Loans & Advancess in SBI

A STUDY ON LOANS & ADVANCES OF STATE
BANK OF INDIA - BANGALORE
A REPORT SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF

THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION OF
BANGALORE UNIVERSITY
SUBMITTED BY
POTHGAL NARASAN GOWDA
REG. NO.: 07ACCM6043
Under the Guidance of:

Mr. BIRENJAN DIGAL M.Com., M.B.A., (M.Phil)
FACULTY
AL-AMEEN INSTITUTE OF MANAGEMENT STUDIES

HOSUR ROAD
OPPOSITE TO LALBAGH MAIN GATE
BANGALORE
2009
TABLE OF CONTENTS
CHAPTER NO. CONTENTS PAGE NO.

1 INTRODUCTION 1 – 17
1.1 Indian Banking System 01
1.2 Indigenous Banking in India 02
1.3 Indian Financial System 03
1.4 The Structure of Banking System 04
1.5 Priority Sector in Banks 12
1.6 Introduction to Loans 14
2 RESEARCH DESIGN 18 – 19
2.1 Statement of the Problem 18
2.2 Objective of the Study 18
2.3 Scope of the Study 18
2.4 Sampling 18
2.5 Methodology 18
2.6 Sources of Data 19
2.7 Plan of Analysis 19
2.8 Limitations 19
3 PROFILE OF THE COMPANY 20 – 47
3.1 State Bank of India – An Overview 20
3.2 Profitability 22
3.3 Advances 23
3.4 Deposits 26
3.5 SBI & its Associates 35
3.6 Subsidiaries & Joint Ventures 36
3.7 SBI & its Associates - Growth 37
3.8 IT initiatives of SBI 41
3.9 Competitors of SBI 41
3.10 Loans & Advances in SBI 42
4 ANALYSIS AND INTERPRETATION 48 – 71
SUMMARY OF FINDINGS,
5 72 – 74
SUGGESTIONS AND CONCLUSION
BIBLIOGRAPHY
ANNEXURE
LIST OF TABLE
Sl. No. Chapter No. Table No. Content Page No.

1 I 1.1 Classification of Indian Banks 11
2 III 3.1 Important points of SBI 21
3 III 3.2 Growth rate & Trend Profit of SBI 22
4 III 3.3 Growth rate & Trend of Advances 24
5 III 3.4 Growth rate & Trend Deposits 26
6 III 3.5 Performance factors of SBI & its 38
Associates
7 IV 4.1 Age Group of the respondents 48

8 IV 4.2 Occupation of the respondents 49
9 IV 4.3 Monthly Income of the respondents 50
10 IV 4.4 Type of Loan taken of the 51
respondents
11 IV 4.5 Bank from which the respondents 52

have obtained the loan
12 IV 4.6 Respondents perception towards 53

the interest of SBI

the documentation formalities of
SBI with other Banks.

the accessibility to SBI loans
compared to other Banks

the processing time of SBI loans

customer services of SBI loans

the loan processing fee and
documentation fee of SBI loans

the variety of financial products of
SBI
LIST OF CHART
Sl. No. Chapter No. Chart No. Content Page No.
1 III 3.2 Growth rate & Trend Profit of SBI 22
2 III 3.3 Growth rate & Trend of Advances 24

3 III 3.4 Growth rate & Trend Deposits 26
4 IV 4.1 Age Group of the respondents 48
5 IV 4.2 Occupation of the respondents 49
6 IV 4.3 Monthly Income of the 50

respondents
7 IV 4.4 Type of Loan taken of the 51
respondents
8 IV 4.5 Bank from which the respondents 52

have obtained the loan

the interest of SBI

the documentation formalities of
SBI with other Banks.

the accessibility to SBI loans

the processing time of SBI loans

customer services of SBI loans

the loan processing fee and
documentation fee of SBI loans

the variety of financial products of
SBI
CHAPTER: I
INTRODUCTION
1.1 INDIAN BANKING SYSTEM
Banks and institutional management in the country are under going

momentous “change”. India is one of the fastest growing economies in the
world. Banking dates back to 1786, the first bank established in India, then
the nationalization of banks in 1969 and recently the liberalization of the
same since 1991.
Indian banking is the lifeline of the nation. Its network over 62,500
offices is spread across the length and breadth of the country, servicing
nearly 40 crores depositors. Financing diverse needs of more than 6 crores
entrepreneur customers providing a nation wide framework for payment
clearing and settlements and vital sectors of economy like agriculture ,
industry, trade and commerce Banks play an important role in the growth of
GDP. According to revised estimates released by the Central Statistical
Organization (CSO) in May 2006, real GDP accelerated from 7.5 per cent in
2006-07 to 9.6 percent, an 18 year high during 2006-07.
Banks plays very important role in the economic development of

every nation. They have control over a large part of the supply of money in
circulation. A strong banking sector is, therefore, vital for growth, creation
of jobs, generation of wealth, eradication of poverty, entrepreneurial activity
and increasing the Gross Domestic Product (GDP), all necessary factors for
a country to emerge as a developed one. Banks are the main stimulus of the
economic progress of a country, because, the economic development highly
depends upon the extent of mobilization of resources, investment and on the
operational efficiency of the various segments of the economy.
The Reserve Bank of India (RBI), as the Central Bank of the country, is at the
head of this group. RBI is the central bank of the country since 1934. It regulates, controls
credit, issue licenses and functions as banker of all banks and the government. In general
the Indian Financial System consists of Commercial Banks, Development Banks, Co-
operative Banks and Specialized financial institutions.
1.2 INDIGENOUS BANKING IN INDIA:

During independence, India had an indigenous banking system with a
centuries –old tradition. This system had developed the hundi, a financial
instrument still in use that is similar to the commercial bills of Western
Europe. Hundis were used to finance local trade as well as trade between
port towns and inland Centres of production.
Indigenous bankers combined banking with other activities such as the
goldsmiths, merchants, and shippers. They usually belonged to certain castes
or communities, such as the Multanis, Marwaris and Chettiars, and they
differed in the extent to which they relied on their own resources, rather than
deposits and other funds for their lending.
Indigenous bankers often endorsed hundis issued by traders and

sometimes provided personal guarantee for loans from commercial banks.
Such bankers were collectively called as shroffs. The main moneylenders
were Sowkars (who lent to farmers by their own resources or funds
borrowed from Chettiars and other indigenous bankers) and the Pathans
(who lent mainly to poor).
1.3 INDIAN FINANCIAL SYSTEM:
The ancient Indigenous banking system gave raise to the Financial System in
India. The Financial System consists of many institutions, instruments and markets.
Financial institutions range from pawnshops and moneylenders to banks, pension funds,
insurance companies, brokerage houses, investment trusts and stock exchange.
The Indian financial system comprises of an impressive network of banks, other
financial and investment institutions, offering wide range of products and services, which
together function in a fairly developed capital and money markets. As such, financial
system has come to occupy an important role in the process of economic development.
The economic development of a country depends on its financial

structure. In the long run, the larger the proportion of financial assets to real
assets, the greater the scope of economic growth. Investment is a pre-
condition of economic growth.
The primary role of any financial institution is to act as a conduit for

the transfer of financial resources from net savers to borrowers i.e., from
those who spend less than they earn to those who earn less than what they
spend.
FIGURE 1.1
FUNCTIONS OF FINANCIAL INSTITUTIONS
F PROMOTING SAVINGS
I
N MOBILISING SAVINGS
A
N DISTRIBUTING SAVINGS
C
I
A CREATING CREDIT
L
FACILITATING TRADE
I
N FACILITATING PRODUCTION
S
T
I PROVIDING FINANCIAL SERVICES
T
U STRENGTHENING FINANCIAL
T MARKETS
I
O BUILDING INFRASTRUCTURE
N
S ECONOMIC DEVELOPMENT
1.4 THE STUCTURE OF BANKING SYSTEM:
The structure of banking system is determined by economic and

legal. The development of the economy and the spread of banking habit calls
for increasing banking services. The demand for these banking services
affects the banks’ structure and organization. National objectives and
aspirations result in government regulations, which have a profound
influence on the banking structure.
According to the IBA Bulletin, the banks in India are classified in to
six major categories are Public sector Banks, Private sector Banks, Foreign
Banks, State Co-operative Banks, District Co-operative Banks and Primary
Co-operative Banks.
Vasanth Desai (2006) from his book titled as ‘Banks and

institutional Management’ classified the structure of financial institutions in
India in to three major sectors
1. Commercial Banks
2. Co-operative Societies
3. Other Institutions.
1.4.1 COMMERCIAL BANKS
Commercial Banks are the oldest, biggest and fastest growing

financial intermediaries in India. They are also the most important
depositories of public sector and the most important disbursers of finance.
Commercial Banking in India is a unique system similar to that exists
nowhere in the world.
The commercial banking structure in India consists of:

Scheduled Commercial Banks and Unscheduled Banks. 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(6)(a) of the act.
FIGURE 1.2
FUNCTIONS OF COMMERCIAL BANKS
FUNCTIONS OF COMMERCIAL BANKS
PRIMARY FUNCTIONS SECONDARY FUNCTIONS
RECEIVING OF AGENCY GENERAL UTILITY

LENDING OF
DEPOSITS SERVICES SERVICES
FUNDS
OVERDRAFT
PAYMENT OF SAFE
CASH CREDIT
RENT CUSTOD
DISCOUNTONG
COLLECTING Y
TIME DEMAND BILLS OF
OF DEPOSIT
LIABILIT LIABIL EXCHANG
CHEQUE S
IES ITY E
S SAFE
FIXED SAVING LOANS AND
DEALING IN DEPOSIT
DEPO BAN ADVANCE
FOREIGN LOCKER
SITS K S
EXCHAN FACILITI
RECURRIN ACC VENTURE
GE ES
G OUN CAPITAL
LOANS AND TRANSFER
DEPO T GUARANTEES
ADVANC OF
SITS CURREN MONEY
MISCELLA T ES
ACTING AS ISSUE OF
NEOU ACC TRAVELL
S OUN TRUSTEE
S ERS
DEPO T CHEQUE
SITS ACTING AS
CASH REFERE
CERTI ES
FICAT MERCHANT
ES BANKING
ATM
CREDIT
CARDS
GIFT
CHEQUE
S
EXECUTOR &
TRUSTEE
MISCELLANE
OUS
CLASSIFICATION OF INDIAN COMMERCIAL BANKS:
Indian commercial banks can be broadly classified into two

categories. They are
i) Public Sector Banks
ii) Private Sector Banks
A. PUBLIC SECTOR BANKS:
Public sector Banks refer to commercial banks, which are owned

by the Central Government either directly or through the RBI. They are also
referred to as National Banks. They are established by special Acts passed
by the Parliament. Among the Public Sector Banks in India, United Bank of
India is one of the 14 major banks, which were nationalized on July 19,
1969. Its predecessor, in the Public Sector Banks, the United Bank of India
Ltd., was formed in 1950 with the amalgamation of four banks viz. Comilla
Banking Corporation Ltd. (1914), Bengal Central Bank Ltd. (1918), Comilla
Union Bank Ltd. (1922) and Hooghly Bank Ltd. (1932).
Public sector banks can be further classified in to two categories. They

are
1. State Bank of India
2. Associates banks
3. 14 Nationalized Banks
4. 6 Nationalized Banks
5. Regional rural banks
STATE BANK OF INDIA:
In accordance with the recommendation of the All India Rural Credit

Survey Committee, the Imperial Bank of India was nationalized and changed
in to the State Bank of India on 1st July, 1955 under a separate Act called the
State Bank of India (SBI) Act of 1955 passed on 8th May, 1955. The SBI
took over the assets and liabilities of the Imperial Bank of India.
SBI ASSOCIATES:
In accordance with the Recommendation of the All-India Rural

Credit, the SBI (Subsidiary Banks) Act was passed in September 1959 for
the merger of ten State associated banks. Today, there are only seven state
associated banks, which are connected with the SBI as its subsidiaries. The
seven Associate banks of the SBI are;
1. The State Bank of Bikaner and Jaipur (SBBJ)

2. The State Bank of Patiala (SBP)
3. The State Bank of Indore (SBIN)
4. The State Bank of Saurashtra (SBS)
5. The State Bank of Hyderabad (SBH)
6. The State Bank of Mysore (SBM)
7. The State Bank of Travancore (SBT)
Each of these subsidiary banks is an autonomous institution. It
has individually and independence in its day-to-day operations. The State
Bank of India has only the general power of direction, control and
supervision over the Associate banks
NATIONALIZED BANKS:
By the 1960s, the Indian banking industry has become an

important tool to facilitate the development of the Indian economy. At the
same time, it has emerged as a large employer, and a debate has ensued
about the possibility to nationalize the banking industry. Indira Gandhi, the-
then Prime Minister of India expressed the intention of the GOI in the
annual conference of the All India Congress Meeting in a paper entitled
"Stray thoughts on Bank Nationalisation. ."
The paper was received with positive enthusiasm. Thereafter,

her move was swift and sudden, and the GOI issued an ordinance and
nationalised the 14 largest commercial banks with effect from the midnight
of July 19, 1969. Jayaprakash Narayan, a national leader of India, described
the step as a "masterstroke of political sagacity." Within two weeks of the
issue of the ordinance, the Parliament passed the Banking Companies
(Acquition and Transfer of Undertaking) Bill, and it received the presidential
approval on 9th August, 1969.
A second dose of nationalisation of 6 more commercial banks

followed in 1980. The stated reason for the nationalisation was to give the
government more control of credit delivery. With the second dose of
nationalisation, the GOI controlled around 91% of the banking business of
India. After this, until the 1990s, the nationalised banks grew at a pace of
around 4%, closer to the average growth rate of the Indian economy
B.PRIVATE SECTOR BANKS:
Private banking in India was practiced since the beginning of banking

system in India. The first private bank in India to be set up in Private Sector
Banks in India was IndusInd Bank. It is one of the fast growing Private
Sector Bank in India. IDBI ranks the tenth largest development bank in the
world as Private Banks in India and has promoted a world class institutions
in India
The first Private Bank in India to receive an in principle approval

from the Reserve Bank of India was Housing Development Finance
Corporation Limited, to set up a bank in the private sector banks in India as
part of the RBI's liberalization of the Indian Banking Industry. It was
incorporated in August 1994 as HDFC Bank Limited with registered office
in Mumbai and commenced operations as Scheduled Commercial Bank in
January 1995.
The private sector can be further classified as follows
 Other private banks

 New-sophisticated private banks;
 Co-operative banks included in second schedule;
 Foreign banks in India, representative offices
 One non-schedule banks
There are 33 private banks in India and some of the private banks are
 Axis Bank
 HDFC Bank
 IDBI Bank
 ICICI Bank
 ING Vysya
 Karnataka Bank limited
 Kotak Mahindra Bank
 Yes Bank
 Lord Krishna Bank
1.4.2 CO-OPERATIVE SOCIETIES:
The Co-Operative banking sector has been developed in the

country to supplant the village moneylender, the predominant source of rural
finance, as the terms on which he made finance available have generally
been detrimental to the development of Indian agriculture.
The Co-Operative sector can be further classified into 4 types
 Primary Co-Operative credit societies

 Central Co-Operative banks
 State Co-Operative banks
 Land development banks
Table 1.1 below gives the names of all banks, which comes under
different classification. For the purpose of assessment of performance of
banks, the Reserve Bank of India categories them as public sector banks, old
private sector banks, new private sector banks and foreign banks.
TABLE: 1.1
CLASSIFICATION OF INDIAN BANKS
SBI Group Nationalized Other public sector Bank Private Sector Banks Foreign Bank
(Public Sector) Banks (PS)
1. State Bank of 1. Allahabad Bank IDBI and IDBI Bank Ltd. 1. Axis Bank (formerly 1. ABN AMRO Bank
India 2. Andhra Bank have been merged to form UTI Bank) N.V.
2. State Bank of 3. Bank of Baroda Industrial Development Bank 2. Bank of Rajasthan 2. Abu Dhabi
Bikaner & 4. Bank of India of India (IDBI) Ltd. IDBI is 3. Bharat Overseas Commercial Bank Ltd
Jaipur 5. Bank of notified as a scheduled bank Bank 3. American Express
3. State Bank of Maharashtra by the Reserve Bank of India 4. Catholic Syrian Bank
Hyderabad 6. Canara Bank (RBI) under the Reserve Bank 4. Antwerp Diamond
4. State Bank of 7. Central Bank of Bank of India Act, 1934. RBI 5. Centurion Bank of Bank
Indore India has categorized IDBI under Punjab 5. Arab Bangladesh Bank
5. State Bank of 8. Corporation Bank a new sub group "other 6. City Union Bank 6. Bank International
Mysore 9. Dena Bank public sector bank". 7. Development Credit Indonesia
6. State Bank of 10. Indian Bank Bank 7. Bank of America
Patiala 11. Indian Overseas Industrial Development Bank 8. Dhanalakshmi Bank 8. Bank of Bahrain &
7. State Bank of Bank of India (IDBI) Ltd 9. Federal Bank Kuwait
Saurashtra 12. Oriental Bank of 10. Kumfu Blade Bank 9. Bank of Ceylon
8. State Bank of Commerce 11. Ganesh Bank of 10. Bank of Nova Scotia
Travancore 13. Punjab & Sind Kurundwad 11. Bank of Tokyo
Bank 12. HDFC Bank Mitsubishi UFJ
14. Punjab National 13. ICICI Bank 12. Barclays Bank
Bank 14. IDBI Bank 13. BNP Paribas
15. Syndicate Bank 15. IndusInd Bank 14. Calyon Bank
16. Union Bank of 16. ING Vysya Bank 15. ChinaTrust
India 17. Jammu & Kashmir Commercial Bank
17. United Bank of Bank 16. Cho Hung Bank
India 18. Karnataka Bank 17. Citibank
18. UCO Bank Limited. 18. DBS Bank
19. Vijaya Bank 19. Karur Vysya Bank 19. Deutsche Bank
20. Kotak Mahindra 20. HSBC (Hongkong &
[After the Bank Shanghai Banking
amalgamation of New 21. Lakshmi Vilas Bank Corporation)
22. Lord Krishna Bank ( 21. JPMorgan Chase Bank
Bank of India with now Centurion Bank 22. Krung Thai Bank
Punjab National Bank, of Punjab) 23. Mashreq Bank
currently there are 19 23. Nainital Bank 24. Mizuho Corporate
nationalized banks in 24. Ratnakar Bank Bank
India] 25. Rupee Bank 25. Oman International
26. Saraswat Bank Bank
27. SBI Commercial 26. Société Générale
and International 27. Standard Chartered
Bank Bank
28. South Indian Bank 28. State Bank of
29. Tamilnad Mauritius
Mercantile Bank Scotia
29.
Ltd.
30. Thane Janata Taib Bank
30.
Sahakari Bank
31. Bassein Catholic
Bank
32. United Western
Bank
33. Yes Bank
SOURCE:"http://en.wikipedia.org/wiki/List_of_banks_in_India
1.5 PRIORITY SECTOR
Priority sector is the most important sector in India and more importance is
given for the development of this sector. Reserve Bank of India through periodical
Returns received from them by banks monitors priority sector lending by commercial
banks. Performance of banks is also reviewed in the various fora set up under the Lead
Bank Scheme (at State, District and Block levels).
Broadly, the priority sector comprises the following:
1. Agriculture
2. Small scale industries (including setting up of industrial estates)
3. Small road and water transport operators (owning up to 10 vehicles).

4. Small business (Original cost of equipment used for business not to exceed Rs
20 lakh)
5. Retail trade (advances to private retail traders up to Rs.10 lakh)
6. Professional and self-employed persons (borrowing limit not exceeding Rs.10

lakh of which not more than Rs.2 lakh for working capital; in the case of qualified
medical practitioners setting up practice in rural areas, the limits are Rs 15 lakh
and Rs 3 lakh respectively and purchase of one motor vehicle within these limits
can be included under priority sector)
7. State sponsored organizations for Scheduled Castes/Scheduled Tribes
8. Education (educational loans granted to individuals by banks)
9. Housing [both direct and indirect – loans up to Rs.5 lakh (direct loans up to Rs
10 lakh in urban/ metropolitan areas), Loans up to Rs 1 lakh and Rs 2 lakh for
repairing of houses in rural/ semi-urban and urban areas respectively].
10. Consumption loans (under the consumption credit scheme for weaker
sections)
11. Micro-credit provided by banks either directly or through any intermediary;

Loans to self help groups (SHGs) / Non Governmental Organizations (NGOs) for
on lending to SHGs.
12. Loans to the software industry (having credit limit not exceeding Rs 1 crore
from the banking system)
13. Loans to specified industries in the food and agro-processing sector having
investment in plant and machinery up to Rs 5 crore.
14. Investment by banks in venture capital (venture capital funds/ companies

registered with SEBI)
As per the current interest rate policy, in the case of loans up to Rs 2 lakh, the
interest rate should not exceed the prime-lending rate (PLR) of the bank, while in the case
of loans above Rs 2 lakh; banks are free to determine the interest rate.
1.6 INTRODUCTION TO LOAN
A loan is a type of debt. This article focuses exclusively on monetary loans,

although, in practice, any material object might be lent. Like all debt instruments, a loan
entails the redistribution of financial assets over time, between the lender and the
borrower. The borrower initially does receive an amount of money from the lender,
which he has to pay back, usually but not always in regular installments, to the lender.
This service is generally provided at a cost, referred to as interest on the debt. A loan is of
the annuity type if the amount paid periodically (for paying off and interest together) is
fixed.
A borrower may be subject to certain restrictions known as loan covenants under

the terms of the loan. Acting as a provider of loans is one of the principal tasks for
financial institutions. For other institutions, issuing of debt contracts such as bonds is a
typical source of funding.
Legally, a loan is a contractual promise between two parties where one party, the
creditor, agrees to provide a sum of money to a debtor, who promises to return the money
to the creditor either in one lump sum or in parts over a fixed period in time. This
agreement may include providing additional payments of rental charges on the funds
advanced to the debtor for the time the funds are in the hands of the debtor (interest).
TYPES OF LOANS
SECURED
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property)
as collateral for the loan.
A mortgage loan is a very common type of debt instrument, used by many individuals to
purchase housing. In this arrangement, the money is used to purchase the property. The
financial institution, however, is given security — a lien on the title to the house — until
the mortgage is paid off in full. If the borrower defaults on the loan, the bank would have
the legal right to repossess the house and sell it, to recover sums owing to it.
In some instances, a loan taken out to purchase a new or used car may be secured by the
car, in much the same way as a mortgage is secured by housing. The duration of the loan
period is considerably shorter — often corresponding to the useful life of the car. There
are two types of auto loans, direct and indirect. A direct auto loan is where a bank gives
the loan directly to a consumer. An indirect auto loan is where a car dealership acts as an
intermediary between the bank or financial institution and the consumer.
A type of loan especially used in limited partnership agreements is the recourse note.
A stock hedge loan is a special type of securities lending whereby the stock of a borrower
is hedged by the lender against loss, using options or other hedging strategies to reduce
lender risk.[citation needed]
A pre-settlement loan is a non-recourse debt, this is when a monetary loan is given based
on the merit and awardable amount in a lawsuit case. Only certain types of lawsuit cases
are eligible for a pre-settlement loan.[citation needed] This is considered a secured non-recourse
debt due to the fact if the case reaches a verdict in favor of the defendant the loan is
forgiven.
UNSECURED
Unsecured loans are monetary loans that are not secured against the borrower's assets.
These may be available from financial institutions under many different guises or
marketing packages:
 credit card debt

 personal loans
 bank overdrafts
 credit facilities or lines of credit
 corporate bonds
The interest rates applicable to these different forms may vary depending on the lender
and the borrower. These may or may not be regulated by law. In the United Kingdom,
when applied to individuals, these may come under the Consumer Credit Act 1974.
ABUSES IN LENDING
Predatory lending is one form of abuse in the granting of loans. It usually involves
granting a loan in order to put the borrower in a position that one can gain advantage over
him or her. Where the moneylender is not authorised, it could be considered a loan shark.
Usury is a different form of abuse, where the lender charges excessive interest. In
different time periods and cultures the acceptable interest rate has varied, from no interest
at all to unlimited interest rates. Credit card companies in some countries have been
accused by consumer organizations of lending at usurious interest rates and making
money out of frivolous "extra charges". Abuses can also take place in the form of the
customer abusing the lender by not repaying the loan or with an intent to defraud the
lender.
UNITED STATES TAXES
Most of the basic rules governing how loans are handled for tax purposes in the United
States are uncodified by both Congress (the Internal Revenue Code) and the Treasury
Department (Treasury Regulations — another set of rules that interpret the Internal
Revenue Code).[2] Yet such rules are universally accepted.
1. A loan is not gross income to the borrower: Since the borrower has the
obligation to repay the loan, the borrower has no accession to wealth.
2. The lender may not deduct the amount of the loan: The rationale here is that
one asset (the cash) has been converted into a different asset (a promise of
repayment). Deductions are not typically available when an outlay serves to create
a new or different asset.
3. The amount paid to satisfy the loan obligation is not deductible by the
borrower.
4. Repayment of the loan is not gross income to the lender: In effect, the promise
of repayment is converted back to cash, with no accession to wealth by the lender.
5. Interest paid to the lender is included in the lender’s gross income: Interest
paid represents compensation for the use of the lender’s money or property and
thus represents profit or an accession to wealth to the lender. Interest income can
be attributed to lenders even if the lender doesn’t charge a minimum amount of
interest.
6. Interest paid to the lender may be deductible by the borrower: In general,

interest paid in connection with the borrower’s business activity is deductible,
while interest paid on personal loans are not deductible. The major exception here
is interest paid on a home mortgage.
INCOME FROM DISCHARGE OF INDEBTEDNESS
Although a loan does not start out as income to the borrower, it becomes income
to the borrower if the borrower is discharged of indebtedness. Thus, if a debt is
discharged, then the borrower essentially has received income equal to the amount of the
indebtedness. The Internal Revenue Code lists “Income from Discharge of Indebtedness”
in Section 62(a) (12) as a source of gross income.
Example: X owes Y $50,000. If Y discharges the indebtedness, then X no longer owes Y

$50,000. For purposes of calculating income, this should be treated the same way as if Y
gave X $50,000.
For a more detailed description of the “discharge of indebtedness”, look at Section 108
(Cancellation of Debt (COD) Income) of the Internal Revenue Code.
CHAPTER: II
RESERCH DESIGN
2.1 STATEMENT OF THE PROBLEM
A Study on “Loans and Advances of State Bank of India in

Bangalroe”. It is important to know the evolution of the workplace to
understand as to why and how things are being done today. Hence the
purpose of the study is to examine the customer satisfaction towards loans
and advances.
2.2 OBJECTIVE OF THE STUDY:
 To study the regulations to be followed by banks providing the loans

and advances in investing their funds in State Bank of India.
 To examine investment of funds through loans and advances from
customer perception.
 To study advances made by banks.
 To evaluate operational performance of loans and advances from
investors performance.
2.3 SCOPE OF STUDY:

Study of SBI loans and advances compared to other
nationalized/MNC banks like Citibank, ICICI, HDFC, ABN Amro. The area
of study is in Bangalore.
2.4 SAMPLING:
The present study aims to identify the sample units from these studies.
Judgemental and purposive sampling will be used to pick the sample
respondent units and respondents therein. The study proposes to have 50
sample sizes.
2.5 METHODOLOGY:
The present study covers the descriptive analysis. To elicit the

primary data of the proposed study, questionnaires with structured and
unstructured basis.
This data collected from the bank as well as the personal interviewing of
respondents which is being analyzed to draw appropriate conclusion.
2.6 SOURCES OF DATA:
In this study primary as well as secondary data is used. Primary

data is based on questionnaire basis. The secondary data is collected from
State Bank of India about its history, mission, and the financial performance.
The data also collected from the annual reports, circulars etc.
2.7 PLAN OF ANALYSIS:

The collected data will be with the help of analyzed through percentage,
table, graphs and chart basis.
2.8 LIMITATIONS:
 A more detailed study in to the subject is not being made due to the
lack of time.
 Certain financial details are not revealed by bank due to authenticity
of the bank.
 The outcome of the study depends entirely on the fairness of
information supplied by the respondents.
CHAPTER SCHEME:
After the analysis and report writing, the report has been presented in
the form of a project report with five chapters here as under:
Chapter 1: Introduction
Chapter 2: Design of the Study
Chapter 3: Profile of State Bank of India
Chapter 4: Data Analysis and Interpretations
Chapter 5: Summary of Findings, Suggestions & Conclusions
Bibliography
Appendices
CHAPTER: III
A PROFILE OF STATE BANK OF INDIA
3.1 STATE BANK OF INDIA – An Overview

State Bank of India is the nation's largest bank. Tracing its roots back
some 200 years to the British East India Company (and initially established
as the Bank of Calcutta in 1806), the bank operates more than 14,000
branches within India, where it also owns majority stakes in seven associate
banks. State Bank of India is among the top 20 banks like IDBI, HSBC,
ICICI, ABN AMRO, etc.
COMPANY HISTORY:
 Founded: in Calcutta, 1806 (as Bank of Calcutta)

 Incorporated: 1921 as the Imperial Bank of India
 Type: public
Offices of the Bank of Bengal
State Bank of India (SBI) is that country's largest commercial bank.

The Indian government maintains a stake of nearly 60 percent in SBI
through the central Reserve Bank of India. It also operates the world's
largest branch network, with more than 13,500 branch offices throughout
India, staffed by nearly 220,000 employees. SBI is also present worldwide,
with seven international subsidiaries in the United States, Canada, Nepal,
Bhutan, Nigeria, Mauritius, and the United Kingdom, and more than 50
branch offices in 30 countries. The important points of SBI are given in the
table 3.
TABLE 3.1
IMPORTANT POINTS OF STATE BANK OF INDIA
STATE BANK OF INDIA
Type Public (BSE, NSE:SBI) & (LSE: SBID)
Founded Calcutta, 1806 (as Bank of Calcutta)
Corporate Centre,
Madame Cama Road,
Headquarters Mumbai 400 021
India
Key people Chairman Om Prakash Bhatt
Banking
Insurance
Industry
Capital Markets and allied industries
Products Loans, Credit Cards, Savings, Investment vehicles, SBI Life (Insurance) etc.
USD 13.775 billion (2005)

Revenue
The nation banks on us
Slogan
3.2 PROFITABILITY:
Profit is the excess of total revenue over total cost during a specific
period of time. Profit is the tool used to measure the performance of any
Banks. Profit is a financial gain that means excess of returns on outlay. An
attempt is made on the analysis of Profitability of SBI for the study period.
The table 3.1 gives clear details about the Growth rate and Trend of Profit of
SBI.
TABLE: 3.2
GROWTH RATE AND TREND OF PROFIT OF SBI
(Amount in crores)
YEAR PROFIT (y) x TREND
2004 3681 -1.5 3831.2
2005 4305 -0.5 4099.4
2006 4407 0.5 4367.6
2007 4541 1.5 4635.8
TOTAL 16934
Source: RBI publications (www.rbi.org.in)
GROWTH RATE:
b=xy/x2
b=268.2
TREND: a=y/N
Y=a+bx a=4233.5
The table clearly explains the profitability growth rate of SBI, it is
positive i.e. 268.2. The proportionate trend of the profit of SBI is increasing
over the years. A profit of SBI over past 4 years shows increasing. The range
of trend is between 3831.2 and 4635.8 .The same information is given in the
figure 3.1
FIGURE 3.2
PROFIT VALUES AND THE TREND VALUES OF PROFIT OF SBI
5000
4500
4000
PROFIT (AMT IN CRORES)
3500
3000
2500
2000
1500
1000
500
0
2004 2005 2006 2007
YEAR
PROFIT TREND
The graph shows that the profit value and the trend of profit value are
increasing trend. It indicates the profit condition of SBI is satisfactory.
3.3 ADVANCES:
The primary function of banks is to provide advances at a reasonable

rate of interest. Principal amount available when a borrower draws from a
line of credit, takes a cash advance against a bank credit card, or disburses a
loan at specific periodic stages. Advances may be secured or unsecured.
State bank of India is the oldest bank and provides various advances to
needy ones that help in developing Indian economy. The table 3.2 gives
information about the growth rate and trend of advances of SBI.
TABLE 3.3
GROWTH RATE AND TREND OF ADVANCES OF SBI
(Amount in
crores)
YEAR ADVANCES(y) x TREND
2004 157934 -1.5 150216.3
2005 202374 -0.5 209979.6
2006 261801 0.5 269742.9
2007 337336 1.5 329506.2
TOTAL 959445
GROWTH RATE:
b=xy/x2
b=59763.3
TREND: a=y/N
Y=a+bx a=239861.25
The table clearly explains the positive growth rate of SBI in

Advances, i.e.59763.3. The proportionate trend of the advances of SBI is
also increasing over the years. The trend for the study period lies between
150216.3 and 329506.2. The same information is given in the figure 3.2
FIGURE 3.3
ADVANCES VALUES AND TREND OF ADVANCES OF SBI

400000
350000
300000
ADVANCES (AMT IN CRORES)
250000
200000
150000
100000
50000
0
2004 2005 2006 2007
YEAR
ADVANCES GROWTH & TREND RATE
The figure clearly indicates the value of advances and growth rate of
advances of SBI. Both the lines are increasing trend. It shows the bank
performance in advances is satisfactory.
3.4 DEPOSITS:
A deposit is an arrangement whereby an individual or organization
may place cash under the safekeeping of a financial institution. It is
understood that the bank may invest the cash and pay the depositor a
specified amount of interest and that the depositor can reclaim the full value
of the account according to the agreed upon procedures governing the
account. It also means anything stored or entrusted for safe keeping by
banks. The table 3.3 gives the information about the advances of SBI for the
study period.
TABLE: 3.4
GROWTH RATE AND TREND OF DEPOSITS OF SBI
(Amount in crores)
YEAR DEPOSITS (y) x TREND
2004 318619 -1.5 320752.9
2005 367048 -0.5 357123.3
2006 380046 0.5 393493.7
2007 435521 1.5 429864.1
TOTAL 1501234
GROWTH RATE:
b=xy/x2
b=36370.4
TREND: where a=y/N

Y=a+bx a=375308.5
The table clearly explains the positive growth rate of SBI,

i.e.36370.4. The proportionate trend of the deposits of SBI is also increasing
over the years. The trend for the study period lies between 320752.9 and
429864.1. The same information is given in the figure 3.3
FIGURE 3.4
DEPOSIT VALUES AND TREND OF DEPOSITS OF SBI
500000
450000
400000
DEPOSITS (AMOUNT IN CRORES)
350000
300000
250000
200000
150000
100000
50000
0
2004 2005 2006 2007
YEAR
DEEPOSITS GROWTH & TREND RATE
The figure clearly indicates the value of deposits and growth rate
of advances of SBI. The deposits of SBI over the past 4 years show a
positive trend. The growth and trend rate also shows a positive trend. It
shows the bank performance in advances is satisfactory.
Long an arm of the Indian government's infrastructure, agricultural,
and industrial development policies, SBI has been forced to revamp its
operations since competition was introduced into the country's commercial
banking system. As part of that effort, SBI has been rolling out its own
network of automated teller machines, as well as developing anytime-
anywhere banking services through Internet and other technologies. SBI also
has taken advantage of the deregulation of the Indian banking sector to enter
the bancassurance, assets management, and securities brokering sectors. In
addition, SBI has been working on reigning in its branch network, reducing
its payroll, and strengthening its loan portfolio. In 2003, SBI reported
revenue of $10.36 billion and total assets of $104.81 billion.
The establishment of the British colonial government in India brought
with it calls for the formation of a Western-style banking system, if only to
serve the needs and interests of the British imperial government and of the
European trading houses doing business there. The creation of a national
banking system began at the beginning of the 19th century.
The first component of what was later to become the State Bank of
India was created in 1806, in Calcutta. Called the Bank of Calcutta, it was
also the country's first joint stock company. Originally established to serve
the city's interests, the bank was granted a charter to serve all of Bengal in
1809, becoming the Bank of Bengal. The introduction of Western-style
banking instituted deposit savings accounts and, in some cases, investment
services. The Bank of Bengal also received the right to issue its own notes,
which became legal currency within the Bengali region. This right enabled
the bank to establish a solid financial foundation, building an interest-free
capital base.
The loss of the government-backed balances was soon compensated
by India's rapid economic development at the end of the 19th century. The
building of a national railroad network launched the country into a new era,
seeing the rise of cash-crop farming, a mining industry, and widespread
industrial development. The three presidency banks took active roles in
financing this development. The banks also extended their range of services
and operations, although for the time being were excluded from the foreign
exchange market.
By the beginning of the 20th century, India's banking industry boasted
a host of new arrivals, and particularly foreign banks authorized to exchange
currency. The growth of the banking sector, and the development of
indigenous banks, in turn created a need for a larger "bankers' bank." At the
same time, the Indian government had outgrown its colonial background and
now required a more centralized banking institution. These factors led to the
decision to merge the three presidency banks into a new, single and
centralized banking institution, the Imperial Bank of India.
In 1926, a government commission recommended the creation of a

true central bank. While some proposed converting the Imperial Bank into a
central banking organization for the country, the commission rejected this
idea and instead recommended that the Imperial Bank be transformed into a
purely commercial banking institution. The government took up the
commission's recommendations, drafting a new bill in 1927. Passage of the
new legislation did not occur until 1935, however, with the creation of the
Reserve Bank of India. That bank took over all central-banking functions.
The Imperial Bank then converted to full commercial status, which
accordingly allowed it to enter a number of banking areas, such as currency
exchange and trustee and estate management, from which it had previously
been restricted. Despite the loss of its role as a government banking office,
the Imperial Bank continued to provide banking services to the Reserve
Bank, particularly in areas where the Reserve Bank had not yet established
offices. At the same time, the Imperial Bank retained its position as a
bankers' bank.
In 1951, the new government launched its first Five Year Plan,
targeting in particular the development of the country's rural areas. The lack
of a banking infrastructure in these regions led the government to develop a
state-owned banking entity to fill the gap. As part of that process, the
Imperial Bank was nationalized and then integrated with other existing
government-owned banking components. The result was the creation of the
State Bank of India, or SBI, in 1955.
The new state-owned bank now controlled more than one-fourth of

India's total banking industry. That position was expanded at the end of the
decade, when new legislation was passed providing for the takeover by the
State Bank of eight regionally based, government-controlled banks. As such
the Banks of Bikaner, Jaipur, Indore, Mysore, Patiala, Hyderabad,
Saurashtra, and Travancore became subsidiaries of the State Bank.
Following the 1963 merger of the Bikaner and Jaipur banks, their seven
remaining subsidiaries were converted into associate banks.
In the early 1960s, the State Bank's network already contained nearly
500 branches and sub-offices, as well as the three original head offices
inherited from the presidency bank era. Yet the State Bank now began an era
of expansion, acting as a motor for India's industrial and agricultural
development that was to transform it into one of the world's largest financial
networks. Indeed, by the early 1990s, the State Bank counted nearly 15,000
branches and offices throughout India, giving it the world's single largest
branch network.
SBI played an extremely important role in developing India's rural

regions, providing the financing needed to modernize the country's
agricultural industry and develop new irrigation methods and cattle breeding
techniques, and backing the creation of dairy farming, as well as pork and
poultry industries. The bank also provided backing for the development of
the country's infrastructure, particularly on a local level, where it provided
credit coverage and development assistance to villages. The nationalization
of the banking sector itself, an event that occurred in 1969 under the
government led by Indira Gandhi, gave SBI new prominence as the country's
leading bank.
Even as it played a primary role in the Indian government's industrial

and agricultural development policies, SBI continued to develop its
commercial banking operations. In 1972, for example, the bank began
offering merchant banking services. By the mid-1980s, the bank's merchant
banking operations had grown sufficiently to support the creation of a
dedicated subsidiary, SBI Capital Markets, in 1986.
The following year, the company launched another subsidiary, SBI
Home Finance, in collaboration with the Housing Development Finance
Corporation. Then in the early 1990s, SBI added subsidiaries SBI Factors
and Commercial Services, and then launched institutional investor services.
SBI was allowed to dominate the Indian banking sector for more than
two decades. In the early 1990s, the Indian government kicked off a series of
reforms aimed at deregulating the banking and financial industries. SBI was
now forced to brace itself for the arrival of a new wave of competitors eager
to enter the fast-growing Indian economy's commercial banking sector. Yet
years as a government-run institution had left SBI bloated--the civil-servant
status of its employees had encouraged its payroll to swell to more than
230,000. The bureaucratic nature of the bank's management left little room
for personal initiative, nor incentive for controlling costs.
The bank also had been encouraged to increase its branch network,
with little concern for profitability. As former Chairman Dipankar Baku told
the Banker in the early 1990s: "In the aftermath of bank nationalization
everyone lost sight of the fact that banks had to be profitable. Banking was
more to do with social policy and perhaps that was relevant at the time. For
the last two decades the emphasis was on physical expansion."
SBI had long been present overseas, operating some 50 offices in 34
countries, including full-fledged subsidiaries in the United Kingdom, the
United States, and elsewhere. In 1995 the bank set up a new subsidiary, SBI
Commercial and International Bank Ltd., to back its corporate and
international banking services into the 1990s, SBI had yet to establish an
automated teller network; indeed, it had not even automated its information
systems. SBI responded by launching an ambitious technology drive, rolling
out its own ATM network, then teaming up with GE Capital to issue its own
credit card. In the early 2000s, the bank began cross-linking its banking
network with its ATM network and Internet and telephone access, rolling
out "anytime, anywhere" banking access. By 2002, the bank had succeeded
in networking its 3,000 most profitable branches.
State Bank of India has more than 50 offices in nearly 35 other

countries, including multiple locations in the US, Canada, and Nigeria. The
bank has other units devoted to capital markets, fund management, factoring
and commercial services, and brokerage services. The Reserve Bank of India
owns about 60% of State Bank of India. SBI provides various domestic,
international and NRI products and services, through its vast network in
India and overseas. With an asset base of $126 billion and its reach, it is a
regional banking behemoth.
The government nationalized the bank in 1955, with the Reserve Bank
of India taking a 60% ownership stake. In recent years the bank has focused
on three priorities, 1) reducing its huge staff through Golden handshake
schemes known as the Voluntary Retirement Scheme, which saw many of its
best and brightest defect to the private sector, 2) computerizing its
operations and 3) changing the attitude of its employees (through an
ambitious programme aptly named 'Parivartan' which means change) as a
large number of employees are very rude to customers.
There are seven other associate banks that fall under SBI. They all use
the "State Bank of" name followed by the regional headquarters' name.
These were originally banks belonging to princely states before the
government nationalized them in 1959. In tune with the first Five Year Plan,
emphasizing the development of rural India, the government integrated these
banks with the State Bank of India to expand its rural outreach. The State
Bank group refers to the seven associates and the parent bank. All the banks
use the same logo of a blue keyhole. Currently, the group is merging all the
associate banks into SBI, which will create a "mega bank", and one hopes,
streamline operations and unlock value.
State Bank of India is present in 32 countries, where it has 84 offices
serving the international needs of the bank's foreign customers, and in some
cases conducts retail operations. The focus of these offices is India-related
business. State Bank of India has often acted as guarantor to the Indian
Government, most notably during Chandra Shekhar's tenure as Prime
Minister of India. With more than 9400 branches and a further 4000+
associate bank branches, the SBI has extensive coverage. Following its arch-
rival ICICI Bank, State Bank of India has electronically networked most of
its metropolitan, urban and semi-urban branches under its Core Banking
System(CBS), with over 4500 branches being incorporated so far. The bank
has the largest ATM network in the country having more than 5600 ATMs .
The State Bank of India has had steady growth over its history, though the
Harshad Mehta scam in 1992 marred its image.
In recent years, the bank has sought to expand its overseas operations
by buying foreign banks. It is the only Indian bank to feature in the top 100
world banks in the Fortune Global 500 rating and various other rankings.
According to the Forbes 2000 listing it tops all Indian companies.
GROUP COMPANIES:
 SBI Capital Markets Ltd
 SBI Mutual Fund (A Trust)
 SBI Factors and Commercial Services Ltd
 SBI DFHI Ltd
 SBI Cards and Payment Services Pvt Ltd
 SBI Life Insurance Co. Ltd - Bancassurance (Life Insurance)
 SBI Funds Management Pvt Ltd
 SBI Canada
OFFICERS:
Managing Director and Group Executive (Corporate Banking): Tara

Shankar (T.S.) Bhattacharya
Deputy Managing Director and Chief Development Officer: Abhijit
Datta
Deputy Managing Director, Information Technology: Ashwini Kumar
Sharma
KEY DATES:
1806: The Bank of Calcutta is established as the first Western-type bank.

1809: The bank receives a charter from the imperial government and changes its
name to Bank of Bengal.
1840: A sister bank, Bank of Bombay, is formed.
1843: Another sister bank is formed: Bank of Madras, which, together with
Bank of Bengal and Bank of Bombay become known as the presidency banks,
which had the right to issue currency in their regions.
1861: The Presidency Banks Act takes away currency issuing privileges but
offers incentives to begin rapid expansion, and the three banks open nearly 50
branches among them by the mid-1870s.
1876: The creation of Central Treasuries ends the expansion phase of the
presidency banks.
1921: The presidency banks are merged to form a single entity, Imperial Bank of
India.
1955: The nationalization of Imperial Bank of India results in the formation of
the State Bank of India, which then becomes a primary factor behind the
country's industrial, agricultural, and rural development.
1969: The Indian government establishes a monopoly over the banking sector.
1972: SBI begins offering merchant banking services.
1986: SBI Capital Markets is created.
1995: SBI Commercial and International Bank Ltd. are launched as part of SBI's
stepped-up international banking operations.
1998: SBI launches credit cards in partnership with GE Capital.
2002: SBI networks 3,000 branches in a massive technology implementation.
2004: A networking effort reaches 4,000 branches.
TIMELINE
June 2, 1806: The Bank of Calcutta established.

January 2, 1809: This became the Bank of Bengal.
April 15, 1840: Bank of Bombay established.
July 1, 1843: Bank of Madras established.
1861: Paper Currency Act passed.
January 27, 1921: all three banks amalgamated to form Imperial Bank of
India.
July 1, 1955: State Bank of India formed; becomes the first Indian bank to
be nationalized.
1959: State Bank of India (Subsidiary Banks) Act passed, enabling the State
Bank of India to take over eight former State-associated banks as its
subsidiaries.
1980s When Bank of Cochin in Kerala faced a financial crisis, the
government merged it with State Bank of India.
June 29, 2007: The Government of India today acquired the entire Reserve
Bank of India (RBI) shareholding in State Bank of India (SBI), consisting of
over 314 million equity shares at a total amount of over 355 billion rupees
3.5 SBI & ITS ASSOCIATES – FOREIGN OFFICES
State Bank of India is having presence in 32 countries with 84 offices

serving the international needs of the bank's foreign customers, in addition to
conducting retail operations. The focus of these offices is India-related
business.
SBI have branches in these countries:
 Australia
 Bahrain
 Bangladesh
 Belgium
 Dubai
 France
 Germany
 Hong Kong
 Israel
 Japan
 People's Republic of China
 Republic of Maldives
 Singapore
 South Africa
 Sri Lanka
 Sultanate of Oman
 The Bahamas
 U.K.
 U.S.A
3.6 SUBSIDIARIES AND JOINT VENTURES

In addition to the foreign branches above, SBI have these wholly
owned subsidiaries and joint ventures:
 Nepal State Bank Limited
 SBI Mauritius
 Indian Ocean International Bank (Mauritius)
 SBI Canada
 SBI California
3.7 SBI & ITS ASSOCIATES –GROWTH
State Bank of India has often acted as guarantor to the Indian

Government, most notably during Chandra Shekhar's tenure as Prime
Minister of India. With more than 9400 branches and a further 4000+
associate bank branches, the SBI has extensive coverage. Following its arch-
rival ICICI Bank, State Bank of India has electronically networked most of
its metropolitan, urban and semi-urban branches under its Core Banking
System(CBS), with over 4500 branches being incorporated so far. The bank
has the largest ATM network in the country having more than 5600 ATMs.
The State Bank of India has had steady growth over its history, though the
Harshad Mehta scam in 1992 marred its image.
In recent years, the bank has sought to expand its overseas operations
by buying foreign banks. It is the only Indian bank to feature in the top 100
world banks in the Fortune Global 500 rating and various other rankings.
According to the Forbes 2000 listing it tops all Indian companies.
FORTUNE GLOBAL 500 RANKING – 2007
SBI debuted in the Fortune Global 500 at 498 in 2006. In 2007 it

moved up to 495. As per fortune 500-2007 following are the data for SBI in
$ million.
 Revenues 15,119.4.
 Profits 1,407.3.
 Assets 187,547.1.
 Stockholders' Equity 9,786.2
TABLE 3.5
YEAR WISE DETAILS ABOUT THE GENERAL PERFORMANCE
FACTORS OF SBI AND IT’S ASSOCIATES
General 2002- 2003- 2004- 2005- 2006- Growth Group Total

Performance Rate% Bank
Factors
03 04 05 06 07 Avg. Avg.
Branches
( in Numbers)
1. SBI 9088 9107 9185 9384 5.1 1807 725
2. SBBJ 818 824 833 840 9556 5.1 1807 725
3.SBH 911 920 943 958 860 6.4 1807 725
4.SBIN 443 451 456 455 969 2.7 1807 725
5.SBM 614 626 640 648 455 6.0 1807 725
6.SBP 742 747 754 763 651 6.0 1807 725
7.SBS 424 428 429 439 787 8.3 1807 725
8.SBT 682 679 681 703 459 5.1 1807 725
-------- -------- --------- -------- 717
TOTAL 13722 13782 - -- --------
===== ===== 13921 14190 14454
= ===== ===== =====
Employe
es
( in Numbers) 208998 20703 205515 19877 18538 -11.3 32028 1105
1. SBI 13209 9 12120 4 8 -11.0 32028 1
2. SBBJ 13378 13054 13107 12089 11752 -3.7 32028 1105
3.SBH 6530 13278 6454 13108 12880 -0.2 32028 1
4.SBIN 9743 6540 9564 6647 6517 -1.4 32028 1105
5.SBM 11654 9693 11595 9741 9604 -2.8 3 1
6.SBP
7.SBS 7406 11674 7325 11350 11329 -3.5 2028 1105
8.SBT 12005 7391 11828 7257 7148 -3.3 32028 1
--------- 12007 -------- 11642 11607 32028 1105
TOTAL 282923 -------- 277508 ------- -------- 1
===== 28067 ===== 27060 25622 1105
= 6 = 8 5 1
===== ===== ===== 1105
1
1105
1
Capital
(Rs.In crore)
1. SBI 17203 20231 24072 27644 31299 81.9 5368 2704
2. SBBJ 903 1149 1298 1406 1654 83.2 5368 2704
3.SBH 1251 1574 1765 2114 2541 103.1 5368 2704
4.SBIN 584 791 904 1018 1177 101.5 5368 2704
5.SBM 431 582 756 935 1141 164.7 5368 2704
6.SBP 1412 1731 2045 2235 2488 76.2 5368 2704
7.SBS 625 767 794 977 1043 66.9 5368 2704
8.SBT 723 925 1130 1332 1599 121.2 5368 2704
------ ------- -------- ------ ------
TOTAL 22742 27750 32764 37661 42942
===== ===== ===== ===== =====
Deposits
(Rs.in crore)
1. SBI 296123 31861 367048 38004 43552 47.1 79184 3327
2. SBBJ 13280 9 19038 6 1 114.5 79184 3
3.SBH 20599 16453 28930 21694 28480 101.5 79184 3327
4.SBIN 9217 25311 13807 34025 41503 116.7 79184 3
5.SBM 9013 10511 13585 16661 19976 144.3 79184 3327
6.SBP 17870 11273 26496 16369 22022 119.3 79184 3
7.SBS 9051 22473 12613 33778 39184 74.6 79184 3327
8.SBT 15926 10675 24133 13841 15805 94.6 79184 3
--------- 19721 --------- 25997 30984 3327
TOTAL -- -------- 505650 -------- -------- 3
391079 43503 ===== - - 3327
===== 6 = 54241 63347 3
= ===== 1 5 3327
===== ===== 3
3327
3
Advances
(Rs.in crore)
1. SBI 137758 15793 202374 26180 33733 144.9 60603 2444
2. SBBJ 6773 4 12036 1 6 203.1 60603 7
3.SBH 9663 8597 15600 15896 20526 190.9 60603 2444
4.SBIN 5183 11814 9041 20863 28109 196.2 60603 7
5.SBM 5261 6406 8781 11876 15351 213.0 60603 2444
6.SBP 10746 6307 15359 11754 16466 167.7 60603 7
7.SBS 4649 13086 6714 22180 28770 138.4 60603 2444
8.SBT 9171 5240 14848 8443 11081 170.3 60603 7
-------- 11132 --------- 18866 24786 2444
TOTAL 189204 -------- - -------- -------- 7
===== - 284753 - -- 2444
22051 ===== 37167 48242 7
6 = 9 5 2444
===== ===== ===== 7
= 2444
7

Table 1 shows total branches, employees, capital, deposits and
advances of SBI and its Associates through 2002-03 to 2006-07, and
provides the growth rate of above said items based on 2002-03 as base year.
Regarding the bank branches the bank SBS is secured highest growth
rate i.e. 8.3 per cent. The second highest percent of the growth rate (6.4%) is
achieved by SBH. The SBM and SBP are secured 6 per cent of growth rate.
SBIN’s growth rate per cent is 2.7.
In the continuation of the analysis, the SBI group average is 1807 in
numbers; in this point of view SBI alone achieved the group average. In the
comparison of total bank average SBI, SBBJ, SBH, SBP are more than the
average in all years. SBIN, SBM, SBS, SBT are less than the total bank
average.
The number of employees is the second factor to determine the
general performance of the banks. Due to the introduction of technologies in
the banks, the banks are tried to reduce the number of employees. If the bank
reduces the numbers is a good pointer of growth. SBI reduce their
employees every year. In this regard all the banks under SBI and Associates
are reducing the number of employees every year; the rate of dwindle is 11.3
per cent.
The capital and Reserves and surplus are taken as a factor for
analyzing the general performance of the banks. Under this analysis all the
banks are increased its capital every year. The growth rate of capital for all
banks are exceeds 50 per cent, specially, SBT’s growth per cent is 121.2
.The banks are compared with group average and total bank average, in this
outlook SBI alone achieved the level.
The deposit constitutes the main source of funds for banks. The banks
receive deposits from the public on various accounts. Under this comparison
all banks are having positive growth percentage. SBM’s growth percent is
144.3 per cent. Lending of funds constitutes the main business of
commercial banks. The major portion of the funds of SBI and its Associates
is employed by way of advances, as advances from the chief source of
profits or banks. Regarding the advances all the banks are in positive
growth, everyone achieved more than 100 per cent growth rate.
3.8 IT INITIATIVES OF SBI

According to PM Network (December 2006, Vol. 20, No. 12), State
Bank of India launched a project in 2002 to network more than 14,000
domestic and 70 foreign offices and branches. The first and the second
phases of the project have already been completed and the third phase is still
in progress. As of December 2006, over 10,000 branches have been covered.
The new infrastructure serves as the bank's backbone, carrying all
applications, such as the IP telephone network, ATM network, Internet
banking and internal e-mail. The new infrastructure has enabled the bank to
further grow its ATM network with plans to add another 3,000 by the end of
2007 raising the total number to 8,600. As of September 20, 2007 SBI has
7236 ATM's
3.9 PRINCIPAL COMPETITORS OF SBI
 ICICI Bank;
 Bank of Baroda;
 Canara Bank;
 Punjab National Bank;
 Bank of India;
 Union Bank of India;
 Central Bank of India;
 HDFC Bank;
 Oriental Bank of Commerce
3.10 REVIEW OF LITERATURE OF LOANS AND ADVANCES
PERSONAL LOAN SCHEME:
Purpose General purpose

State or Central government employees, PSUs, and
Eligibility individuals with minimum NMI of Rs.3000/- p.m. and check
off facility.
Minimum: Rs.24000/-
Amount of
Maximum: Rs.3 lakhs
finance
18 months NMI after all deductions
Security none
Repayment 72 months EMI
Processing
1% of the loan amount
charges
PRODUCT HIGHLIGHTS:
 The scheme provides finance for any personal need or requirement.

The total amount being determined on the basis of repaying capacity
of the applicant.
 Lowest interest rates in the industry.
 Interest charged on daily reducing balance (which in essence lowers

the effective rate of interest).
 Low processing charges.
 No margin.
 No security required-which minimal documentation.
 Long repayment period up to 48 months.
 No repayment penalties. Interest burden can be reduced by optimally

utilizing surplus funds for repaying the loan.
 Total transparency with regard to rate of interest and fees charged-no

hidden costs.
 The scheme is liberal, broad based, customer oriented and

competitive.
 The products help the customer to confidently face the challenge of

meeting any kind of personal expenses.
 With the withdrawal of big buy scheme loans can be granted for
purchase of consumer durables under personal loan scheme.
 With the withdrawal of the scheme of loans to individuals for purpose

of home computers, loans for purchase of computers can be given
under this scheme.
 Personal loans can be marketed to customers eligible for under

Pravasi scheme.
CAR LOAN SCHEME:
Purpose Loans sanctioned for purchase of new passenger cars, jeeps,

Multi Utility Vehicles (MUVs) and SUVs.
1. Permanent employees of State/Central Government, Public
Sector Undertakings, Corporations, Private Sector
Companies and reputed establishments in the age group of
21-65 years drawing Net Annual Income of Rs.75000/- and
above.
2. Professionals, self-employed and others who are Income

Eligibility Tax assesses drawing Net Annual Income of Rs.75000/- and
above for the last year as per Income Tax return in the age
group of 21-65 years.
3. Persons engaged in Agriculture and allied activities drawing

Net Annual Income of Rs.75000/- and above in the age
group of 21-65 years. Income Tax return will not be
required.
There is no ceiling in Loan Amount but restricted to 36 times
Amount of Net Monthly Income, net of all deductions including actual
finance monthly TDS for salaried persons & 3 times Net Annual
Income for others
a. For Loans up to Rs.6 lakhs: 15%
Margin
b. For Loans above Rs.6 lakhs: 30%
7 years with an option for repayment in a shorter duration,
preferably with a check off facility in case of salaried persons.
Repayment
Post-dated cheques should be obtained where check off facility
is not obtained.
Hypothecation of vehicle & Guarantee of spouse, if his/her
income has been taken in to account for computing eligibility
of loan amount. (OR)
Security in the form of surrender value of LIC policy, NSCs,

Security
units of UTI, Deposits with our Bank, SBI Magnums, gold or
any other security normally acceptable to the Bank for grant of
advance, to cover at least 35% of the loan amount. (OR)
Third Party Guarantee good for the loan amount

Processing
Nil
charges
Insurance Comprehensively insured for the market value
SBI CAR LOAN SCHEME FOR OLD VEHICLES
Loans sanctioned for purchase of passenger cars, jeeps, Multi

Utility Vehicles (MUVs) and SUVs not more than 5 years old.
Purpose
However, financing of old vehicles on the basis of duplicate
registration books will not be entertained.
1. Permanent employees of State/Central Government, Public
Sector Undertakings, Corporations, Private Sector
Companies and reputed establishments in the age group of
21-65 years drawing Net Annual Income of Rs.75000/- and
above
2. Professionals, self-employed and others who are Income
Eligibility Tax assesses drawing Net Annual Income of Rs.75000/- and
above for the last year as per Income Tax return in the age
group of 21-65 years
3. Persons engaged in Agriculture and allied activities drawing
Net Annual Income of Rs.75000/- and above in the age
group of 21-65 years. Income Tax return will not be
required.
36 times Net Monthly Income, net of all deductions including
Amount of
actual monthly TDS for salaried persons & 3 times Net Annual
finance
Income for others subject to maximum of Rs.15 lakhs.
a. For Loans up to Rs.6 lakhs: 15%
Margin
b. For Loans above Rs.6 lakhs: 30%
Certificate of fitness/valuation from a reputed garage would be
Valuation required. No valuation certificate is required if the car is sold
under the Maruti True Value scheme or Automartindia.
Repayment 7 years with an option for repayment in a shorter duration,
preferably with a check off facility in case of salaried persons.
Post-dated cheques should be obtained where check off facility
is not obtained.
Hypothecation of vehicle & Guarantee of spouse, if his/her
income has been taken in to account for computing eligibility
of loan amount. (OR)
Security in the form of surrender value of LIC policy, NSCs,
Security
units of UTI, Deposits with our Bank, SBI Magnums, gold or
any other security normally acceptable to the Bank for grant of
advance, to cover at least 35% of the loan amount. (OR)
Third Party Guarantee good for the loan amount
Processing
Nil
charges
Insurance Comprehensively insured for the market value
PRODUCT HIGHLIGHTS:
 Low interest rates.
 Interest is levied on daily reducing balance. As such interest need not

be paid on amounts already repaid during the month/year.
 No processing charges.
 Easy repayment options.
a. Short term car loans with lower rates of interest to suit high net
worth individuals.
b. Loans with longer repayment periods up to 84 months.
 On road cost and not Ex-Showroom, i.e., finance to include vehicle

registration charges, insurance premium and one time road tax.
 No hidden cost or administration charges.
 No advance EMI’s.
 Benefit of subvention amount is passed on to the credit of the
borrowers account, thereby, reducing the effective rates of interest.
 No prepayment penalties. Should the borrowers have surplus funds at

any time, he can conveniently reduce his loan liability and interest
burden without attracting any penalty.
 Complete transparency
 Reimbursement loan for cars which are not more than two years old.
 Free personal accident insurance cover up to the outstanding amount

so that the legal heirs are not required to repay the loan.
EDUCATIONAL LOAN SCHEME:
Financial assistance to deserving/meritorious students for

Purpose
pursuing higher studies in India or abroad.
Students seeking loan should be of Indian nationals.
Eligibility Computer courses conducted by NIIT are also included under Education
Loans
For studies in India: Maximum Rs.7.50 lakhs

Amount of
finance
For studies abroad: Maximum Rs.15.00 lakhs
Upto Rs. 4.00 lakhs: Nil
Margin
Above Rs. 4.00 lakhs:
money
For studies in India – 5%
For studies abroad – 15%
Upto Rs. 4.00 lakhs: No Security
Security Above Rs. 4.00 lakhs and upto 7.5 lakhs:Collateral in the form
Norms of satisfactory 3 rd party guarantee.
Above Rs. 7.5 lakhs and upto 15.00 lakhs:Collateral security

equal to 100% of the loan amount or guarantee of 3 rd person
known to bank good for 100% of the loan amount.
Upto Rs.4.00 Lacs – 11.50%
Rate Of
Interest Above R.s4.00 Lacs – 13.00%
Penal rate @2% on all irregular Education loans above Rs.4.00 Lacs for
of Interest the over due amount and over due period.
Repayment
5 to 7 years after completion of course.
Period
Processing Charges of Rs.5000/- for Education Loans above
Processing
Rs.4.00 Lakhs for students going abroad (studies abroad).
Charges
Insurance of SBI Life Insurance Co. Ltd. Is available
PRODUCT HIGHLIGHTS:
 No Processing fee
 Low margin
 Low Interest rates.
 Simple Interest during moratorium period.
 Concession in interest rate during moratorium for servicing of

interest.
 No prepayment of penalties.
 No hidden cost or administrative charges.
 The loan amount is based on a repayment of potential of the

student in future and not necessarily on the present financial
condition.
 The scheme enables poor parents to invest in education of their

children who will later be able to repay the loan.
4.1 SHOWING THE AGE GROUP OF THE RESPONDENTS
NO.OF
AGE RESPONDENTS PERCENTAGE
25-30 Years 18 18%
30-35 Years 20 20%
35-40 Years 22 22%
40-45 Years 18 18%
45-50 Years 14 14%
51-60 Years 8 8%
CHART: 4.1
SHOWING THE AGE GROUP OF THE RESPONDENTS
NO.OF RESPONDENTS
8%
18%
14% 25-30 Years

30-35 Years
35-40 Years
20% 40-45 Years

18% 45-50 Years
51-60 Years
22%
INTERPRETATION:
Out of 100 respondents, 18(18%) respondents fall under 25-30 years, 20(20%) under 30-
35 years, 22(22%) under 35-40 years, 18(18%) respondents under 40-45 years, 14(14%)
respondents under 45-50 years, and 8(8%) under 50-60 years.
4.2 SHOWING THE OCCUPATION OF THE RESPONDENTS
NO.OF
Sl No AGE RESPONDENTS PERCENTAGE
1 Business 19 19%
2 Employees 40 40%
3 Students 15 15%
4 Others 26 26%
Total 100 100%
CHART: 4.2
SHOWING THE OCCUPATION OF THE RESPONDENTS
NO.OF RESPONDANTS
19%
26%
Business
Employees
Students
Others
15%
40%
INTREPRETATION:
The above Table and chart shows that out of 100 respondents 19% 0f them
are business people, 40% of them are employees, 15% of them are Students,
26% of them belong to other category.
TABLE: 4.3
SHOWING THE MONTHLY INCOME OF THE RESPONDENTS
SL
NO Monthly Income NO.OF RESPONDENTS PERCENTAGE
1 10,000 - 20,000 40% 40%
2 20,000-30,000 25% 25%
3 >30,000 5% 5%
4 <10,000 30% 30%
Total 100% 100%
CHART: 4.3
NO.OF RESPONDANTS
30%
40% 1 10,000 - 20,000
2 20,000-30,000
3 >30,000
5% 4 <10,000
25%
INTREPRETATION:
The above table and chart shows that out of 100 respondents 40% of the respondents
have a monthly income of 10,000 – 20,000, 25% of the respondents have a monthly
income of 20,000 to 30,000, 5% of the respondents have a monthly income of more than
30,000, 30% of the respondents have a monthly income of less than 10,000.
TABLE: 4.4
SHOWING THE TYPE OF LOAN TAKEN OF THE RESPONDENTS
NO OF
SL NO Type of Loan RESPONDENTS PERCENTAGE
1 Personal Loan 40 40%
2 Car Loan 40 40%
3 Housing Loan 5 5%
4 Education Loan 0 0%
5 Other Type of Loans 15 15%
Total 100 100%
CHART: 4.4
SHOWING THE TYPE OF LOAN TAKEN OF THE RESPONDENTS
INTERPRETATION:
The above table and graph shows that the 40% of the respondents have taken personal
loan, 40% 0f the respondents have taken Car Loans, 5% of respondents have taken
Housing Loans, and 15% of the respondents have taken other type of loans.
TABLE: 4.5
SHOWING THE BANK FROM WHICH THE RESPONDENTS HAVE OBTAINED

THE LOAN
NO OF
SL NO Banks RESPONDENTS PERCENTAGE
1 SBI 70 70%
2 Citibank 2 2%
3 ICICI 10 10%
4 IDBI 3 3%
5 ABN Amro 7 7%
6 HDFC 8 8%
Total 100 100%
CHART: 4.5
SHOWING THE BANK FROM WHICH THE RESPONDENTS HAVE
OBTAINED THE LOAN
NO OF RESPONDENTS
8%
7%
1 SBI
3%
2 Citibank
10% 3 ICICI
4 IDBI
2%
5 ABN Amro
70%
6 HDFC
INTERPRETATION:
The above table and chart shows that out of 100 respondents 70% of the respondents
have obtained loan from SBI, 2% fro Citibank, 10% from ICICI, 3% from IDBI, 7% from
ABN Amro and 8% from HDFC bank.
TABLE: 4.6
SHOWING THE RESPONDENTS PERCTION TOWARDS THE INTEREST

RATES OF SBI
SL NO OPTIONS NO OF RESPONDENTS PERCENTAGE

1 High 35 35%
2 Average 50 50%
3 Low 15 15%
Total 100 100%
CHART: 4.6
SHOWING THE RESPONDENTS PERSEPTION TOWARDS THE INTEREST

RATES OF SBI
NO OF RESPONDENTS
15%
35%
1 High
2 Average
3 Low
50%
INTERPRETATION:
The above table and chart shows that out of 100 respondents 35% of the respondent’s
perception towards the interest rates is high, while 50% of the respondents say that the
interest rates of SBI is average, while 15% of the respondents say that the interest rates of
SBI is low.
TABLE: 4.7
SHOWING THE RESPONDENTS PERSEPTION TOWARDS THE

DOCUMENTATION FORMALITIES OF SBI WITH OTHER
BANKS.
NO OF
SL NO OPTIONS RESPONDENTS PERCENTAGE
1 Very easy compared to other banks 8 8%
2 Easy compare to other banks 29 29%
3 Same as compared to other banks 51 51%
4 Longer than other banks 12 12%
Total 100 100%
CHART: 4.7

DOCUMENTATION FORMALITIES OF SBI WITH OTHER
BANKS.
NO OF RESPONDENTS
12% 8%
1 Very easy compared to
other banks
2 Easy compare to other
29% banks
3 Same as compared to other
banks
4 Longer than other banks
51%
INTERPRETATION:
The above table and chart shows out of 100 respondents 8% of the respondents say that
the documentation formalities of SBI is very easy when compared to other banks while
29% of the respondents say that it is easy compared to other banks, while 51% of the
respondents say that it is same as compared with other banks and 13% of the respondents
say that it is longer than other banks.
TABLE: 4.8
ACCESSIBILITY TO SBI LOANS COMPARED TO OTHER BANKS.
NO OF
1 Easily Accessible 55 55%
2 Accessible 40 40%
3 Very Difficult to access 5 5%
Total 100 100%
CHART: 4.8

ACCESSIBILITY TO SBI LOANS COMPARED TO OTHER BANKS.
NO OF RESPONDENTS
Very Difficult to
access
3
5%
Accessible 1 Easily Accessible

Easily Accessible
2 2 Accessible
1
40% 3 Very Difficult to access
55%
INTERPRETATION:
The above table and chart shows that out of 100 respondents 55% of the respondents say
that the loans are easily accessible while 40% of the respondents say that the loans are
accessible and 5% of the respondents say that the loans are very difficult to access.
TABLE: 4.9

PROCESSING TIME OF SBI LOANS COMPARED TO OTHER BANKS.
NO OF
1 Higher processing time 55 55%
2 Moderate processing time 30 30%
3 Too slow 15 15%
Total 100 100%
CHART: 4.9

PROCESSING TIME OF SBI LOANS COMPARED TO OTHER BANKS.
NO OF RESPONDENTS
15%
1 Higher processing time

2 Moderate processing time
55%
3 Too slow
30%
INTERPRETATION:
The above table and chart shows that out of 100 respondents, 55% of the respondents say
that SBI has got a higher processing time while 30% say that it has got a moderate
processing time while 15% of the respondents say that it is too slow.
TABLE: 4.10
SHOWING THE RESPONDENTS PERSEPTION TOWARDS THE CUSTOMER

SERVICE OF SBI LOANS COMPARED TO OTHER BANKS.
NO OF
1 Excellent 17 17%
2 Very good 15 15%
3 Good 35 35%
4 Average 28 28%
5 Poor 5 5%
Total 100 100%
CHART: 4.10
SHOWING THE RESPONDENTS PERSEPTION TOWARDS THE CUSTOMER

SERVICE OF SBI LOANS COMPARED TO OTHER BANKS.
NO OF RESPONDENTS
Poor Excellent
5 1
5% 17%
Average 1 Excellent
4 2 Very good
Very good
28%
2 3 Good
15% 4 Average
5 Poor
Good
3
35%
INTERPRETATION:
that customer services offered by SBI was excellent, while 15% of the respondents say
that it was very good, while 35% of the respondents say that it was good, 28% of the
respondents say that it was average and 5% of the respondents say that it was poor.
TABLE: 4.11
SHOWING THE RESPONDENTS PERSEPTION TOWARDS THE LOAN

PROCESSING FEE AND DOCUMENTATION FEE OF SBI LOANS
COMPARED TO OTHER BANKS
NO OF
1 Less than other banks 38 38%
2 Equal to other banks 45 45%
3 More than other banks 17 17%
Total 100 100%
CHART: 4.11
SHOWING THE RESPONDENTS PERSEPTION TOWARDS THE LOAN

PROCESSING FEE AND DOCUMENTATION FEE OF SBI LOANS
COMPARED TO OTHER BANKS
NO OF RESPONDENTS
More than other

banks
3 Less than other
17% banks
1 1 Less than other banks
38% 2 Equal to other banks
3 More than other banks
Equal to other
banks
2
45%
INTERPRETATION:
that the processing and documentation fee of SBI is less than other banks, while 45% of
the respondents say that it is equal to other banks and 17% of the respondents say that it
is more than other banks.
TABLE: 4.12
SHOWING THE RESPONDENTS PERCEPTION TOWARDS THE VARIETY

OF FINANCIAL PRODUCTS OF SBI.
NO OF
1 Very Good 33 33%
2 Good 48 48%
3 Average 10 10%
4 Poor 9 9%
Total 100 100%
CHART: 4.12
SHOWING THE RESPONDENTS PERCEPTION TOWARDS THE VARIETY

OF FINANCIAL PRODUCTS OF SBI.
NO OF RESPONDENTS
Poor
Average 4
3 9% Very Good
10% 1
33% 1 Very Good
2 Good
3 Average
4 Poor
Good
2
48%
INTERPRETATION:
The above study shows that out of 100 respondents, 33% of the respondents say that
variety of financial products of SBI is very good, while 48% of the respondents say that it
is good and 10% of the respondents say that it is Average, while 9% of the respondents
say that it is poor.
ANALYSIS OF EDUCATION LOAN:
TABLE: 4.13
NO OF
SL NO AGE RESPONDENTS PERCENTAGE
1 25-30 Years 12 24%
2 31-35 Years 3 6%
3 36-40 Years 6 12%
4 41-45 Years 5 10%
5 46-50 Years 7 14%
6 51-60 Years 17 34%
CHART: 4.13

NO OF RESPONDENTS
24%
1 25-30 Years
34%
2 31-35 Years
3 36-40 Years
6% 4 41-45 Years
5 46-50 Years
12% 6 51-60 Years
14%
10%
INTERPRETION
The above Table and Chart shows that out of 50 respondents,12(24%) of the
respondents fall under 25-30 years, 3(6%) under 31-35 years, 6(12%) under
36-40 years,5(10%)respondents under 41-45 years and 7(14%) respondents
under 46-50 years 17(34%) respondents under 51-60 years.
TABLE: 4.14
NO OF
SL NO AGE RESPONDENTS PERCENTAGE
1 Business 8 48%
2 Employees 24 16%
3 Students 10 20%
4 Others 8 16%
TOTAL 50 100%
CHART: 4.14

NO OF RESPONDENTS
Others Business
4 1
16% 16%
1 Business
Students 2 Employees
3 3 Students
20%
4 Others
Employees
2
48%
INTERPRETATION
The above Table and Chart shows that out of 50 respondents,16% of respondents are
business people while 48% of the respondents are employees while 20% of respondents
are students and 16% of respondents belongs to other category.
TABLE: 4.15
NO OF
SL NO MONTHLY INCOME RESPONDENTS PERCENTAGE
1 10,000-20,000 RS 10 20%
2 20,000-30,000 RS 13 26%
3 MORE THAN 40,000 16 32%
4 LESS THAN 10,000 11 22%
TOTAL 50 100%
CHART:4.15

NO OF RESPONDENTS
LESS THAN 10,000 10,000-20,000 RS

4 1
22% 20%
1 10,000-20,000 RS
2 20,000-30,000 RS
3 MORE THAN 40,000
20,000-30,000 RS
MORE THAN 2 4 LESS THAN 10,000
40,000 26%
3
32%
INTERPRETATION
The above Table and Chart shows that out 50 respondents 20 %of the respondents have a
monthly income of 10,000 –20,000 RS , 26% of the respondents have a income of
20,000-30,000RS ,32% of the respondents have a monthly income of more than
40,000RS ,22% of the respondents have a monthly income of less than 10,000Rs.
TABLE: 4.16
SHOWING THE TYPE OF LOAN TAKEN BY THE RESPONDENTS
NO OF
SL NO LOAN TAKEN RESPONDENTS PERCENTAGE
1 PERSONAL LOAN 0 0%
2 CAR LOAN 0 0%
3 HOUSING LOAN 5 10%
4 EDUCATION LOAN 40 80%
5 OTHER TYPE OF LOAN 5 10%
TOTAL 50 100%
CHART: 4.16
SHOWING THE TYPE OF LOAN TAKEN BY THE RESPONDENTS
INTERPRETATION
The above table and chart shows that 0% of the respondents have taken
personal loan and car loan ,while 10% of respondents have taken housing
loan and other types of loan, while 80 % of respondents have taken
education loan and other type of loans 10%
TABLE: 4.17
SHOWING THE BANK FROM WHICH RESPONDENTS

OBTAINED THE LOAN
NO OF
SL NO BANKS RESPONDENTS PERCENTAGE
1 Allahabad bank 5 10%
2 Vijaya bank 10 20%
3 IDBI 7 14%
4 Dena bank 8 16%
5 HDFC 0 0%
6 SBI 20 40%
TOTAL 50 100%
CHART: 4.17
NO OF RESPONDENTS
10%
1 Allahabad bank
40% 20% 2 Vijaya bank
3 IDBI
4 Dena bank
5 HDFC
6 SBH
14%
0%
16%
INTERPRETATION
The above table and chart shows that out of 50 respondents 10% of
respondents have obtained loan from Allahabad bank, 20% from Vijaya
bank, 14% from IDBI, 16% from Dena bank,0% from HDFC, and 40% from
SBI bank.
TABLE: 4.18
SHOWING THE RESPONDENTS PERCEPTION TOWARDS THE

INTEREST RATE OF SBI
NO OF
1 HIGH 15 30%
2 AVERAGE 20 40%
3 LOW 15 30%
4 TOTAL 50 100%
CHART: 4.18

INTEREST RATE OF SBI
NO OF RESPONDENTS
LOW HIGH
3 1
30% 30%
1 HIGH
2 AVERAGE
3 LOW
AVERAGE
2
40%
INTERPRETATION
The above and chart shows that out of 50 respondents 30% of respondents perception
towards the interest rates is High, while 40% of the respondents say interest rates of SBI
is average, while 30% of the respondents say that the interest rate of SBI is low.
TABLE: 4.19

DOCUMENTATION FORMALITIES OF SBI WITH OTHER BANKS
NO OF
1 Very easy compared to other banks 8 16%
2 Easy compared to other banks 10 20%
3 Same as compared to other banks 25 50%
4 Longer than other banks 7 14%
TOTAL 50 100%
CHART: 4.19

DOCUMENTATION FORMALITIES OF SBI WITH OTHER BANKS
NO OF RESPONDENTS
14% 16%
1 Very easy compared to other
banks
2 Easy compared to other banks
20% 3 Same as compared to other banks
4 Longer than other banks

50%
INTERPRETATION
The above Table and Chart shows out of 50 respondents 16% of the respondents say that
the documentation formalities of SBI is very easy compared to other banks while 20%of
the respondents say that it is easy when compared to other banks while 50% of the
respondents say that it is same as compared to other banks and 14% of the respondents
say that it is longer than other banks.
TABLE: 4.20

ACCESIBILITY TO SBI LOANS COMPARED TO OTHER BANKS.
SL NO OPTIONS NO OF PERCENTAGE
RESPONDENTS
1 Easily acesible 15 30%
2 Accessible 26 52%
3 Very difficult to access 9 18%
TOTAL 50 100%
CHART: 4.20

ACCESIBILITY TO SBI LOANS COMPARED TO OTHER BANKS.
NO OF RESPONDENTS
18%
30%
1 Easily acesible
2 Accessible
3 Very difficult to access
52%
INTERPRETATION
The above table and chart shows that out of 50 respondents, 30% of the
respondents say that loans are easily accessible while 52%of the
respondents say that the loans are accessible and 18%of the respondents say
that the loans are very difficult to access.
TABLE: 4.21

PROCESSING TIME OF SBI LOAN WHEN COMPARED TO
OTHER BANKS
NO OF
1 Higher processing time 15 30%
2 Moderate processing time 24 48%
3 Too slow 11 22%
TOTAL 50 100%
CHART: 4.22

PROCESSING TIME OF SBI LOAN WHEN COMPARED TO
OTHER BANKS
NO OF RESPONDENTS
22%
30%
1 Higher processing time

2 Moderate processing time
3 Too slow
48%
INTERPRETATION
that SBI has got a higher processing time while 48% say that it hs got a moderate
processing time while 22%of the respondents say that it is too slow.
TABLE: 4.23

CUSTOMER SERVICES OF SBI COMPARED TO OTHER BANKS.
NO OF
1 Excellent 9 18%
2 Very good 8 16%
3 Good 19 38%
4 Average 10 20%
5 Poor 4 8%
TOTAL 50 100%
CHART: 4.23
SHOWING THE RESPONDENTS PERCEPTION TOWARDS THE CUSTOMER
SERVICES OF SBI COMPARED TO OTHER BANKS
NO OF RESPONDENTS
8%
18%
20% 1 Excellent
2 Very good
16% 3 Good
4 Average
5 Poor
38%
INTERPRETATION
that customer services offered by SBI is excellent while 16% of the respondents say that
it was very good while 38%of respondents say it was good, 20% of the respondents say it
was average and 8% of the respondents say it was poor
TABLE- 4.24

DOCUMENTATION AND LOAN PROCESSING FEES
NO OF
1 Less than other bank 19 38%
2 Equal to other bank 25 50%
3 More than other bank 6 12%
TOTAL 50 100%
CHART: 4.24

DOCUMENTATION AND LOAN PROCESSING FEES
NO OF RESPONDENTS
12%
38%
1 Lessthan other bank
2 Equal to other bank
3 More than other bank
50%
INTERPRETATION
The above Table and Chart shows that out of 50 respondents, 38% of the respondents say
that the processing fee, documentation fee of SBI is less than other banks, while 50% of
the respondents say that it is equal to other banks while 12% of the respondents say that it
is more than other banks.
TABLE: 4.25

VARIERY OF FINANCIAL PRODUCTS OF SBI.
NO OF
1 Very good 9 18%
2 Good 21 42%
3 Average 15 30%
4 Poor 5 10%
TOTAL 50 100%
CHART:4.25

VARIERY OF FINANCIAL PRODUCTS OF SBI.
NO OF RESPONDENTS
10% 18%
1 Very good
2 Good
30%
3 Average
4 Poor
42%
INTERPRETATION
The above study shows that out of 50 respondents, 18% of the respondents say that
variety of financial products of SBI is very good, while 42% of the respondents say that it
is good, while 30% of the respondents say that it is average and 10% of the respondents
say that it is poor.
FINDINGS
The study is carried out to know the customer’s satisfaction levels and
experiences of the SBI short-term loans. After finishing the analysis and observation of
the collected data the following findings were known:
 22% of the customers are under the age group of 35 – 40 Years.

 40% of the customers are employees.
 40% of the customers have an annual income of 10,000 – 20,000.
 50% of the respondent’s perception towards the interest rates of SBI is average.
 50% of the respondent’s perception towards the documentation formalities of SBI
is that it is same as compared to other banks.
 55% of the respondent’s perception towards the accessibility of the SBI loans was
that it was easily accessible.
 55% of the respondent’s perception towards the processing time of SBI loans was
that it took higher processing time.
 35% of the respondent’s perception towards the customer service of SBI was
good.
 45% of the respondent’s perception towards the processing fee, documentation
fee of SBI was that it was equal to other banks.
SUGGESTIONS
 SBI has to improve its interaction with its customers and has to make
it friendlier.
 SBI should provide much more customer service, should try and
reduce interest rates to make it’s products more competitive and also
give it’s customers an option of short term repayment period.
 SBI must try and introduce cash back policy on the processing
fee/documentation fee of the short-term loan.
 To speed up loan appraisal, embracement loan if asked from the
customer should be issued fast and interest charged on loans should be
less.
 To introduce cash back policy in shopping center.
 To charge low interest rates on the personal loans, car loans and also
on educational loans.
 Banks should improve the operational efficiency to improve the
processing speed of the loans and reduce the time to provide loans.
CONCLUSION
This project went through all the ways to compare the loans of State Bank of
India with that of other banks. It is satisfying thing to know that State Bank of India is
growing towards a “Service of Excellence”. All the achievements can be given a broader
sky view by applying and considering the findings and suggestions given in this project.
Efforts have been made to know all spectrum of possibilities through which State bank of
India can satisfy their customers more and understandingly. This is observation to let
State bank of India know what actually is hampering in terms of customer service and
satisfaction.
The availability of computerized software much of the technicalities

of the assessment have been largely simplified. The efforts by SBI
constantly update its evaluation procedures, indicate its high level of
professionalism and also explains why it is in a leading position amongst the
nationalized banks. The project can be had with management of borrowing
firms to get better idea about the business, its viability and also the capacity
of management to tackle exceptional situations. Project appraisal methods
try to reduce the subjectivity involved in assessing the capacity of the
Borrowers with respects to repayment capability.
BIBLIOGRAPHY
BOOKS REFERRED:
BOOKS:
 Vasanth Desai, “Banks and Institutional Management” First edition,
published by Himalaya Publishing House, Mumbai 2006.
 Frank J. Fabozzi, Franco Modigliani, Frank J. Jones, Micheal G. Ferri,
“Foundation Of Financial Markets and Institutions”, 3rd edition,
published by Pearson education.
 Meir kohn, “Financial Institution and Markets”, published by Tata Mc
Graw Hill publishing company limited.
BULLETIN:
 Annual reports of SBI
 Annual reports of RBI and IBA (Indian Banks Association) Bulletin.
WEBSITES:
 www.statebankof India.com
 www.sbbjbank.com
 www.mysorebank.com
 www.indorebank.org.com
 www.sbp.co.in
 www.sbsbank.com
 www.SBIyd.com
 www.indiaearnings.com
OTHERS:
 Articles.
 News Paper
Indian Panorama
QUESTIONNAIRE
Respected Sir/Madam,
I Pothgal Narasan gowda, final year M. B. A of AIMS Bangalore have undertaken a

project study as per the Bangalore University requirement. The topic of my study is
“Comparison of loans of SBI with other banks”. Kindly give me your feedback, which
will be immense benefit. Kindly Co-operate.
PART – A
1. Name: 2. Age:
3. Profession: 4. Phone Number:
5. Monthly Income:
[ ] 10,000 –20,000 [ ] 20,000 – 30,000 [ ] >30,000 [ ] <10,000
6. Have you taken loan in the past, if yes which type of loan?
[ ] Personal loan [ ] Education Loan [ ] Car Loan [ ] Home Loan[ ] Others
7. From which bank did u obtain the loan?
[ ] SBI [ ] Citibank [ ] IDBI [ ] ICICI [ ] ABN Amro

[ ] HDFC [ ] Standard Chartered Bank [ ] HSBC [ ] Others
8. How do you consider the interest rate of SBI loans when compared to other
banks?
[ ] High [ ] Average [ ] Low
9. How do you rate the documentation formalities of SBI with other banks?
[ ] Very easy compare to other banks [ ] Easy compared to other banks
[ ] Same as compared to Other Banks[ ] Longer than other banks
10. How do you rate the accessibility of SBI loans when compared to other banks?
[ ] Easily accessible [ ] Accessible [ ] Very difficult to access
11. How do you rate the processing time of SBI loans when compared to other
banks?
[ ] Higher processing time [ ] Moderate processing time [ ] Too slow
12. How do you rate the customer service of SBI when compared to other banks?
[ ] Excellent [ ] Very good [ ] Good [ ] Average

[ ] Poor
13. How do you rate the loan processing fee/documentation fee of SBI bank when
compared to other banks?
[ ] Less than other banks [ ] Equal to other banks [ ] More than other
banks
14. How do you rate the variety of financial products (types of loans) of SBI when
[ ] Very Good [ ] Good [ ] Average

[ ] Poor
PART - B
1. Name: 2. Age:
3. Profession: 4. Phone Number:
5. Monthly Income:
[ ] 10,000 –20,000 [ ] 20,000 – 30,000 [ ] >30,000 [ ] <10,000
6. Have you taken loan in the past, if yes which type of loan?
[ ] Personal loan [ ] Education Loan [ ] Car Loan [ ] Home Loan[ ] Others
7. From which bank did u obtain the loan?
[ ] Allahabad Bank [ ] Vijaya Bank [ ] IDBI [ ] Dena bank

[ ] HDFC [ ] HSBC [ ] Others
8. How do you consider the interest rate of SBI loans when compared to other
banks?
[ ] High [ ] Average [ ] Low
9. How do you rate the documentation formalities of SBI with other banks?
[ ] Very easy compare to other banks [ ] Easy compared to other banks
[ ] Same as compared to Other Banks[ ] Longer than other banks

10. How do you rate the accessibility of SBI loans when compared to other banks?
[ ] Easily accessible [ ] Accessible [ ] Very difficult to access
11. How do you rate the processing time of SBI loans when compared to other
banks?
[ ] Higher processing time [ ] Moderate processing time [ ] Too slow
12. How do you rate the customer service of SBI when compared to other banks?
[ ] Excellent [ ] Very good [ ] Good [ ] Average

[ ] Poor
13. How do you rate the loan processing fee/documentation fee of SBI bank when
[ ] Less than other banks [ ] Equal to other banks [ ] More than other
banks
14. How do you rate the variety of financial products (types of loans) of SBI when
[ ] Very Good [ ] Good [ ] Average

[ ] Poor
15. What are your suggestions for improving the financial products of SBI?
Thank you for your co-operation.

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A STUDY ON LOANS & ADVANCES OF STATE

BANK OF INDIA - BANGALORE

A REPORT SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF

Under the Guidance of:

AL-AMEEN INSTITUTE OF MANAGEMENT STUDIES

CHAPTER NO. CONTENTS PAGE NO.

Sl. No. Chapter No. Table No. Content Page No.

7 IV 4.1 Age Group of the respondents 48

11 IV 4.5 Bank from which the respondents 52

12 IV 4.6 Respondents perception towards 53

13 IV 4.7 Respondents perception towards 54

14 IV 4.8 Respondents perception towards 55

15 IV 4.9 Respondents perception towards 56

16 IV 4.10 Respondents perception towards 57

17 IV 4.11 Respondents perception towards 58

18 IV 4.12 Respondents perception towards 59

Sl. No. Chapter No. Chart No. Content Page No.

1 III 3.2 Growth rate & Trend Profit of SBI 22

2 III 3.3 Growth rate & Trend of Advances 24

4 IV 4.1 Age Group of the respondents 48

5 IV 4.2 Occupation of the respondents 49

6 IV 4.3 Monthly Income of the 50

8 IV 4.5 Bank from which the respondents 52

9 IV 4.6 Respondents perception towards 53

10 IV 4.7 Respondents perception towards 54

11 IV 4.8 Respondents perception towards 55

12 IV 4.9 Respondents perception towards 56

13 IV 4.10 Respondents perception towards 57

14 IV 4.11 Respondents perception towards 58

15 IV 4.12 Respondents perception towards 59

1.1 INDIAN BANKING SYSTEM

Banks and institutional management in the country are under going

Banks plays very important role in the economic development of

1.2 INDIGENOUS BANKING IN INDIA:

Indigenous bankers often endorsed hundis issued by traders and

1.3 INDIAN FINANCIAL SYSTEM:

The economic development of a country depends on its financial

The primary role of any financial institution is to act as a conduit for

1.4 THE STUCTURE OF BANKING SYSTEM:

The structure of banking system is determined by economic and

Vasanth Desai (2006) from his book titled as ‘Banks and

1.4.1 COMMERCIAL BANKS

Commercial Banks are the oldest, biggest and fastest growing

The commercial banking structure in India consists of:

FUNCTIONS OF COMMERCIAL BANKS

PRIMARY FUNCTIONS SECONDARY FUNCTIONS

RECEIVING OF AGENCY GENERAL UTILITY

Indian commercial banks can be broadly classified into two

A. PUBLIC SECTOR BANKS:

Public sector Banks refer to commercial banks, which are owned

Public sector banks can be further classified in to two categories. They

STATE BANK OF INDIA:

In accordance with the recommendation of the All India Rural Credit

In accordance with the Recommendation of the All-India Rural

1. The State Bank of Bikaner and Jaipur (SBBJ)

By the 1960s, the Indian banking industry has become an

The paper was received with positive enthusiasm. Thereafter,

A second dose of nationalisation of 6 more commercial banks

B.PRIVATE SECTOR BANKS: