahmedabad


Indian Mercantile Co-op Bank Ltd. Lucknow

Kallappanna Awade Ichalkaranji Janata Sahakari

Bank Ltd.Ichalkaranji

Abhyudaya Co-operative Bank Ltd. Mumbai

Bangalore city cooperative bank. Bengaluru

Bassein Catholic Co-operative Bank Limited. Vasai

Bharat Co-operative Bank (Mumbai) Ltd. Mumbai

Bharati Sahakari Bank Limited. Pune

Bombay Mercantile Co-operative Bank Limited. Mumbai

Citizen Credit Co-operative Bank Ltd. Dadar

Cosmos Co-operative Urban Bank Ltd. Pune

Dombivli Nagari Sahakari Bank Ltd. Dombivli

Goa Urban Co-operative Bank Limited. Goa

Greater Bombay Co-operative Bank Limited. Mumbai

Jalgaon Janata Sahakari Bank Ltd. Jalgaon

Janakalyan Sahakari Bank Ltd. Mumbai

Janalaxmi Co-operative Bank Ltd. Mumbai

45

http://en.wikipedia.org/wiki/Mumbai


http://en.wikipedia.org/wiki/Jalgaon


http://en.wikipedia.org/wiki/Goa

http://en.wikipedia.org/wiki/Dombivli

http://en.wikipedia.org/wiki/Pune

http://en.wikipedia.org/wiki/Dadar




http://en.wikipedia.org/wiki/Vasai

http://en.wikipedia.org/wiki/Bengaluru


http://en.wikipedia.org/wiki/Ichalkaranji

http://en.wikipedia.org/wiki/Lucknow


Janata Sahakari Bank Ltd. Pune

The Karnataka State Co-Operative Apex Bank

LtdBengaluru

Kalyan Janata Sahakari Bank Ltd. Kalyan

Karad Urban Co-operative Bank Ltd. Karad

Mahanagar Co-operative Bank Ltd. Mumbai

Mapusa Urban Co-operative Bank of Goa Ltd. Mapusa

Nagar Urban Co-operative Bank Ltd. Ahmednagar

Nasik Merchant's Co-operative Bank Ltd. Nasik

New India Co-operative Bank Ltd. Mumbai

NKGSB Co-operative Bank Ltd. Mumbai

Parsik Janata Sahakari Bank Ltd. Thane

Pravara Sahakari Bank Ltd. Ahmednagar

Punjab & Maharashtra Co-operative Bank Ltd. Mumbai

Rupee Co-operative Bank Ltd. Pune

Sangli Urban Co-operative Bank Ltd. Sangli

Saraswat Co-operative Bank Ltd. Mumbai

46


http://en.wikipedia.org/wiki/Sangli



http://en.wikipedia.org/wiki/Ahmednagar

http://en.wikipedia.org/wiki/Thane



http://en.wikipedia.org/wiki/Nasik

http://en.wikipedia.org/wiki/Ahmednagar

http://en.wikipedia.org/wiki/Mapusa


http://en.wikipedia.org/wiki/Karad

http://en.wikipedia.org/wiki/Kalyan

http://en.wikipedia.org/wiki/Bengaluru



Shamrao Vithal Co-operative Bank Ltd. Mumbai

Solapur Janata Sahakari Bank Ltd. Solapur

Thane Bharat Sahakari Bank Ltd. Thane

Thane Janata Sahakari Bank Ltd. Thane

The Kapol Co-operative Bank Ltd. Mumbai

Zoroastrian Co-operative Bank Ltd. Mumbai

Nagpur Nagrik Sahakari Bank Ltd. Nagpur

Shikshak Sahakari Bank Ltd. Nagpur

The Akola Janata Com.Co-operative Bank Ltd. Akola

The Akola Urban Co-operative Bank Ltd. Akola

The Khamgaon Urban Co-operative Bank Ltd. Khamgaon

Cuttack Gramya Bank. Cuttack

Janaseva Sahakari Bank,Ltd. Pune

47


http://en.wikipedia.org/wiki/Cuttack

http://en.wikipedia.org/wiki/Khamgaon

http://en.wikipedia.org/wiki/Akola_city

http://en.wikipedia.org/wiki/Akola_city

http://en.wikipedia.org/wiki/Nagpur

http://en.wikipedia.org/wiki/Nagpur





http://en.wikipedia.org/wiki/Solapur



Review of Literature

Considerable work of research takes place on efficiency and profitability of

Indian Banks as well as other related fields like banking sector reforms. A

brief review of major studies is given hereunder:

Joshi (1986) in his study of all scheduled banks operating in India analyses

the profitability and profit planning relating to the period 1970-1982. The

study discusses the trends in profit and profitability of commercial banks

since nationalisation. The factors leading to the deterioration of profitability

is highlighted.

Mishra (1993) in his study has described various factors, which have a

bearing on profitability. The study makes a detailed analysis of income and

expenditure to underline the factors, which affect each aspect of income and

expenditure, thus profitability.

Das, Abhiman (1999) attempts to estimate and compare various efficiency

measures of public sector banks in India under the framework of data

envelopment analysis model and examines the issue on how far a bank can

increase its output.

48


STATEMENT OF THE PROBLEM

COMPARARTIVE STUDY OF PUBLIC BANKS AND


STATE BANK OF INDIA-THANE JANATA SAHAKARI BANK–

MAHARASHTRA)

49


Objectives of the Study

The objective of the study is to give the detailed information on the

functions of both banks along with its classification

o To study the role of banks as a major component of the service sector.

o To study the profile of Public Banks & Cooperative Banks in detailed

description of its features, products.

o Comprehensive data analysis of their financial statement.

o To assess the efficiency and profitability of the banks.

o To analyse the role of information technology in their banking system.

o To find the bank sector that is largely availed by the customer.

o To study what do people expect in the new era of banking.

50


Research Methodology

Research is an art of scientific investigation. In other word research is a

scientific and systematic search for pertinent information on a specific topic.

The logic behind taking research methodology into consideration is that one

can have knowledge about the method and procedure adopted for

achievement of objectives of the project.

RESEARCH DESIGN

Research was initiated by examining the secondary data to gain insight into

the problem. By analyzing the secondary data, the study aim is to explore the

present banking system and primary data will help to validate the analysis of

secondary data besides on unrevealing the areas which calls for

improvement.

DEVELOPING THE RESEARCH PLAN

The data for this research project has been collected through self

Administration. Due to time limitation and other constraints direct personal

interview method is used.

SAMPLING FRAME

51


A good number of samples are selected from the population. In selecting

samples accepted statistical sampling method is adopted.

SAMPLING PLAN

Since it is not possible to study whole universe, it becomes necessary to take

sample from

the universe to know about its characteristics.

SAMPLE TECHNIQUE

Random Sampling technique is used.

SAMPLE SIZE

Since it was not possible to cover the whole universe in the available time

period, it was necessary to take a sample size of 100 respondents.

COLLECTION OF DATA

Secondary Data: It was collected from internal sources. The secondary data

was collected on the basis of organizational file, official records, news

papers, magazines, management books, preserved information in the

company’s database and website of the company.

52


2: Primary data: Primary data was collected from selected and representative

bank branches and through pre-coded questionnaire and schedule,

discussions with bank officials and customers in general.

DATA PROCESSING

Numerical techniques, like ratios, percentage, various statistical and

mathematical models are also considered for the purpose of meaningful

comparison and analysis of performance of the banks to derive a concrete

conclusion.

53


Scope of the Study

The work on Comparative Study on Public & Co-operative Banks is

taken to give an in-depth insight into the workings and functioning of both

different banking sectors. One can have a comparative study of the

profitability of Public Sector & Co-operative Banks , Deposits and

Advances with the banks, ratio analysis comparison . The Banks which are

compared are ‘State Bank of India’ and ‘The Thane Janata Sahakari Bank

Ltd’.

Latest changes in the field of Products and Services available to the

customers.

54


Limitations of the Study

Due to constraints of time and resources, the study is likely to suffer from

certain limitations. Some of these are mentioned here under so that the

findings of the study may be understood in a proper perspective.

The limitations of the study are some of the respondents of the

survey were unwilling to share information. The research was

carried out in a short period of time. Therefore the sample size

and other parameters were selected accordingly so as to finish the work

within the given time frame. The information given by the

respondents might be biased because some of them might not be

interested to give correct information. The officials of the bank

supported me a lot, but did not have sufficient time to make the

points more clear.

55


Chapter.No.2

COMPANY PROFILE & PRODUCT PROFILE

o History of State Bank of India & The Thane Janata Sahakari Bank Ltd

o Branches & Subsidiaries

o Products & Services

o Rate of interest on Deposits

o Rate of interest on Loans

o Annual Reports

History of State Bank of India

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.

56


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 modernise 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.

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 banks 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

57


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.

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.

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 branches were to be opened effectively checked the growth of

new branches after 1876.

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

58


banks had emerged. The new bank took on the triple role of a commercial

bank, a banker's bank and a banker to the government.

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.

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).

59


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

subserving the growing and diversified financial needs of planned economic

development. 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.

State Bank of India has an extensive administrative structure to oversee the

large network of branches in India and abroad. The Corporate Centre is in

Mumbai and 14 Local Head Offices and 57 Zonal Offices are located at

important cities spread throughout the country. The Corporate Centre has

several other establishments in and outside Mumbai, designated to cater to

various functions. Our Colleges/Institutes/Training Centres are the seats of

learning and research and development to spread the wings of knowledge

not only to our employees but also other banks/establishments in India and

abroad.

The corporate Account Group is a strategic Business Unit of the Bank set up

exclusively to fill the specialised banking role to top corporate in the

country.

60


State Bank of India has 131 foreign offices in 32 countries across the globe.

State Bank of India has the following Associate Banks (ABs) with

controlling interest ranging from 75% to 100%.

1. State Bank of Bikaner and Jaipur (SBBJ)

2. State Bank of Hyderabad (SBH)

3. State Bank of Indore (SBIr)

4. State Bank of Mysore (SBM)

5. State Bank of Patiala (SBP)

6. State Bank of Travancore (SBT)

7. State Bank of Saurashtra (merged with SBI in 2008)

8. State Bank of Indore (merged with SBI in 2010)

61

http://en.wikipedia.org/wiki/State_Bank_of_Indore

http://en.wikipedia.org/wiki/State_Bank_of_Saurashtra


Foreign Subsidiaries of SBI are: -

SBI International (Mauritius) Ltd., Offshore Bank

(A subsidiary of State Bank of India)

State bank of India International (Mauritius) Ltd is one of the first offshore

banks to be established in Mauritius in 1990, with a paid up capital of USD

10 Million. The Bank has had a consistent record of having earned profits

since its very first year of operations.

SBIIML, with the expertise of its management and personnel, is customer

focused, and offers to all its clients, all over the world, high quality, cost

effective professional services and innovative products. The Bank lays

emphasis on technology, which is an integral part of its operations having a

significant impact on services rendered. It has, presently, clients spread over

40 countries.

The principal activities include:

Acceptance of deposits in foreign currencies mainly US Dollar, Pound

Sterling, Euro and also other currencies. Attractive rates of interest are

offered.

International remittances in all major currencies through SWIFT,

quickly and effectively.

Loans/syndications in major currencies, like Euro/Dollar/Japanese

Yen.

62


Trade Services, including issuance of/negotiations under documentary

letters of credits and issuance of bank guarantees.

Hedging of exchange and interest rate risks on behalf of customers.

Sales and Purchases of foreign currencies in the Spot and Forward

Market.

Rendering custodial services for offshore funds registered in

Mauritius.

Products tailored to suit the requirements of customers.

The Bank adopts the best Corporate Governance practices, and

comprehensive risk management policies and systems ensure effective

control of risks. A strong capital base, and near zero non-performing assets

further add to the strength and stability of the Bank.

State Bank of India (California)

State Bank of India (California), a wholly owned subsidiary in California is

a California State Chartered Bank and a member of the Federal Deposit

Insurance Corporation. With eight full service branches, the Bank caters to

the Banking needs of the community, ethnic and non-ethnic alike, through

various deposit and loan schemes. SBIC takes prides in providing state-of-

the-art remittance facility to its customers. The Bank also provides Internet

Banking, Tele-Banking, ATM service and Credit Cards.

63


State Bank of India (Canada)

State Bank of India (Canada) - a wholly owned subsidiary of State Bank of

India - has been operating in Canada at seven locations Toronto, Vancouver,

Mississauga, Surrey, Scarborough, Abbotsford and Brampton extending

various facilities to the Indians settled in Canada such as remittance of funds

through a network of over 11500 offices of State Bank of India, the largest

commercial bank in India and through the branches of its Associate Banks.

SBI(C) has also been instrumental in fostering trade ties between India and

Canada by extending financial, advisory and logistic support to Canadian

and Indian corporates

INMB Bank Ltd, Lagos

A subsidiary of SBI, INMB Bank Ltd, (formerly Indo-Nigerian Merchant

Bank Ltd) was incorporated on 26/11/1981 under the Banking Act, 1969.

The principle activity of the Bank is providing Banking Services, mainly to

corporate clients. Such services include the granting of loans and advances,

equipment leasing, corporate finance activities, financial advisory services.

In August 2002, the Bank was licensed by Central Bank of Nigeria to begin

retail anking.

The Bank is operating five branches in Nigeria namely Lagos, Abuja, Kano,

Port-Harcourt and Ikeja (recently opened).

64


Non Banking Subsidiaries of SBI

The Bank has the following Non-Banking Subsidiaries in India:

1. SBI Capital Markets Ltd

2. SBI Funds Management Pvt Ltd

3. SBI Factors & Commercial Services Pvt Ltd

4. SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)

5. SBI DFHI Ltd

6. SBI General Insurance Company Limited

1. SBI Capital Markets Ltd (SBICAP)

65


SBICAP undertakes merchant banking activities, advisory services, project

appraisal, credit syndication, securities broking,arrangement of Structured

Finance, Capital Market, Services like Equity Issuances, Mergers &

Acquisitions and arrangement of Private Equity, etc. SBICAP is a leader in

India in Project Finance with over 40% market share.

The company has posted PAT of Rs. 374.72 crores as on 31.03.2011

as against Rs. 137.12 crores as on 31.03.2010 thus recording YoY growth of

173%. Also declared an interim dividend of 400%.

SBICAP’s current focus is on infrastructure project advisory and syndication

mandates, particularly in sectors, such as, urban infrastructure and power,

which are reckoned as the growth drivers. The other focus areas are public

issues of equity, book-building issues, debt placements, broking and sales

and distribution.

1.2 SBICAP Securities Limited (SSL) SSL, a wholly owned subsidiary of SBI Capital Markets Ltd., besides

offering equity broking services to retail and institutional clients

both in cash as well as in Futures and Options segments, is also

engaged in Sales & Distribution of other financial products like Mutual

Funds, etc. SSL has 100 branches and offers Demat, e-broking, e-IPO and

e-MF services to both retail and institutional clients. SSL currently

has more than 1.89 lac customers in their books. The Company has posted

a profit of Rs.4.59 crores as on 31.03.2011 during the current year.

66


1.3 SBICAPS Ventures Limited (SVL)

SVL is a wholly owned subsidiary of SBI Capital Markets Ltd. SVL earned

a net profit of Rs. 0.59 crore during 2010-11.

SVL sold its stake in SS Ventures Services Ltd., a venture capital fund

set up jointly by SVL and SBI Holdings Inc (Softbank), Japan and its

stake in India Japan Fund to SBI Holdings Inc and Knowledge Investments

(Mauritius) Ltd at a total consideration of Rs. 3.47 crores and Rs.

2.60ac respectively.

1.4SBICAP (UK) Ltd. ( SUL)

SUL is a wholly owned subsidiary of SBI Capital Markets Ltd. During the

year SUL has booked a revenue of Rs. 2.16 crores and has posted a net

profit of Rs. 0.20 crore despite the global recessionary scenario.

SUL is positioning itself as a Relationship outfit for SBI Capital

Markets in UK and Europe. Relationships are being built with FIIs,

Financial Institutions, Law Firms, Accounting Firms, etc to market the

business products of SBICAP.

1.5 SBICAP TRUSTEE Co. Ltd. (STCL)

67


SBICAP TRUSTEE Co Ltd (STCL), a wholly owned subsidiary of SBI

Capital

Markets Ltd., which has commenced security trustee business with effect

from 1st August 2008 has earned a gross income of 8.31 Rs.crores and a

Net Profit of Rs. 4.43 crores during 2010-11 as against Gross Income of

Rs. 3.78 crores and Net Profit of Rs. 1.94 crores during 2009-10

2. SBI Funds Management Pvt Ltd (SBI FUNDS)

SBI FUNDS is the Asset Management Company (AMC) set up for

managing the affairs of SBI Mutual Fund.

3. SBI Factors and Commercial Services Pvt Ltd (SBI FACTORS)

SBI Factors, a subsidiary of State bank of India (SBI) is one of the

leading factoring companies in India with an asset base of Rs.700.10 crores

as on 30.09.2005. It was established in February 1991 with the primary

objective to provide domestic factoring services to Small and Medium

Enterprises (SMEs). Factoring is a Collection and finance service designed

to improve the cash flow position of SMEs by turning their credit invoices

into ready cash. The major strength of the company is that it has put in place

68


a technology driven platform for offering integrated receivables

management. SBI and its Associates Banks hold 70% stake in SBI Factors.

4. SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)

SBI Cards, the only stand-alone credit card issuing company in

India, is a joint venture between State Bank of India and GE Capital

Corporation, wherein SBI holds 60% stake.

SBI Card has emerged as the most trusted brand by being the

undisputed Gold Award winner in Readers Digest Trusted Brands Survey

2010 for the third year in a row.

The Cards in Force (CIF) of the Company stands at 23 lac and the

receivables are at Rs. 1,795 crores at the end of March 2011.

The Company has posted a net profit of Rs. 7.10 crores as on March

2011 as against a loss of Rs. 152.4 crores as on 31.03.2010.

1. Launch of SBI Delhi, SBI Hyderabad and SBI Bangalore city affinity

cards.

2. Launch of “Flexipay”, an instalment loan programme.

3. Market leadership in VISA petrol spends in India.

4. Launch of e-bill payment of SBI Credit Card for SBI account holders.

5. Launch of Elite card which is offered by invitation only.

6. Ten per cent maiden dividend declared.

69


5. SBI DFHI Ltd (SBI DFHI)

SBI DFHI, a Primary Dealer (PD), undertakes trading in Government and

Non-Government securities, in the Debt Markets.

SBI DFHI Ltd came into existence in April 2004 with the amalgamation of

Discount and Finance House of India (DFHI), a subsidiary of RBI & SBI

Gilts Ltd, a subsidiary of SBI. It is a major participant in the wholesale Debt

Market both in the Primary and Secondary Market segment.

For the period ended 31st March 2011, the Companys PAT was Rs.

56.94 crores as against Rs. 89.23 crores during March 2010. The lower

profit is mainly attributed to the impact of hikes in Repo rates by RBI and

yield on investments remaining stagnant.

The market share of SBIDFHI has increased from 2.71% as on

31.03.2010 to 3.41% as on 31.03.2011.

The secondary market turnover during the year was Rs. 97,885

crores as against Rs. 78,911 crores during the corresponding period in 2010

(YoY growth of 24%).

6.SBI General Insurance Company Limited

SBI General Insurance Company Limited is a joint venture between the

State Bank of India and Insurance Australia Group (IAG). SBI owns 74% of

the total capital and IAG the remaining 26%.

70


SBI General commenced its business operation in India late March 2010 in a

limited way and is working towards a nationwide launch with a larger

product portfolio.

Joint Ventures of SBI

The Bank has the following Joint Ventures in India:

1. SBI Life Insurance Company Ltd (SBI LIFE)


1. SBI Life Insurance Company Ltd (SBI LIFE)

SBI Life Insurance, India’s largest private life insurance, is a joint venture

between State Bank of India and BNP Paribas Assurance SBI owns 74% of

the total capital and BNP Paribas Assurance the remaining 26%. SBI Life

Insurance has an authorized capital of Rs. 2,000 crore and a paid up capital

of Rs 1,000 crores.

SBI Life has a unique multi-distribution model comprising

Bancassurance, Retail Agency & Institutional Alliances and Group

Corporate Channels for distribution of insurance products.

-Gross Premium of the Company Crossed Rs. 12,000 crores with YoY

growth of 28%.

- SBI Life has a market share of 19.22% of the total market share of

private insurers which stood at 31.30% as on 31.03.2011. Overall market

71

http://www.sbigeneral.in/

http://www.sbilife.co.in/


share (including Life Insurance Corporation of India) of SBI Life stood

at 6.02% as at 31st March 2011.

- Recorded a PAT of Rs. 366.30 crores as on 31.03.2011 as against Rs.

276.46 crores as on 31.03.2010.

- The ‘Assets under Management of SBI Life recorded a growth of 40%

YoY to reach Rs. 40,162 crores as on 31st March 2011.

- SBI Life expanded its branch network by adding 135 branches during

the year bringing the total number of branches to 629.

- ICRA has reaffirmed iAAA rating to the company indicating highest

claim paying ability.

- CRISIL has reaffirmed its highest financial rating AAA/ Stable.


SBI General Insurance Company Limited is a joint venture between the

State Bank of India and Insurance Australia Group (IAG). SBI owns 74% of

the total capital and IAG the remaining 26%.

7. SBI Funds Management (P) Ltd. (SBIFMPL) - SBIFMPL, the Mutual Fund arm of SBI, is the 6th largest Fund House in

terms of Assets Under Management and a leading player in the market

with 6 million investors.

72


- The schemes of the Fund House have performed consistently over the

years and have emerged as the preferred investment for investors.

- The company has posted a PAT of Rs. 78.85 crores as on 31.03.2011

registering a YoY growth of 4%.

- The average Assets Under Management (AUM) of the company stood at

Rs. 41,672 crores as against Rs. 37,417 crores as on March 2010

achieving a YoY growth of 11% as against the growth of 6% for the

Mutual Fund Industry.

8. SBI Global Factors Ltd. (SBIGFL)

SBIGFL is one of the leading factoring companies in India which

has the highest market share (over 90%) in export & import factoring.

During the year ended 31st March 2011, the turnover of the

company decreased to Rs. 7,605 crores from Rs. 12,978 crores as on 31st

March 2010 due to the sluggish growth in industrial production during the

year impacting the top line growth.

The company incurred a loss of Rs. 125.62 crores during the year

ended 31.03.2011 as against a profit of Rs. 6.58 crores earned on

73


31.03.2010 mainly on account of slowdown in economy and due to higher

Provisioning for NPAs and Write-offs.

9. SBI Pension Funds Pvt. Ltd. (SBIPF)

SBIPF is one of the three Fund Managers appointed by Pension

Fund Regulatory & Development Authority (PFRDA) for management of

Pension Funds under the New Pension System for Central Government

(except Armed Forces) and State Government Employees. SBIPF, a wholly

owned subsidiary of the State Bank Group, commenced its operations from

April 2008.

The total Assets Under Management of the company as on 31st

March 2011 were Rs. 3,764.11 crores (YoY growth of 65%). As at 31st

March 2011, SBIPF was managing 44% of the corpus under the Central

Govt Scheme, 39 % under State Govt scheme and 64% under the informal

sector.The Company recorded a net profit of Rs. 0.32 lac.

Important Developments during the year in Associates & Subsidiaries:

- State Bank of Indore, one of the Associate Banks, was acquired on

26th August 2010 after the final approval from RBI and GoI.

- State Bank of Mysore raised Rs. 583.20 crores equity through a Rights

Issue during the year.

74


- State Bank of Bikaner & Jaipurs Rights Issue for raising Rs. 780

crores was open from 28th March to 11th April 2011.

Investor Relations of SBI

State Bank of India, the country’s largest commercial Bank in terms of

profits, assets, deposits, branches and employees, welcomes to its ‘Investors

Relations’ Section. SBI, with its heritage dating back to the year 1806,

strives to continuously provide latest and upto date information on its

financial performance.

State Bank of India offers a wide range of services in the PERSONAL

BANKING

Segment which are:-

Deposit Schemes

Personal Finance

Services

DEPOSIT SCHEMES

Whatever may be the needs - an investment of surplus funds or to create a

fund for children’s education and marriage there is a product from SBI that

suits ones requirement, and it is delivered at a branch close by.

75


One has to Open an account with any of SBI branches, all of them are fully

computerised, with vast network. Place funds in Multi Option Deposit

Scheme, a term deposit which is not fixed at all and comes with a unique

break-up facility which provides full liquidity as well as benefits of higher

rates of returns, through your savings bank account. Products are designed

with flexibility to suit ones personal requirements. SBI provide 24 hour

banking facility through Internet Banking/ widest network of ATMs.

The Various Deposit Schemes are also.

Current Account

Savings Account

Savings Plus Account

Premium Savings Account

Term Deposits

Recurring Deposit Account

Special Term Deposits

Multi Option Deposit Scheme

Demat Account

SBI Tax Savings Schemes

76


PERSONAL FINANCE

State Bank of India has a variety of schemes under Personal Finance to

satisfy varying needs of the banking public. The Bank offers the following

schemes with attractive rates of interest:

Housing Loan

Property Loan

Car Loan

Educational Loan

Personal Loan

Loan to Pensioners

Credit Khazana

Loan Against Shares/Debentures

Loan For ESOPS

Festival Loans

Tribal-Plus Scheme

EMI Calculator

77


Many of the branches offer loans under Personal Finance. This section also

offers an EMI calculator to facilitate computation of monthly repayment.

SERVICES

State Bank of India offers a wide range of services in the Personal Banking

Segment like :

Mobile Banking

Demat Services

ATM Services

Gift Cards

SBI Yuva Cards

Gift Cheques

Internet Banking

Foreign Inward Remittance

Safe Deposit Locker

Public Provident Fund(PPF)

e-ZPay Card

SBI Vishwa Yatra Foreign Travel Card

Magnetic Ink Character Recognition (MICR)

New Pension System

Multi-city Cheques

e-Invest

78


Core Banking

Payment Systems Group

Enterprise Data Warehouse Project (EDWP)

State Bank of India offers a wide range of services in the CORPORATE

BANKING

Segment like:-

Access to Multiple Users

Account Statement

Funds Transfer

Third Party Transfer

Demat View

Demand Draft

Utility Bill Payment

File Upload Facility

Tax Payment

SMS/Email Alerts

E - collection Facility

79

https://www.onlinesbi.com/corporate/corp_billpayment.html

https://www.onlinesbi.com/corporate/corp_demanddraft.html

https://www.onlinesbi.com/corporate/corp_demataccstatement.html

https://www.onlinesbi.com/corporate/corp_fundTransfer.html

https://www.onlinesbi.com/corporate/corp_accountstatement.html


Direct Debit Facility

Online Auditor

User Hierarchy

MIS Reports

Host to Host Integration

PKI Based Security

Information Security

Business Continuity Management System (BCMS) has been

implemented at Global IT centre, Belapur.

Contact Centre:

Contact Centre operates on 24x7 basis from two locations

Bengaluru and Vadodara. Contact Centre is currently providing the

following services:

Complaint Management System

Pension Management System

Lead Management System

Account Enquiry Services

Payment Tracking System

80


Card Tracking Services

Hotlisting of Cards

ATM PIN Regeneration

Providing MMID (Mobile Money Identifier) information under

IMPS (Interbank Mobile Payment Services)

Balance and Statement on mobile.

In respect of Prepaid Cards, the facility of placing request

and funding for procurement of Gift Card has been enabled through Internet

Banking portal (www.onlinesbi.com).

RRB Computerisation:

Out of 18 RRBs sponsored by the Bank, 10 RRBs have been computerised

on CBS platform using BaNCS application software through the ASP

model.

Support & Control Operations

Information Technology

Risk Management & Internal Controls

Customer Service & Corporate Social Responsibility

Corporate Communication & Change

Right to Information Act

Human Resources

81


Business Process Re-engineering

Official Language

KYC/AML/CFT Measures

Fraud Prevention & Monitoring

Compensation Policy for deficiency in Service

Banks Outsourcing Policy

Super Circle of Excellence

Green Banking Initiatives

SBI provides various Training Institutes in various parts of India.

List of the Training Institutes and their address are as below:

State Bank Staff College , Hyderabad

State Bank Staff College ,

6-3-1188,

Begumpet Road,

HYDERABAD 500 016.

Phone No.:+91 -40 -2341 2092, 2341 2519

Fax No.: +91 -40 -2340 3075, 2341 2640

82


State Bank Academy, Gurgaon

State Bank Academy

Plot No 77 Sector 18

Gurgaon PIN 122,001

Phone no 0124-4012731 to 4012740

State Bank Institute of Information and Communication Management

Bank Sanchar Bhavan,

8-2-695, Road No.12,

Banjara Hills,

HYDERABAD 500034.

ANDHRA PRADESH.

Phone No.(040) 23388235 (Joint Director Trg),

(040) 23388233 (PS to Director),

(040) 23388252 (AGM - Administration)

Fax No. (040) 23388232(Director)

(040) 23388251(Admin)

State Bank Institute of Rural Development

State Bank Institute of Rural Development,

P.B. No.2, K. Gachi Bawli,

Old Bombay Road,

Lingampally Post,

HYDERABAD 500133.

83


Fax No.3010243

84


HISTORY OF THE THANE JANATA SAHAKARI BANK LTD

With the modest beginning in 1972 in the co-operative field, the

dynamism infused by the Board of Directors, unflinching loyalties of

clientele and devotion of staff has propelled the sound foundation of The

Thane Janata Sahakari Bank Ltd (TJSB) and has emerged as one of the

leading multi state scheduled co-operative Bank in the country.

TJSB presently is catering to the needs of society through a close network

of 50 Branches and 2 Extension Counters spread all over the city of Thane,

Mumbai, Navi Mumbai, Nasik, Pune & Satara. All these Branches have

made remarkable progress on all fronts in all these years.

TJSB believes that "customer delight" is the ultimate goal and has a strong

belief that Customers & all Stakeholders wholehearted support, absolute

faith and their patronage has largely been responsible for its enviable

growth. TJSB is committed to provide banking with speed, comfort and

convenience.

TJSB feels proud to acknowledge the growth of large number of successful

industrialists, traders and professionals who have grown leaps & bound due

to timely assistance and support of the Bank.

85


TJSB has set before a Visionary Growth Plan focusing all business

strategies solely on creation of Stakeholders value.

The Thane Janata Sahakari Bank Ltd provides various services as:

Personal Banking Services

Commercial Loans

Retail Loans

PERSONAL BANKING SERVICES

Savings Deposit Account

Savings Account at The Thane Janata Sahakari Bank comes

with banquette of facilities & services at no extra charge to the Customers.

Eligible person/s and eligible organizations or agencies as approved can

open Savings Account with the Bank. Savings Account can be opened with

Rs.1000/- and minimum balance to be kept in the Account is Rs.1000/- only.

Amount can be withdrawn from Savings Account by way of cheques or

withdrawal slips. Interest is paid half yearly on Savings Account at 3.5 %

p.a. as per the directives fixed by Reserve Bank of India.

Eligibility – Savings Account can be opened in the name of Individuals

Singly or Jointly or by minors of the age 10 years or above or under natural /

86


legal Guardianship or by an illiterate or blind person. Documents Required

Duly filled in Account Opening Form with valid residential proof, PAN

Number, 1 photograph and introduction by existing account holder of the

Bank.

Minimum Balance – Account holder is required to maintain minimum

balance of Rs.1000/ in the account.

Facilities Offered:

1.ATM Card Facility with withdrawal Limit of Rs.15,000/=

2.Any Branch Banking Facility through out all Branches of the Bank for

operations in Savings / Term Deposit Accounts.

3. SMS banking facility for Balance Inquiry, Statement Details,

Transaction Alerts

4. 24x7 Cheque Issuance Machine facility for getting personalized

cheques at any time.

5. Statement of Account at monthly intervals by e-mail

6. 24x7 Cheque Deposit Facility with acknowledgement for Cheque

deposited

7. Nomination Facility

8. Internet Banking

87


Current Account

Current Accounts can be opened by Businessmen / Proprietorship /

Partnership Firms / Public or Private Companies requiring to do multiple or

numerous business transactions. Customer can deposit or withdraw the

amount as many times required. Minimum Balance to be maintained is

Rs.2000/- in the account.

Eligibility – Current Account can be opened by Businessmen

/Proprietorship / Partnership Firms/Public or Private Companies to be

operated by Authorized Signatories.

Documents Required – Duly filled in Account Opening Form with valid

residential proof, PAN Number, Registration Certificate, Partnership Deed,

Memorandum of Association as the case may be.

Facilities Offered :

1.ATM Card Facility with withdrawal Limit of Rs.20,000/= for Proprietary

Accounts

2. Any Branch Banking Facility through out all Branches of the

Bank for operations in Current Accounts.

3. SMS banking facility for Balance Inquiry, Statement Details, Transaction

Alerts

4. 24x7 Cheque Issuance Machine facility for getting personalized cheques

at any time.

5. Statement of Account at monthly intervals by e-mail.

6. 24x 7 Cheque Deposit Facility with acknowledgement for cheques

88


deposited

7. Internet Banking

8.Deposits Schemes

COMMERCIAL LOANS

Tradease

Hassle free credit facility for traders

Sanjeevani

Exclusive Financial Solutions for Professionals

Small & Medium Size Enterprises

Bank has special focus for extending credit facilities to Small and Medium

Size Enterprises. Bank has customized solutions for Small Business

Enterprises, Small Scale Industries and Medium Scale Industries. Credit

Facilities are offered in the nature of Term Loans for establishment of new

industries, acquisition of machineries, technology up-gradation, or execution

of ad-hoc orders or for expansion, modernization or diversification

programs. Finance offered will be in the form of Fund base as well as non

fund base facilities as per the requirements of the Business. Working Capital

Term Loan requests are considered for viable small and medium size

enterprises requiring infusion of fresh funds by way of one time core

working capital assistance.

89

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http://www.thanejanata.co.in/small-medium.html

http://www.thanejanata.co.in/sanjeevani.html

http://www.thanejanata.co.in/tradease.html


Other Loans

Bank is actively lending to all sectors of the Industries \ Business and

provide customized solutions for Small Business activities, Transporters,

wholesalers, stockiest, Distributors, Retailers having exclusive showrooms

dealing in FMCG products, readymade garments, consumer durables,

pharmaceutical stores, etc. Bank also actively considers Working Capital

Term Loans for execution of ad-hoc orders or Loans against mortgage of

existing securities for specified purposes

RETAIL LOANS

Swayam Siddha Loan

Kalpataru Consumer Finance

Auto Finance Scheme

SadaSavli Housing Loan

Bhushan Computer Loan Scheme

Travel Now

90

http://www.thanejanata.co.in/travel_now.html

http://www.thanejanata.co.in/bhushan-computer-loan.html

http://www.thanejanata.co.in/bhushan-computer-loan.html

http://www.thanejanata.co.in/sadasavli.html

http://www.thanejanata.co.in/auto-finance.html

http://www.thanejanata.co.in/kalpataru.html

http://www.thanejanata.co.in/swayam-siddha.html

http://www.thanejanata.co.in/other-loans.html


NRE ACCOUNTS

NRE Account is Non Resident External Rupee Account maintained as

Savings or Term Deposit Account, in Indian Rupees only. NRE Accounts

can be opened with Funds remitted from abroad

• Persons of Indian nationality or origin residing abroad can open NRE

Savings or Term Deposit Accounts.

• Accounts can be opened jointly with other Non Resident Indian

• Power of Attorney or mandate can be given to a resident Indian to operate

the account subject to withdrawal being in Indian Rupees.

• Remittance made from abroad can be credited to NRE Accounts after

realization at prevailing buying rate for the currency remitted.

• Income from the deposit is not taxable

• Balance in the Account can be withdrawn in Indian Rupees or can be

remitted abroad when required Interest Rates Applicable for NRE Accounts

91

http://www.thanejanata.co.in/interest-rates.html


FOREX

FOREIGN EXCHANGE SERVICES

• Currency Changing

We change all the convertible currencies in exchange of Indian Rupees for

our clients. Also we issue the foreign currency for the persons going on

business tour or leisure trips, individually or in group.

• Traveller's Cheque

We issue Travellers cheques of American Express Bank for USD, EURO,

GBP which can be availed by the persons going abroad for business, leisure

trips. We also exchange all travellers cheques for the customers against

rupees.

• Remittances

• POST – SHIPMENT

Handle the documents on collection for our exporters and credit the proceeds

on realisation. Negotiate the documents through our correspondents against

specific sanction of limits. Grant advance against the export bills sent on

collection at a concessional rate of interest. Handle the inward remittances

received as advance payments for exports.

92


• RUPEE EXPORT CREDIT

• IMPORT SERVICES

• Import Payments \ Outward Remittances:

• Import Letter of Credit:

• Bank Guarantee: Bank Guarantee facility to our clients guaranteeing their

performance / financial obligations

• Co-acceptance facilities:

The Thane Janata Sahakari Bank has successfully implemented the "Core

Banking Solution" (CBS) developed by M/s Infrasoft Technologies Ltd.

The Bank state of art Data Center equipped to offer 24x7 services to all the

customers of the Bank. Implementation of Core Banking Solution has

helped us to migrate the Branches from being the processing centers to

marketing customer's centric outfits. All our Branches are offering secured

Any Branch Banking Services which are online across all the Branches of

the Bank.

Services Offered are

1.Any Where Cash Deposit

93


Customers of the Bank can deposit the cash at any branches of the Bank and

the amount will get credited instantly to Customers Account irrespective of

the Branch where account is opened.

2.Any Where Cash Withdrawal

Customers of the Bank can withdraw the cash from any of the branches of

the bank by presenting the cheque across the counter. Facility is opened to

all the Customers of the Bank. Similarly Funds can be transferred from one

branch to another branch of the bank by giving the necessary instructions &

cheque for the amount to be transferred.

3.Any Where Balance Passbook / Statement Printing

All the Customers of the Bank can get the pass book printed or Statement at

any of the Branches of the bank

4.Any Where Balance Term Deposit Receipt Open / Closure / Receipt

Print

Customers of the Bank can open Term Deposit Receipts at any of the

Branches from the Branch where Customer has the account. Similarly the

Term Deposit Receipt opened at other Branches can be closed or renewed at

maturity instantly. y Branch Banking

94


5.SMS Banking Service

SMS Banking brings the Banking at your fingertips. Bank has introduced the

SMS Banking Facility for its customers.

Under SMS Banking following facilities are offered to the Customers.

• Latest Balance in the Account

• Details of the last 3 transaction OF the Account

• Cheque Return Alert

• Transaction Alert

• Term Deposit Maturity Alert

6.SHARE HOLDER SCHEME

Well being of the Shareholders is always focus area for The Thane Janata

Sahakari Bank Limited. For benefit of the Shareholders following

Medical\ Financial Assistance Schemes are available.

7.FRANKING FACILITY

Customers Of the Bank can avoid inconvenience of carrying heavy cash

and waiting together for long time in queue for collecting the documents.

95


TJSB Bank is authorised and has installed Franking Machines at its

Branches to make frank impression of stamps on all kinds of instruments

on which stamp duty is payable under the provisions of Indian Stamp Act

1899 and the Bombay stamp act 1958.

Our branches at Main Branch and Pune Branch are Offering Stamp

Franking Facilities to all the customers of bank.

"TJSB has started Customer Contact Centre (CCC)" at its register

office Deendayal Bhavan", Jambhali Naka, Thane 400 601.

The CCC is as present undertaken following customer related activities:

· SMS Banking promotion

· Internet Banking promotion

· PAN card follow up

· ATM card replacement

· Overdue Follow-up

96


DOMESTIC TERM DEPOSITS

Table No.2.1

97

Days Revised w.e.f.

01.10.2010

15 days to 45 days 4.00



181 days to less than 1 year 6.00

1 year to 554 days 7.00

555 days 7.50

556 days to less than 2 years 7.25

2 years to 999 days 7.50

1000 days 7.75

1001days to less than 3 years 7.25

3 year to less than 5 years 7.25

5 years to less than 8 years 7.50

8 years and up to 10 years 7.75


The revised interest rates for Domestic Term Deposits 'Below Rupees One

Crore' effective from the 01.10.2010 would be as under:

98


99

Interest Rates on Domestic Term Deposits

( w.e.f. 1st October 2010 )

Particulars

General / Co-

operative Societies /

Banks / Trusts(p.a.)

Senior Citizens

(p.a.)

Revised

for

deposit

upto Rs.

25 lacs

Revised

for

deposit

above Rs.

25 lacs

Revised

for

deposit

upto Rs.

25 lacs

Revised for

deposit

above Rs.

25 lacs

7 days to 45 days 3.50% 3.50% 3.50% 3.50%

46 days to 180 days 5.00% 5.00% 5.00% 5.00%

181 days to 12

months6.00% 6.00% 6.00% 6.00%

Above 12 months to

24 months7.25% 7.00% 7.75% 7.25%

Above 24 months to

36 months7.75% 7.25% 8.25% 7.75%

Above 36 months to

60 months8.00% 7.50% 8.50% 8.00%

Above 60 months to

120 months7.75% 7.25% 8.25% 7.75%


Table No. 2.2

HOME LOANS - INTEREST RATES

STATE BANK OF INDIA

100


1. SBI EASY HOME LOAN (JULY 2010)

(Base Rate =7.50% p.a.)

Interest rate for proposals sanctioned between

1st July2010 and 30th September 2010.

Loan amount Maximum Rs.50 Lacs

Facility Type OD (MaxGain) or TL

Interest during first

year

8% p.a.(Fixed)

2nd & 3rd year 9% p.a.(Fixed)

Floating interest rate

after 3rd year

1.75% above Base Rate, Currently effective

rate being 9.25% p.a.

Fixed interest rate

after 3rd year

3.50% above the Base Rate prevailing at the time

of reset, with a reset frequency of 5 years.

TABLE.NO.3.1

2.SBI ADVANTAGE HOME LOAN (JULY 2010)

Interest rate for proposals sanctioned between

101


1st July2010 and 30th September 2010.

Loan amount Above Rs.50 Lacs

Facility Type TL

Interest during first

year

8% p.a.(Fixed)

2nd & 3rd year 9% p.a.(Fixed)

Floating interest rate

after 3rd year

2.25% above the Base Rate, Currently

effective rate being 9.75% p.a.

Fixed interest rate

after 3rd year

3.50% above the Base Rate prevailing at the

time of reset, with a reset frequency of 5 years.

TABLE.NO.3.2

EDUCATION LOAN SCHEME

STATE BANK OF INDIA

102


Base Rate 7.50 % w.e.f. 01.07.2010

SBI Student Loan Scheme

Loan Amount Rate of Interest

For loans upto Rs.4

lacs

3.75% above Base Rate, currently 11.25% p.a.

Above Rs.4 lacs and

upto Rs.7.50 lacs

5.25% above Base Rate, currently 12.75% p.a.

Above Rs.7.50 lacs 4.25% above Base Rate, currently 11.75% p.a.

(0.50% concession in interest for girl student)

TABLE.NO.4.1

HOUSING LOAN – INTEREST RATES

THE THANE JANATA SAHAKARI BANK LTD

Purpose To acquire /construct House/Flat for self

accommodation or to take over housing loan

103


from financial institutions.

Loan Amount Max. upto Rs. 50.00 lacs.

Rate of Interest

Fixed Floating

Loans upto

Rs.20 lacs

13.50% for 5

years10.00%

Loans above

Rs.20 lacs

13.50% for 5

years10.25%

Margin : 15% to 30% as the case may be

Repayment Maximum upto 15 years.

Various Repayment Options

: Regular/ Stepup/Accelerated.

Service Charges 0.80% of Loan Amount

(Exclusive of Stamp Duty for Mortgage).

Security: Equitable/Registered mortgage of

flat/house.

TABLE.NO.5

SWAYAM SIDDHA LOAN : For granting loans to the members of

“Women Self Help Groups” (SHG) so as to cater needs of weaker section in

the society is provided by TJSB

104


1. TYPE OF CREDIT FACILITY TO BE GRANTED UNDER THE

“SWAYAM SIDDHA” SCHEME:

a. Term Loan to MBG (Max Rs. 2.00 Lacs)

b. Term Loan to Individual Members of MBG (Max Rs. 50,000)

2. ELIGIBILITY:

1. MBG should be registered

2. MBG should have been in active existence for period of six months

3. Size of the Bachat Gat Min 11 and Max 20 persons.

4. Savings per month by each member – Min Rs.50/- for Urban areas

and Rs.25/- for semi urban areas.

5. There is no ceiling on maximum contributions.

6. The saving duration will be for a minimum period of 60 months and

maximum period of 120 months in the form of Recurring Deposit. ( RD to

be lien marked till the repayment of loan)

7. The person should be a member of MBG. His application should be

referred by Executive / Administrative body of the MBG under their seal

and signature for consideration of loan proposal.

3. LOAN LIMIT:

i. Term Loan to MBG (Max Rs. 2.00 Lacs) for on lending to group

members for business, education, ceremonial purpose and for medical)

ii. Term Loan to Individual Members of MBG (Max Rs. 50,000)

105


Max Rs.50,000/ for business

Max Rs.50,000/ for education

Max Rs.15,000/ for ceremonial expenses

Max Rs.10,000/ for medical expenses

4. SECURITY, MARGIN, BANK CHARGES & PRE PAYMENT

CHARGES is NIL

5. REPAYMENT PERIOD: Max 60 months. The SHG should make

repayment to the Bank.

6. RATE OF INTEREST: 10.00% p.a. at monthly rests.

FINANCIAL PERFORMANCE OF SBI

State Bank of

India

106


Profit & Loss

account

in Rs.

Cr.

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

Income

Interest Earned 35,794.93 39,491.03 48,950.31 63,788.43 70,993.92

Other Income 7,388.69 7,446.76 9,398.43 12,691.35 14,968.15

Total Income 43,183.62 46,937.79 58,348.74 76,479.78 85,962.07

Expenditure

Interest expended 20,159.29 23,436.82 31,929.08 42,915.29 47,322.48

Employee Cost 8,123.04 7,932.58 7,785.87 9,747.31 12,754.65

Selling and Admin

Expenses 1,853.32 3,251.14 4,165.94 5,122.06 7,898.23

Depreciation 729.13 602.39 679.98 763.14 932.66

Miscellaneous

Expenses 7,912.15 7,173.55 7,058.75 8,810.75 7,888.00

Preoperative Exp

Capitalised 0.00 0.00 0.00 0.00 0.00

Operating Expenses 11,872.89 13,251.78 14,609.55 18,123.66 24,941.01

Provisions &

Contingencies 6,744.75 5,707.88 5,080.99 6,319.60 4,532.53

Total Expenses 38,776.93 42,396.48 51,619.62 67,358.55 76,796.02

Net Profit for the

Year 4,406.67 4,541.31 6,729.12 9,121.23 9,166.05

Extra ordionary

Items 0.00 0.00 0.00 0.00 0.00

107


Profit brought

forward 0.34 0.34 0.34 0.34 0.34

Total 4,407.01 4,541.65 6,729.46 9,121.57 9,166.39

Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 736.82 736.82 1,357.66 1,841.15 1,904.65

Corporate Dividend

Tax 103.34 125.22 165.87 248.03 236.76

Per share data (annualised)

Earning Per Share

(Rs) 83.73 86.29 106.56 143.67 144.37

Equity Dividend (%) 140.00 140.00 215.00 290.00 300.00

Book Value (Rs) 525.25 594.69 776.48 912.73 1,038.76

Appropriations

Transfer to Statutory

Reserves 3,566.51 3,682.15 5,205.69 6,725.15 6,495.14

Transfer to Other

Reserves 0.00 -2.88 -0.10 306.90 529.50

Proposed

Dividend/Transfer to

Govt 840.16 862.04 1,523.53 2,089.18 2,141.41

Balance c/f to

Balance Sheet 0.34 0.34 0.34 0.34 0.34

Total 4,407.01 4,541.65 6,729.46 9,121.57 9,166.39

FINANCIAL PERFORMANCE

The Thane Janta Shakari Bank Ltd

108


Balance Sheet Rs. in thousands

Year 2006 2007 2008 2009 2010

Capital & Liablities

Total Share Capital 123170 144784 182671 275708 400890

Reserves 1571839 1836923 2506047 2811397 2909338

Deposits 10730590 13285218 20391709 23470549 27997289

Borrowings 164097 427791 676354 1331724 1927530

bills for collection 36065 56648 39945.5 161802 125728

Overdue interest reserve 1222977 455961 796279 540287

Interest Payable 53562 49038 64086 92320 124506

Amortisation Reserve 380604 0 69797 139540 203587

Profit & Loss A/c 239952 251888 243019 243552 441929

Other Liabilities & Provisions 167422 226930 491373 1151994 1281821

Total Liabilities 13467301 17502197 25120963 30474865 35952905

Assets 2006 2007 2008 2009 2010

Cash & Balances with RBI 541581 715554 1890611 1557785 1990078

Balance with Banks, Money at

Call 1942369 3209164

109


Advances 6804284 9029258 12854632 15066161 16790797

Investments 5302352 6012802 8831147 9038210 11002772

Interest Receivable 534457 1526449 1291182 1143583 1002768

Branch Adjustments 36065 56648 39945.5 4602 3951

Bills Receivable 35038 19905 27240 161802 125728

Gross Block(Fixed Assets) 154365 139162 177888 198265 480980

Accumulated Depreciation

Net Block

Capital Work In Progress 2419 8317 40544 17922

Other Assets 59159 972695 989434

Cost of Acquisition 348849 339311

Total Assets 13467301 17502197 25120963 30474865 35952905

The Thane Janata Sahakari

Bank Ltd

Profit and Loss A/c Rs. in thousands

2006 2007 2008 2009 2010

Income

Interest Earned 1079942 1299301 1944323 2555731 3024302

Other Income 69126 100436 123044 159900 320502

Total Income 1149068 1399737 2067367 2715631 3344804

Interest expended 600369 647075 1116160 1533755 1858762

Employee Cost 128437 158036 191851 234105 252465

Depreciation 48565 41184 47928 53469 75046

Miscellaneous Expenses 0 35539 177769

Operating Expenses 355298 132867 260288 204024 131778

Provisions & Contingencies 16400 47700 67000 253596 129547

110


Profit Before tax 0 401143 589890

Income tax 0 160000 153500

Deferred tax 0 120987 141029 -3701 -5529

Net Profit for the Year 239949 251887 243011 243543 441919

Tables & Charts

Ratio Analysis

Ratios are aimed to assess profitability, productivity of assets/capital and

risk associated with operations. Though one can get some basic idea about

the bank or a company from the above ratios while evaluating percentage

statement and trend analysis, the level of comparison is restricted to few

ratios. Ratio analysis integrates financial statements to assess financial

health of the firm. Some of the important ratios in general are discussed

below.

111


Liquidity Ratio of SBI

CURRENT RATIO OF LAST 5 YEARS

0.05 0.05

0.07

0.04 0.04

0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

2005-06 2006-07 2007-08 2008-09 2009-10

Year

Ra

tio

The ratio is 2:1 but the Public Sector Companies have a very low current

ratio as they have very little need for Current Assets. Liquidity position of

the bank is not good. Less will be the firm’s ability to meet current

obligations.

112


QUICK RATIO OF LAST 5 YEARS

5.5

6.526.15

5.74

9.07

0

1

2

3

4

5

6

7

8

9

10

2005-06 2006-07 2007-08 2008-09 2009-10

Year

Rat

io

It is more rigorous and penetrating test of the liquidity position of a firm. 1:1

is the satisfactory level to meet all current claims. Banks short term solvency

is in better position.

113


Profitability Ratio of SBI

NET PROFIT OF SBI

4407 4541

6729

9121 9166

2005-06 2006-07 2007-08 2008-09 2009-10

Year

Am

ou

nt

in R

s (c

rore

s)

Net Profit is not increasing at a satisfying level.

114


OPERATING PROFIT OF SBI

1129910000

13107

1791517055

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

2005-06 2006-07 2007-08 2008-09 2009-10

Year

Am

ou

nt

in R

s. (

cro

res)

Operating Profit has decreased in the year 2009-10 as compared to the year

2008-09.

Expenses should be monitored.

115


Capital Structure Ratio of SBI

Debt-Equity Ratio

0

2

4

6

8

10

12

14

16

2005-06 2006-07 2007-08 2008-09 2009-10

Year

% R

aio

The Ratio is decreasing as compared to the previous year, it is the danger

signal for owners.

116


Earnings & Dividend Per Share

0

20

40

60

80

100

120

140

160

2005-06 2006-07 2007-08 2008-09 2009-10

Year

In R

s.

EarningsPer Share

DividendPer Share

117

Showing the Graph of Deposits & Advances

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2005-06 2006-07 2007-08 2008-09 2009-10

Year

Am

ou

nt

in R

s. (

bill

ion

)

Deposits

Advances


CURRENT RATIO OF TJSB

1.06

1.08

1.1

1.12

1.14

1.16

2005-06 2006-07 2007-08 2008-09 2009-10

YEAR

RA

TIO

%

The standard Current ratio is 2:1, but the Public Sector Companies have a

very low current ratio as they have very little need for Current Assets.

Liquidity position of the bank is not good. Less will be the firm’s ability to

meet current obligations.

118


QUICK RATIO OF TJBS

0.62

0.64

0.66

0.680.7

0.72

0.74

0.76

0.78

2005-06 2006-07 2007-08 2008-09 2009-10

YEAR

RA

TIO

%

It is more rigorous and penetrating test of the liquidity position of a firm. 1:1

is the satisfactory level to meet all current claims. But here Banks short term

solvency is not in better position.

119


SHOWING DEPOSITS & ADVANCES OF TJSB

0

500

1000

1500

2000

2500

3000

2005-06 2006-07 2007-08 2008-09 2009-10

Year

Rs

. in

cro

res

Deposits

Advances

120


Debt Equity Ratio of TJSB

6.336.70

7.58 7.60

8.46

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

2005-06 2006-07 2007-08 2008-09 2009-10

Year

Ra

tio

%

The Ratio is increasing as compared to the previous year, firm is able to

provide the rate of dividend to the stakeholders/ owners.

121


GROSS PROFIT & NET PROFIT OF TJSB

0

10

20

30

40

50

60

70

80

2005-06 2006-07 2007-08 2008-09 2009-10

Year

Rs

In c

rore

s

Gross Profit

Net Profit

From the above chart of Gross Profit & Net Profit of TJSB we can conclude

that though there is a good increase in the Gross Profit in past years as the

Operating Expenses of the bank is more, so it has an impact on the Net

Profit of the bank.

122


CHAPTER NO.6

COMPARISON OF LATEST SERVICES PROVIDED

State Bank of India :

1.MOBILE BANKING

State Bank Freedom – Your Mobile Your Bank

Away from home, balance enquiries can be made and/or money sent to the

loved ones or bills can be paid anytime 24x7!!! That is what State Bank

FreedoM offers -convenient, simple, secure, anytime and anywhere banking.

1. Mobile Banking Service over Application/ Wireless Application

Protocol (WAP)

The service is available on java enabled /Android mobile phones (with or

without GPRS) where the user is required to download the application on to

the mobile handset. The service can also be availed via WAP on all phones

(java/non java) with GPRS connection.

The following functionalities are available:

Funds transfer (within and outside the bank)

Interbank Mobile Payment Services (IMPS):for details.

Enquiry services (Balance enquiry/ Mini statement)

Cheque book request

123


Demat Enquiry Service

Bill Payment (Utility bills, credit cards, Insurance premium),

Donations, Subscriptions

Mobile Top up

M Commerce (Top up of Tatasky, BigTV, SunDirect, DishTV,

DigitalTV and Videocon d2h connections, SBI life insurance

premium)

Business Rules

• All Current/ Savings Bank Account holders in P segment are

eligible.

• Transaction limit per customer per day is Rs.50,000/- with a

calendar month limit of Rs.2,50,000/-

• All customers can avail the Service irrespective of their telecom

service provider.

• The Service is free of charge. SMS/GPRS cost will be borne by the

customer.

2. Mobile Banking Service over SMS:

The service is available on all phones (java/non java) with/without GPRS

connection. No need to download the application. Ordinary SMS charges are

applicable.

124



• Enquiry Services (Balance Enquiry/Mini Statement)

• Mobile Top up

• DTH Top up/ recharge

• IMPS- Mobile to Mobile Transfer

• Change MPIN

Business Rules


eligible.

• Transaction limit per customer per day is Rs.1,000/- with a calendar

month limit of Rs.5,000/-

• All customers can avail the Service irrespective of telecom service

provider.

• The Service is free of charge. SMS cost will be borne by the

customer.

• As a matter of abundant precaution, Customers are requested to

delete all the messages sent to the number 9223440000, once the

response for their request has been received.

3. Mobile Banking Service over USSD (Unstructured Supplementary

Service Data)

The service is available on all phones (java/non java) with/without GPRS

connection. No need to download the application.

125



• Enquiry Services (Balance Enquiry/Mini Statement)

• Mobile Top up

• Funds Transfer (within Bank)

Business Rules


eligible.

• Transaction limit per customer per day is Rs.1,000/- with a calendar

month limit of Rs.5,000/-

• The Service is available for subscribers of select telecom operators

only.

• The Service is free of charge. USSD session charges will be borne

by the customer.

• The service is session based and requires a response from the user

within a reasonable time.

126


2.ASBA

IPO-APPLICATIONS SUPPORTED BY BLOCKED AMOUNT

(ASBA)

SBI has brought a new hassle free solution for investment in IPO

called e-Invest. Under the instructions of SEBI, Bank has introduced this

supplementary process for applying in public issues. Unlike the current

system of applying in IPOs using cheques, where your funds are blocked

unproductively as application money till the finalisation of the bid, Under e-

Invest your funds will continue earning interest during the application

processing period. Bank will mark a lien on the deposit account of the

investor to the extent of the application money. Lien will be removed

immediately after finalization of the basis of allotment. If bid is successful,

lien will be removed and the shares allotted will be transferred to the

applicant’s Demat account. This facility is also available for right issues.

An Investor can apply through ASBA, provided he/she:

is from any of the approved category eligible to apply in IPO as

per SEBI guidelines.

is maintaining a Savings Bank or Current Account with SBI.

127


is having Demat account with any of the DP along with

Permanent Account Number (PAN).

has sufficient clear balance in his/her Savings Bank or Current

account (including overdraft account) for application money.

An Investor can also modify, revise or delete the bid within

bidding period.

An Investor can make 5 applications from a single deposit

account.

1061 branches have been designated for this purpose.

The product is also available to the users, of our “Internet

Banking” with transaction rights.

Internet banking users should log on to www.onlinesbi.comand go

to DEMAT/ASBA option. He/She can apply electronically

without need of physical application form. He/She should have

DP A/c with any service provider.

128

https://www.onlinesbi.com/


3.MULTI-CITY CHEQUE

1.Personal Segment:

A Multi-City Cheque (MCC) is one that can be written by the

customer in favour of his client and is payable at par at all branches of the

Bank. MCC can be issued in cheque operated accounts (SB and Current), in

addition to normal cheque books. The MCC facility is to be used only for

genuine transactions / bonafide remittances. No cash payments will be made

to third parties at other branches.

The upper limit for issue of MCCs is Rs.2 lacs. The issue charges for MCC

are Rs. 3 per cheque leaf and will be debited from the account at the time of

issue of the cheque book. There are no transaction charges.

4.NEW PENSION SYSTEM (NPS)

New Pension System for every Citizen was introduced from 1st May 2009 by

the Pension Fund Regulatory and Development Authority to provide old age

pension security to citizens in the age group of 18-60. A brief detail of the

Scheme (Tier I & Tier II) is as below:

NPS is a voluntary Pension System of Pension Fund Regulatory and

Development Authority (PFRDA) open to all citizens in the age group

of 18-60 years.

The Scheme is operative from 01.05.2009.

The objective is to provide old age pension; reasonable market based

returns over long term

129


Bank designated branches i.e. Point of Presence-Service Provider

(POP-SP) accept the application form and get the subscribers

registered with Central Record keeping Agency (CRA) for generation

of the Permanent Retirement Account Number (PRAN).

The PRAN will be quoted in all future transactions.

There are two models i.e. Tier I and Tier II.

Tier-I account is where you contribute your savings for retirement

into a non-withdrawable account till you reach 60 years and draw

pension for the rest of your life.

In case of Tier I

1. Minimum contribution at the time of account opening -Rs.500/-

2. Minimum amount per contribution - Rs. 500/-

3. Minimum Account Balance at the end of FY - Rs. 6000/-

4. Minimum number of contributions in a year – 1

The subscriber can exit the scheme after attaining 60 years of age.

He/She has to compulsorily annuitize 40% of the accumulated

pension wealth. Option to annuitize 100 % of the corpus is also

available.

A Tier-II account is a voluntary savings account form which you are

free to withdraw your savings whenever you wish.

The facility of Tier II account is being offered from December 1, 2009

to all citizens of India including Government employees mandatorily

covered by NPS.

130


In case of Tier II activation of Government employees, mandatorily

covered by NPS, There are two type of employees:

I)IRA Complaint - Those Government employees who are having

PRAN Card.

II) Non-IRA Complaint - Those Government employees who are

having only PRAN number, not having PRAN Card. For Tier II

activation of these employees KYC verification is required.

The Tier-II would enable the existing Permanent Retirement Account

(PRA) holders to build savings through investments over and above

those in the Tier I pension account. An active Tier I account will be a

pre-requisite for opening of a Tier II account.

No additional CRA charges would be levied for account opening and

annual maintenance in respect of Tier II. However, CRA will charge

separately for each transaction in Tier II, the charges being identical to

the transaction charge structure in Tier I

There are no limits on number of withdrawals in Tier II.

There is facility for separate nomination and scheme preference in

Tier I and Tier II.

There is facility of one-way transfer of savings from Tier II to Tier I.

Bank details will be mandatory for opening a Tier II account.

No separate KYC for Tier II account opening will be required; the

only requirement is a preexisting Tier I IRA Compliant account.

In case of Tier II,

1.Minimum contribution at the time of account opening -Rs.1000/-

131


2.Minimum amount per contribution - Rs. 250/-

3.Minimum Account Balance at the end of FY-Rs. 2000/-

4.Minimum number of contributions in a year - 1

In case of Composite Application for Tier I and Tier II both,

Minimum contribution at the time of account opening is Rs. 1500/-.

132


133


134


135


136