Professional Documents
Culture Documents
Mandeep Kaur
ACKNOWLEDGEMENT
Knowledge is an experience gained in life, it is the choicest possession, which should not
be shelved but should be happily shared with others.
I have taken efforts in this project. However, it would not have been possible without the kind
support and help of many individuals and organizations. I would like to extend my sincere
thanks to all of them.
I am highly thankful to Mr. Rashid for their guidance and constant supervision, as well as for
providing necessary information regarding the project & also for their support in completing
the project.
My thanks and appreciations also go to my colleague in developing the project and people
who have willingly helped me out with their abilities.
Mandeep kaur
Sr Index Page
no. no.
1.
Introduction to banking industry 1-5
History of banking India
2.
Introduction to bank
History of the Canara bank 1-26
Profile of the Canara bank
Financial statement of canara bank
Products and services of Canara bank
McKinsey's 7s Framework
3.
Introduction to Project
Cash management
Swot analysis 1-31
Research methodology
Data analysis
4.
Conclusion and suggestions 1-2
Chapter1 :Introduction
1(a).HISTORY OF BANKING IN INDIA
Without a sound and effective banking system in India it cannot have a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors.
For the past three decades India's banking system has several outstanding achievements to its
credit. The most striking is its extensive reach. It is no longer confined to only metropolitans
or cosmopolitans in India. In fact, Indian banking system has reached even to the remote
corners of the country. This is one of the main reasons of India's growth process.
The government's regular policy for Indian bank since 1969 has
paid rich dividends with the nationalization of 14 major private banks of India.
Not long ago, an account holder had to wait for hours at the bank counters for getting a draft
or for withdrawing his own money. Today, he has a choice. Gone are days when the most
Efficient bank transferred money from one branch to other in two days. Now it is simple as
Instant messaging or dial a pizza. Money has become the order of the day. The first bank in
India, though conservative, was established in 1786. From 1786till today, the journey of
Indian Banking System can be segregated into three distinct phases. They areas mentioned
below:-
Early phase from 1786 to 1969 of Indian banks
Nationalization of Indian Banks and up to 1991 prior to Indian banking
sector Reforms.
New phase of Indian Banking System with the advent of Indian Financial &Banking
Sector Reforms after 1991.
To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II
and Phase III.
Phase I
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and
Bengal Bank. The East India Company established Bank of Bengal (1809),Bank of Bombay
(1840) and Bank of Madras (1843) as independent units and called it Presidency Banks.
These three banks were amalgamated in 1920 and Imperial Bank of India was established
which started as private shareholders banks, mostly Europeans shareholders
In 1865 Allahabad Bank was established and first time exclusively by Indians,
Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906
and1913,Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank,
and Bank of Mysore were set up. Reserve Bank of India came in 1935.During the first phase
the growth was very slow and banks also experienced periodic failures between 1913 and
1948. There were approximately 1100 banks, mostly small. To streamline the functioning and
activities of commercial banks, the Government of India came up with The Banking
Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per
amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with
extensive powers for the supervision of banking in India as the Central Banking Authority.
During those days public has lesser confidence in the banks. As an after math deposit
mobilization was slow. Abreast of it the savings bank facility provided by the Postal
department was comparatively safer. Moreover, funds were largely given to traders
Phase II
Government took major steps in this Indian Banking Sector Reform after independence. In
1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale
especially in rural and semi-urban areas. It formed State Bank of India to act as the principal
agent of RBI and to handle banking transactions of the Union and State Governments all
over the country. Seven banks forming subsidiary of State Bank of India was nationalized in
1960on 19th July,1969, major process of nationalization was carried out. It was the effort of
the then Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the
country was nationalized. Second phase of nationalization Indian Banking Sector Reform was
carried out in1980 with seven more banks. This step brought 80% of the banking segment in
India under Government ownership
The following are the steps taken by the Government of India to Regulate Banking
Institutions in the Country:-
1949: Enactment of Banking Regulation Act.
1955: Nationalization of State Bank of India.
1959: Nationalization of SBI subsidiaries.
1961: Insurance cover extended to deposits.
1969: Nationalization of 14 major banks.
1971: Creation of credit guarantee corporation.
1975: Creation of regional rural banks.
1980: Nationalization of seven banks with deposits over 200 crore.
After the nationalization of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.
Banking in the sunshine of Government ownership gave the public implicit faith and
immense confidence about the sustainability of these institutions
Phase III
This phase has introduced many more products and facilities in the banking sector in its
reforms measure. In 1991, under the chairmanship of M Narasimham a committee was
setup by his name which worked for the liberalization of banking practices. The country is
flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory
service to customers. Phone banking and net banking is introduced. The entire system
became more convenient and swift. Time is given more importance than money. The financial
system of India has shown a great deal of resilience. It is sheltered from any crisis triggered
by any external macroeconomics shock as other East Asian Countries suffered. This is all due
to a flexible exchange rate regime, the foreign reserves are high, the capital account is not yet
fully convertible, and banks and their customers have limited foreign exchange exposure
CURRENT SCENARIO
Currently (2010), overall, banking in India is considered as fairly mature in terms of supply,
product range and reach-even though reach in rural India still remains a challenge for the
private sector and foreign banks. Even in terms of quality of assets and capital adequacy,
Indian banks are considered to have clean, strong and transparent balance sheets-as compared
to other banks in comparable economies in its region. The Reserve Bank of India is an
autonomous body, with minimal pressure from the government. The stated policy of the Bank
on the Indian Rupees to manage volatility-without any stated exchange rate-and this has
mostly been true. With the growth in the Indian economy expected to be strong for quite
some time-especially in its services sector, the demand for banking services-especially retail
banking, mortgages and investment services are expected to be strong. M&As, takeovers,
asset sales and much more action (as it is unravelling in China) will happen on this front in
India
In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in
Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has
been allowed to hold more than 5% in a private sector bank since the RBI announced norms
in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by
them. Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks
(that is with the Government of India holding a stake), 29 private banks (these do not have
government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign
banks. They have a combined network of over 53,000 branches and 21,000 ATMs. According
to report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of
total assets of the banking industry, with the private and foreign banks holding 18.2% and
6.5%respectively.SBI is the only bank consisting 26% participation in public sector banks
and 39% participation in commercial banks in India
Banking in India Reserve Bank of India
1. Central Bank
Canara Banks rating reflects its strong market position, adequate capitalisation levels, and
comfortable liquidity profile. The rating also factors the banks business profile that is
supported by a good resources position, as well as its better asset quality as compared to its
peers. Crisil also considers the Government of Indias (GoI) majority ownership of Canara
Bank to be a positive rating factor. The banks earnings profile is characterised by moderate
although improving profitability.
Founding Principles:
1. To remove Superstition and ignorance.
4. To transform the financial institution not only as the financial heart of the community
but the social heart as well.
7. To develop a concern for fellow human being and sensitivity to the surroundings with
a view to make changes/remove hardships and sufferings.
Sound founding principles, enlightened leadership, unique work culture and remarkable
adaptability to changing banking environment have enabled Canara Bank to be a frontline
banking institution of global standards.
Significant Milestones::
1st July 1906: Canara Hindu Permanent Fund Ltd. formally registered with a
capital of 2000 shares of 50/- each, with 4 employees
1983:
Overseas branch at London inaugurated Cancard (the Banks credit
card) launched
1989:
Canbank Venture Capital Fund started
1992-93: Became the first Bank to articulate and adopt the directive
principles of Good Banking.
1995-96:
Became the first Bank to be conferred with ISO 9002 certification
for one of its branches in Bangalore
2001-02:
Opened a 'Mahila Banking Branch', first of its kind at Bangalore,
for catering exclusively to the financial requirements of women
clientele.
2002-03:
Maiden IPO of the Bank
2003-04:
Launched Internet Banking Services
2004-05:
100% Branch computerization
2005-06:
Entered 100th Year in Banking Service. Launched Core Banking
Solution in select branches. Number One Position in Aggregate
Business among Nationalized Banks.
2006-07: Signed MoUs for Commissioning Two JVs in Insurance and Asset
Management with international majors viz., HSBC (Asia Pacific)
Holding and RobecoGroep N.V respectively.
2007-08:
Launching of New Brand Identity. Incorporation of Insurance and
Asset Management JVs. Launching of 'Online Trading' portal.
Launching of a Call Centre. Switchover to Basel II New Capital
Adequacy Framework.
2008-09:
The Bank crossed the coveted 3 lakh crore in aggregate business.
The Banks 3rd foreign branch at Shanghai commissioned.
2009-10:
The Banks aggregate business crossed 4 lakh croremark.
Net profit of the Bank crossed 3000 crore. The Banks branch
network crossed the 3000 mark.
2011-12:
Total number of branches reached 3600. The Banks 5th foreign
branch at Manama, Bahrain opened.
2013-14: 1027 branches and 2786 ATMs opened during the year. Global
business crossed the`7 lakh crore milestone.
As at March 2014, the total business of the Bank stood at 721790 crore
Vision:
Mission:
To provide quality banking services with enhanced customer orientation, higher value
creation for stakeholders and to continue as a responsive corporate social citizen by
effectively blending commercial pursuits with social banking
Profile
Widely known for customer centricity, Canara Bank was founded by ShriAmmembalSubbaRaoPai,
a great visionary and philanthropist, in July 1906, at Mangalore, then a small port town in
Karnataka. The Bank has gone through the various phases of its growth trajectory over hundred
years of its existence. Growth of Canara Bank was phenomenal, especially after nationalization in
the year 1969, attaining the status of a national level player in terms of geographical reach and
clientele segments. Eighties was characterized by business diversification for the Bank. In June
2006, the Bank completed a century of operation in the Indian banking industry. The eventful
journey of the Bank has been characterized by several memorable milestones. Today, Canara Bank
occupies a premier position in the comity of Indian banks. With an unbroken record of profits since
its inception, Canara Bank has several firsts to its credit. These include:
Over the years, the Bank has been scaling up its market position to emerge as a major 'Financial
Conglomerate' with as many as nine subsidiaries/sponsored institutions/joint ventures in India and
abroad. As at March 2014, the Bank has further expanded its domestic presence, with 4750
branches spread across all geographical segments. Keeping customer convenience at the forefront,
the Bank provides a wide array of alternative delivery channels that include over 6312 ATMs,
covering 3572 centres.Several IT initiatives were undertaken during the year. The Bank set up 102
hi-tech E-lounges in select branches with facilities like ATM, Cash Deposit Kiosk with voice
guided system, Cheque Deposit Kiosk, Self Printing Passbook Kiosk, Internet Banking Terminal,
Online Trading Terminal and Corporate Website Access. Canara e-Infobook an electronic
passbook and banking related information facility was introduced on mobile platforms - Android,
Windows8 &iOS. The Bank also launched Canara Bank RuPay Debit Card, Canara Club Card
Debit, Canara Secured Credit Card, Canara Elite Debit Card and EMV Chip Cards under debit and
credit cards. Online Savings Bank and PPF account opening were introduced during the year. The
Bank made several value additions under internet banking and mobile banking services.
Not just in commercial banking, the Bank has also carved a distinctive mark, in various corporate
social responsibilities, namely, serving national priorities, promoting rural development, enhancing
rural self-employment through several training institutes and spearheading financial inclusion
objective. Promoting an inclusive growth strategy, which has been formed as the basic plank of
national policy agenda today, is in fact deeply rooted in the Bank's founding principles. "A good
bank is not only the financial heart of the community, but also one with an obligation of
helping in every possible manner to improve the economic conditions of the common
people". These insightful words of our founder continue to resonate even today in serving the
society with a purpose. The growth story of Canara Bank in its first century was due, among
others, to the continued patronage of its valued customers, stakeholders, committed staff and
uncanny leadership ability demonstrated by its leaders at the helm of affairs. We strongly believe
that the next century is going to be equally rewarding and eventful not only in service of the nation
but also in helping the Bank emerge as a "Preferred Bank" by pursuing global benchmarks in
profitability, operational efficiency, asset quality, risk management and expanding the global reach.
Industry Banking
Financial services
Headquarters Bangloreindia
Key people Shri R.K.DUBEY, (Chairman & MD) , Shri Ashok Kumar Gupta (Executive
Director)
Website Canarabank.com
Awards/Achievements
Best Bank Award among large banks by IDRBT for "Use of Technology for Financial
Inclusion" handed over by RBI Governor Dr. D Subbarao.
Skoch Award for Financial Inclusion, handed over by Dr. C Rangarajan, Chairman,
PMEAC.
1st Rank for Self Help Groups Linkage for the year 2011-12 in the State of Bihar.
Award for 'Best Online Bank' among Public Sector Banks- IBA Banking Technology
Awards 2011
Award for 'Best Customer Relationship Initiative' among Public Sector Banks - IBA
Banking Technology Awards 2011.
National Vigilance Excellence Award 2012 for the second consecutive year from
Vigilance Study Circle, Hyderabad under the auspices of the Central Vigilance
Commission.
In recognition of the varied initiatives, the Bank was conferred with the following
awards
Global CSR Excellence and Leadership Awards 2014 from CSR World Congress.
Best Home Loan Provider Award from Outlook Money for 2013.
Finger Print based Biometric Authorization for CBS declared as winner for secure
IT 2014 award.
The Banks Desktop Management System project awarded amongst Indias Best
-2013 in 33rd SKOCH Summit.
NFS Operational Excellence Award 2013 - Special Jury Award 2013 by NPCI in
recognition of Bank's excellent performance in Key Parameters in respect of ATMs
and switch connected to NFS ATM Network.
Golden Peacock Award for excellence in Corporate Social Responsibility for the year
2013.
Greentech Award for excellence in Corporate Social Responsibility for the year 2013.
Skoch Renaissance Award 2013, with a Medal and Citation for being India's Best-
2013.
Board of directors
Consistency
Conservativeness
disclosure
Analyzing of financial statements helps to know the financial health of the borrower, which
provides the detail of the liabilities and the assets of the applicant. It also helps to study the
trends in the financial matters of the company. It helps to valuate the assets of the applicant
company. It assists in decision making process relating to the future activities.
Meaning:-profit and loss account is one of the essential document which shows the
summary of revenues, expenses and net income of the firm during the particular
financial period.
It gives a concise summary of the firms revenue and expenses during the Particular
period.
It measures the firms profitability.
It represents the activity of the firm.
Rs (in Crores)
Assets
Gross Block 6641.56 2862.72 4858.37 4686.15 4480.37
NET CURRENT
ASSETS 344103.75 277021.61 260354.11 241729.79 185227.46
TOTAL
ASSETS(A+B+C+D+E) 477573.57 401017.15 365269.07 328274.12 257763.78
Products and services provided by Canara bank:
For traders, businessmen, corporate bodies etc. who operate the account
frequently.
The minimum balance requirement for current account is as follows:
Metro/Urban - Rs.5000/-
Semi-Urban/Rural- Rs.1000/-
Not eligible for interest.
No ceiling on the number of withdrawals and credits.
Pass book, pass sheet, standing instructions, cheque collection facilities
available.
2.Fixed Deposits
When you want to invest your hard earned money for a longer period of time and
get a regular income, our Fixed Deposit Scheme is ideal.
It is SAFE, LIQUID and FETCHES HIGH RETURNS.
Period of Deposit
Minimum 15 days
Maximum 120 months
High Returns
Attractive rates as applicable from time to time.
Interest Payment
Monthly, Quarterly, Half-yearly or Annual intervals at depositor's choice
Easy liquidity
Loan against deposit.
Closure before maturity permissible.
Facility of part withdrawal of deposits in units of Rs.1000/- keeping the rest of
the deposit to earn contracted rate of interest.
Nomination facility
Available
3.Kamadhenu Deposits
Period of Deposit
Minimum 5 months
Maximum 120 months
(can be for odd period also)
High Returns
Attractive rates as applicable from time to time.
Interest compounded every quarter
Easy liquidity
Closure before maturity
Loan against deposit permissible.
Facility of part withdrawal of deposits in units of Rs.1000/- keeping the rest of
the deposit to earn contracted rate of interest.
Nomination facility
Available
Open a Kamadhenu Deposit Account and enjoy the way your money grows
4.Recurring Deposits
Amount of Deposit
As low as Rs.50/- per month ( in multiples of Rs. 50/-)
No ceiling on maximum amount..
High Returns
Attractive rates as applicable from time to time.
Interest compounded every quarter
Easy liquidity
Closure before maturity
Loan against deposit permissible.
Nomination facility
Available
We finance exports at pre-shipment stage as well as post shipment stage, which can be
availed either in foreign currency or Indian Rupees.
The Bank not only finances at customers option in foreign currency at pre-shipment and post-
shipment stages at LIBOR related rates but also finance the import leg in foreign currency
where imported inputs are required for exports.
The Bank has the expertise in handling project exports of goods and services.
The Bank has an excellent worldwide correspondent relationship and have the capability to
handle any export, import, remittance and related transactions anywhere in the world and in
any currency.
Non fund based transactions like adding confirmations to LC, issuing inward and outward
Bid bonds & guarantees, establishing LCs for import into India, arranging buyer's credit at
attractive terms etc. are our forte.
Canara Bank has branches in London, Hong Kong and Shanghai, China. We have a joint
venture with SBI at Moscow under the name Commercial Bank of India LLC. The Bank also
manages 2 Exchange houses in the Gulf and has arrangement with 20 Exchange Houses and
17 Banks for drawing DDs from Gulf Countries on our select branches through out India.
The Bank has an integrated Treasury with a forex dealing room located in Mumbai in India.
Our London branch has a dealing room of its own. We are active in the Indian forex market
as well as in Overseas forex market. We provide a whole range of services and products like
purchase and sale of 7 world currencies, forward bookings and other forex hedging
instruments like currency swaps.
The above services are offered at attractive cost to the customers of the Bank subject to the
Bank's policies and exchange control / FEMA provisions laid down by the Regulatory
Authorities from time to time.
Our 16 Foreign Departments located in major cities in India have the requisite expertise to
guide you and inform you in any matter connected with our products and services as well as
the current forex regulations.
The Bank has Forex Relationship Managers stationed in the metro cities exclusively for this
purpose.
c).TeleBanking Services:
Canara Bank offers one more value added service, i.,e Tele Banking services to its customers
for handling banking related services right from their home. By dialing the number allotted
by the bank, customers can transact most of the banking transactions. Presently Telebanking
facility is available throughout the day. This facility is available only for the account holders
in our Core Banking branches. The customers can dial toll free no. 1800 425 0018 within
India to get the following services from the Bank.
Individuals
Joint Account holders with either or survivor operation condition.
Proprietorship concern
PA/LA holder of NRIs.
2.Corporate banking:
a).term laon:
1.Housing loan:
Purpose:
Eligibility:
We finance upto:
For NRIs up to 2 years' gross income and selectively up to 3 years' gross income.
Rate of Interest
Security:
Repayment:
Processing Charges:
Nominal processing fee of 0.50% (Min Rs.1500/- and Max. Rs.10,000/-) is charged.
(Waived during Retail Loan Festival period valid till 15.01.2012).
Prepayment :
At your choice. In case of take over of liability by other banks / HFIs, no prepayment
penalties in respect of Housing Loans carrying floating rate of interest.
Documents / Formalities:
Sale Deed
Copy of the approved plan for the proposed construction / extension / addition
Detailed cost estimate / valuation report from Bank's Panel Chartered Engineer /
Architect
Legal Scrutiny Report, EC for the past 13 years, Property Tax paid receipt, Khata and
permission for mortgage, wherever necessary
Salary Certificate and Form No.16 (in case of salaried persons)
IT Returns filed for the past two years (in case of non-salaried persons)
Balance Sheet and P&L Account for the past three years (in case of self-employed)
b).Syndicate services:
A new value added fee based service of the Bank for Corporates.
Borrowers can access from a diverse group of financial institutions for funding .
Save the time and efforts of approaching / negotiating with individual banks for
sanction.
3.NRI BANKING:
1.LockBox Service
A new facility, exclusively to cater to the long felt need of NRIs based in USA.
Remittances by way of Cheque to anywhere in India through our 3000 plus strong
network of branches made very simple and speedier
No need to send cheques to India and again to USA for collection.
Get the chequesrealised in USA itself, at a marginal cost, in fact less than wire transfer
cost, that too at a faster pace than the present system of Cheque collection.
All you have to do is deposit your personal cheques in a local Post Box of Bank of
America in USA and get proceeds credited in INR in Canara Bank account in India or for
opening an FCNR account in Foreign Currency.
Simple way to send: NRI Customers/Remitters can post a Cheque from the
comfort of their home
Speed : To and fro transit of instrument is totally avoided, thereby
saving time.
Wide Network : Customers can transfer the amounts to accounts in any of
the 3000 plus branches of our bank across India
Exchange Rates : Most competitive exchange rate
Categorization of canara bank services:
Area of Operation
As a premier commercial bank in India, Canara Bank has a distinct track record in the
Service of the nation for over 105 years. Today, Canara Bank has a strong pan India
presence with 3432 branches and 2623 ATMs, catering to all segments of an ever
growing clientele base of 4.04 crores. Across the borders, the Bank has 5 branches,
one each at London, Hong Kong, Shanghai, Leicester and Manama and a
Representative Office at Sharjah, UAE.Canara Bank is recognized as a leading
financial conglomerate in India, with as many as nine subsidiaries/sponsored
institutions/joint ventures in India and abroad.
Infrastructure Facilities
The bank took several initiatives in the InfoTech front. The Bank covered all its
branches/Offices under Core Banking Solution (CBS). With 100% CBS, the Bank
now offers technology banking services, such as, Internet Banking, Funds transfer
through NEFT and RTGS, SMS alerts. The bank also offers online trading facility to
its clients through its subsidiary M/s Canara Bank Securities Ltd. The ATMs have
been enabled to offer value added services like Travel ticket booking, Mobile top up
and utility bill payments.
In view of the increased attacks of phishing and pharming the Bank has put in place
24X7 centralized monitoring system of anti phishing and anti malware. To make the
Internet Banking facility more secure a slew of measures like implementation of OTP
(One Time Password) module, two live validation of account number for
NEFT/RTGS transaction through Net Banking and mutual authentication of Internet
Server customer PC (CAN Secure) were introduced. With increased confidence, the
number of customers enrolled for internet banking has moved up to 3.86 Lakhs
(March, 2011).
The Bank upgraded its Data Centre infrastructure to comply with ISO 27001
standards and did the upward migration of database to Oracle 11G version. The bank
has a well designed and secured corporate network covering all the branches and
offices.
A customer terminal has also been provided in the branches for easy and ready
reference to own accounts of customers. The Bank has also implemented Electronic
Data Interchange Module for payment of customs duty and fulfilling the related
formalities in electronic mode.
To connect with the youth of the country and obtain first hank unrestricted feedback,
the bank has a presence at Twitter (http://twitter.com/canarabanktweet).
The Bank took several measures for the effective implementation of KYC and Anti
Money Laundering (AML) guidelines and for ensuring KYC compliance by all
branches.
To ensure better compliance of guidelines on KYC/AML following steps have been
initiated.
1. All Zonal/ Circles have nominated an Executive as Nodal Compliance Officer for
monitoring and ensuring compliance of guidelines on KYC/AML/Combating of
Financial of Terrorism (CFT).
2. Branches were advised to strictly adhere to the guidelines on KYC/AML/CFT to
prevent abuse of banking system by money launderers using money mules.
3. NREGA (National Rural Employment Guarantee Act) job card/Aadhar document
has to be accepted as identification document for opening of accounts. Accounts
opened with these documents will have restrictions applicable to 'small accounts'.
4. Printing and dispatch of Thanks giving letters to new account holders and
introducers are done centrally at Zonal/Circles Offices.
Future growth and Prospectus
The coming years are likely to be of strong but uneven global growth. As financial
markets continue to normalize and households and firms reduce their indebt ness,
growth is projected to gradually strengthen the emerging and developed economies.
The IMF projected global growth at 4.5% for 2012. Emerging economies will
continue to lead global growth. However, uncertainties in the form of higher oil and
non-oil commodity prices and public debt pose risk to global growth.
Indian economy is expected to continue its broad based growth momentum in FY12
backed by strong investment and consumption demand. Domestic demand will
continue to hold the key to GDP growth. Inflation is under control after a long period.
A strong saving and investment and consumption rates, favorable capital market
conditions, capital flows and positive business outlook will also help the economy to
maintain its growth momentum. Services sector will be a major contributor in the
positive domestic outlook and banking sector will continue to be among the
performing sectors in FY12. Efforts to bring in more inclusive growth and focus on
the rural economy would propel the growth engine of the economy further.
McKinsey's 7s Framework
The McKinsey 7S framework is developed in the early 1980s by Tom Peters and
Robert Waterman, two consultants working at the McKinsey & Company consulting
firm, the basic premise of the model is that there are seven internal aspects of an
organization that need to be aligned if it is to be successful. The 7S model can be used
in a wide variety of situations where an alignment perspective is useful.
The McKinsey 7S model involves seven interdependent factors which are categorized
as either "hard" or "soft" elements:
"Hard" elements are easier to define or identify and management can directly
influence them: These are strategy statements; organization charts and reporting lines;
and formal processes and IT systems.
"Soft" elements, on the other hand, can be more difficult to describe, and are less
tangible and more influenced by culture. However, these soft elements are as
important as the hard elements if the organization is going to be successful
Strategy:
The key elements for the Bank's business strategy are;
To focus on quality growth opportunities by maintaining and enhancing the
strengths in services
Use technology for competitive advantage and customer centric progressive
bank
Branch expansion to provide services to a larger customer segment during
2010-11 210 branches were added. On January 2012, there were 3432 branches
of the Bank.
To become one stop financial supermarket, the Bank has forayed into newer
areas of banking products and services to meet the increasing needs of the
customers.
Systems:
The Bank has taken various proactive technology initiatives to maintain its
competitive edge in Indian banking industry. Canara Bank has chosen Flex cube from
Oracle Financial Services as the software application. Now all branches of Canara
Bank are live on core banking application Flex cube.
Flex cube is a universal banking solution for retail, corporate, internet and investment
banking, from front to back office work. Flex cube also has the ability to support
multi-bank, multi-currency, and multi-channel operations, using a widely recognized
data model that will keep abreast of market dynamics. Canara Bank has a strong pan
India presence with 2623 ATMs
Style:
In Canara Bank, the decisions are taken by the top management concerning matters
related to the organization. The decisions relating to department matters are taken by
the departmental heads. The bank follows a participative leadership style which
allows the ideas, suggestions etc. for the betterment of the bank. The team members
are cooperative rather than being competitive.
Staff:
Skills:
Training policies and programs are suitably designed, modified and updated on a
continuous basis to upgrade the knowledge levels and skills of its Executives,
Officers, and Workmen on par with the best in the industry. While several new
programs are introduced in tune with the corporate goals, the existing programs are
made more interactive and learner friendly. Risk management and Basel II are the
focus areas of their training programs.
Shared Values:
Canara Bank was founded on these Principles,
1. To remove Superstition and ignorance.
2. To spread education among all to sub-serve the first principle.
3. To inculcate the habit of thrift and savings.
4. To transform the financial institution not only as the financial heart of the
community but the social heart as well.
5. To assist the needy.
6. To work with sense of service and dedication.
7. To develop a concern for fellow human being and sensitivity to the
surroundings with a view to make changes/remove hardships and sufferings.
"A good bank is not only the financial heart of the community, but also one with an
obligation of helping in every possible manner to improve the economic conditions of
the common people"
- A. SubbaRaoPai
SWOT Analysis
Strengths:
1. The Bank have well experienced, well trained, most dedicated and committed
staff. There are sustained and focused efforts at every level, by each employee of
the Bank, to continue to build up core deposits.
2. Strong rural presence.
3. It is well equipped to meet the challenges of 21st century, in the areas of IT,
Knowledge and competition.
4. It has launched Core Centralized banking solutions where all branches are
connected live.
5. The Bank has specialized branches catering to the specific clientele segment.
Weaknesses:
Opportunities:
1. Controlling NPA through cash recovery. NPA was at 1.11% (Rs. 2347 crores) for
the year ended 31st March, 2011.
2. To expand overseas business.
3. Upward revision in Deposit/interest rates attracts new customers/deposits.
4. Up gradation in technological products saves time and improves business.
Threats:
1. The Bank face competition from other public sector bank, private sector banks,
foreign banks and other financial institutions.
2. Changing economic policies of Government will have direct impact on interest
rates.
3. Globalization has allowed other industries, such as IT industry, to attract talent
human resource.
Introduction to project
Cash management
Cash is the important current asset for the operations of the business. Cash is the basic
inputneeded to keep the business running on a continuous basis; it is also the ultimate output
expectedto be realized by selling the service or product manufactured by the firm. The firm
should keep sufficient cash, neither more nor less. Cash shortage will disrupt the firms
manufacturing operations while excessive cash will simply remain idle, without contributing
anything towards the firms profitability. Thus, a major function of the financial manager is to
maintain a soundcash position
Cash is the money which a firm can disburse immediately without any restriction. The term
cash includes coins, currency and cheques held by the firm, and balances in its bank accounts.
Sometimes near-cash items, such as marketable securities or bank times deposits, are also
included in cash. The basic characteristic of near-cash assets is that they can readily be
converted into cash. Generally, when a firm has excess cash, it invests it in marketable
securities. This kind of investment contributes some profit to the firm
2. Cash Forecasting
Cash forecasting is backbone of cash planning. It forewarns a business regarding expected
cash problems, which it may encounter, thus assisting it to regulate further cash flow
movements. Lack of cash planning results in spasmodic cash flows.
4. Liquidity Analysis:
The importance of liquidity in a business cannot be over emphasized. If one does the
autopsies of the businesses that failed, he would find that the major reason for the failure was
theirinability to remain liquid. Liquidity has an intimate relationship with efficient utilisation
of cash. It helps in the attainment of optimum level of liquidity.
6. Economical Borrowings
Another product of non-synchronisation of cash inflows and cash outflows is emergence of
deficits at various points of time. A business has to raise funds to the extent and for the period
of deficits. Raising of funds at minimum cost is one of the important facets of cash
management.
The ideal cash management system will depend on the firms products, organization
structure, competition, culture and options available. The task is complex, and decisions
taken can affect important areas of the firm. For example, to improve collections if the credit
period is reduced, it may affect sales. However, in certain cases, even without fundamental
changes, it is possible to significantly reduce cost of cash management system by choosing a
right bank and controlling the collections properly.
Transaction Motive
The Transactionmotive requires a firm to hold cash to conducts its business in the ordinary
course. The firm needs cash primarily to make payments for purchases, wages and salaries,
other operating expenses, taxes, dividends etc. The need to hold cash would not arise if there
were perfect synchronization between cash receipts and cash payments, i.e., enough cash is
received when the payment has to be made. But cash receipts and payments are not perfectly
synchronized. For those periods, when cash payments exceeds cash receipts, the firm should
maintain some cash balance to be able to make required payments. For transactions purpose,
afirm may invest its cash in marketable securities. Usually, the firm will purchase securities
whose maturity corresponds with some anticipated payments, such as dividends, or taxes in
the future. Notice that the transactions motive mainly refers to holding cash to meet
anticipated payments whose timing is not perfectly matched with cash receipts.
Precautionary Motive
The Precautionarymotive is the need to hold cash to meet contingencies in the future. It
provides a cushion or buffer to withstand some unexpected emergency. The precautionary
amount of cash depends upon the predictability of cash flows. If cash flow can be predicted
with accuracy, less cash will be maintained for an emergency. The amount of precautionary
cash is also influenced by the firms ability to borrow at short notice when the need arises.
Stronger the ability of the firm to borrow at short notice, less the need for precautionary
balance. The precautionary balance may be kept in cash and marketable securities.
Marketable securities play an important role here. The amount of cash set aside for
precautionary reasons is not expected to earn anything; therefore, the firm attempt to earn
some profit on it. Such funds should be invested in high-liquid and low-risk marketable
securities. Precautionary balance should, thus, held more in marketable securities and
relatively less in cash.
Speculative Motive
The speculativemotive relates to the holding of cash for investing in profit-making
opportunities as and when they arise. The opportunity to make profit may arise when the
security prices change. The firm will hold cash, when it is expected that the interest rates will
rise and security prices will fall. Securities can be purchased when the interest rate is
expected to fall; the firm will benefit by the subsequent fall in interest rates and increase in
security prices. The firm may also speculate on materials prices. If it is expected that
materials prices will fall, the firm can postpone materials purchasing and make purchases in
future when price actually falls. Some firms may hold cash for speculative purposes. By and
large, business firms do not engage in speculations. Thus, the primary motives to hold cash
and marketable securities are: the transactions and the precautionary motives.
CASH PLANNING
Cash flows are inseparable parts of the business operations of firms. A firm needs cash to
invest in inventory, receivable and fixed assets and to make payment for operating expenses
in order to maintain growth in sales and earnings. It is possible that firm may be taking
adequate profits, but may suffer from the shortage of cash as its growing needs may be
consuming cash very fast. The cash poor position of the firm can be corrected if its cash
needs are planned in advance. At times, a firm can have excess cash with it if its cash inflows
exceed cash outflows. Such excess cash may remain idle. Again, such excess cash flows can
be anticipated and properly invested if cash planning is resorted to. Cash planning is a
technique to plan and control the use of cash. It helps to anticipate the future cash flows and
needs of the firm and reduces the possibility of idle cash balances (which lowers firms
profitability) and cash deficits (which can cause the firms failure).
Cash planning protects the financial condition of the firm by developing a projected cash
statement from a forecast of expected cash inflows and outflows for a given period. The
forecasts may be based on the present operations or the anticipated future operations. Cash
plans are very crucial in developing the operating plans of the firm.
Cash planning can be done on daily, weekly or monthly basis. The period and frequency of
cash planning generally depends upon the size of the firm and philosophy of management.
Large firms prepare daily and weekly forecasts. Medium-size firms usually prepare weekly
and monthly forecasts. Small firms may not prepare formal cash forecasts because of the non-
availability of information and small-scale operations. But, if the small firm prepares cash
projections, it is done on monthly basis. As a firm grows and business operations become
complex, cash planning becomes inevitable for its continuing success.
Whenever the firm converts its marketable securities to cash, it incurs a cost known as
transaction cost. Total number of transactions in a particular year will be total funds required
(T), divided by the cash balance (C) i.e. T/C. The assumption here is that the cost per
transaction is constant. If the cost per transaction is c, then the total transaction cost will be:
The total annual cost of the demand for cash will be:
As the demand for cash, C increases, the holding cost will also increase and the transaction
cost will reduce because of a decline in the number of transactions. Hence, it can be said that
there is a relationship between the holding cost and the transaction cost.
The optimum cash balance, C* is obtained when the total cost is minimum.
Most firms dont use their cash flows uniformly and also cannot predict their daily cash
inflows and outflows. Mille-Orr Model helps them by allowing daily cash flow variation.
Under the model, the firm allows the cash balance to fluctuate between the upper control
limit and the lower control limit, making a purchase and sale of marketable securities only
when one of these limits is reached. The assumption made here is that the net cash flows are
normally distributed with a zero value of mean and a standard deviation. This model provides
two control limits the upper control limit and the lower control limit as well as a return
point. When the firms cash limit fluctuates at random and touches the upper limit, the firm
buys sufficient marketable securities to come back to a normal level of cash balance i.e. the
return point. Similarly, when the firms cash flows wander and touch the lower limit, it sells
sufficient marketable securities to bring the cash balance back to the normal level i.e. the
return point.
The lower limit is set by the firm based on its desired minimum safety stock of cash in
hand The firm should also determine the following factors:
1. An interest rate for marketable securities, (i)
2. A fixed transaction cost for buying and selling marketable securities, (c)
3. The standard deviation if its daily cash flows, (s)
The upper control limits and return path are than calculated by the Miller-Orr Model as
follows:
Distance between the upper limits and lower limits is 3Z.
(Upper limit Lower limit) = (3/4 C Transaction Cost C Cash Flow Variance/Interest
Rate)1/3
If the transaction cost is higher or cash flows shows greater fluctuations, than the upper limit
and lower limit will be far off from each other. As the interest rate increases, the limits will
come closer. There is an inverse relation between the Z and the interest rate. The upper
control limit is three times above the lower control limits and the return point lies between the
upper and lower limits. Hence,
Upper Limit = Lower Limit + 3Z
Return Point = Lower Limit + Z
So, the firm holds the average cash balance equal to:
Average Cash Balance = Lower Limit + 4/3 Z
The Miller-Orr Model is more realistic as it allows variation in cash balance within the lower
and upper limits. The lower limit can be set according to the firms liquidity requirement. To
determine the standard deviation of net cash flows the pasty data of the net cash flow
behaviour can be used. Managerial attention is needed only if the cash balance deviates from
the limits.
1. Treasury bills-- Treasury bills (TBs) are short-term government securities. The usual
practice in India is to sell treasury bills at a discount and redeem them at par on maturity. The
difference between the issue price and the redemption price, adjusted for the time value of
money, is return on treasury bills. They can be bought and sold any time; thus, they have
liquidity. Also, they do not have the default risk.
4.Bank deposits A firm can deposit its temporary cash in a bank for a fixed period of
time. The interest rate depends on the maturity period. For example, the current interestrate
for a 30 to 45 days deposit is about 3 percent and for 180 days to one year is about 6-7
percent. The default risk of the bank deposits is quite low since the government owns most
banks in India.
5.Inter-corporate deposits Inter-corporate lending borrowing or deposits (ICDs) is a
popular short-term investment alternative for companies in India. Generally a cash surplus
company will deposit (lend) its funds in a sister or associate companies or with outside
companies with high credit standing. In practice, companies can negotiate inter-corporate
borrowing or lending for very short periods. The risk of default is high, but returns are quite
attractive.
6.Money market mutual funds Money market mutual funds (MMMFs) focus on
short-term marketable securities such as TBs, CPs, CDs, or call money. They have a
minimum lock-in period of 30 days, and after this period, an investor can withdraw his or her
money any time at a short notice or even across the counter in some cases. They offer
attractive yields; yields are usually 2 percent above than on bank deposits of same maturity.
MMMFs are of recent origin in India, and they have become quite popular with institutional
investors and some companies
2.Advanced Web Services: Most banks have an Internet-based system which is more
advanced than the one available to consumers. This enables managers to create and authorize
special internal logon credentials, allowing employees to send wires and access other cash
management features normally not found on the consumer web site.
3.Armored Car Services: Large retailers who collect a great deal of cash may have the
bank pick this cash up via an armored car company, instead of asking its employees to
deposit the cash.
4.Automated Clearing House: services are usually offered by the cash management
division of a bank. The Automated Clearing House is an electronic system used to transfer
funds between banks. Companies use this to pay others, especially employees (this is how
direct deposit works). Certain companies also use it to collect funds from customers (this is
generally how automatic payment plans work). This system is criticized by some consumer
advocacy groups, because under this system banks assume that the company initiating the
debit is correct until proven otherwise.
5.Balance Reporting Services: Corporate clients who actively manage their cash
balances usually subscribe to secure web-based reporting of their account and transaction
information at their lead bank. These sophisticated compilations of banking activity
mayinclude balances in foreign currencies, as well as those at other banks. They include
information on cash positions as well as 'float' (e.g., checks in the process of
collection).Finally, they offer transaction-specific details on all forms of payment activity,
including deposits, checks, wire transfers in and out, ACH (automated clearinghouse debits
and credits), investments, etc.
6.Cash Concentration Services: Large or national chain retailers often are in areas
where their primary bank does not have branches. Therefore, they open bank accounts at
various local banks in the area. To prevent funds in these accounts from being idle and
notearning sufficient interest, many of these companies have an agreement set with their
primary bank, whereby their primary bank uses the Automated Clearing
Housetoelectronically "pull" the money from these banks into a single interest-bearing bank
account.
8.Positive Pay:Positive pay is a service whereby the company electronically shares its
check register of all written checks with the bank. The bank therefore will only pay checks
listed in that register, with exactly the same specifications as listed in the register (amount,
payee, serial number, etc.). This system dramatically reduces check fraud.
11.Wire Transfer: A wire transfer is an electronic transfer of funds. Wire transfers can be
done by a simple bank account transfer, or by a transfer of cash at a cash office. Bank wire
transfers are often the most expedient method for transferring funds between bank accounts.
A bank wire transfer is a message to the receiving bank requesting them to effect payment in
accordance with the instructions given. The message also includes settlement instructions.
The actual wire transfer itself is virtually instantaneous, requiring no longer for transmission
than a telephone call.
Controlled Disbursement: This is another product offered by banks under Cash
Management Services. The bank provides a daily report, typically early in the day, that
provides the amount of disbursements that will be charged to the customer's account. This
early knowledge of daily funds requirement allows the customer to invest any surplus in
intraday investment opportunities, typically money market investments. This is different from
delayed disbursements, where payments are issued through a remote branch of a bank and
customer is able to delay the payment due to increased float time. In the past, other services
have been offered the usefulness of which has diminished with the rise of the Internet. For
example, companies could have daily faxes of their most recent transactions or be sentCD-
ROMs of images of their cashed checks.
The speedier you are, its easier for you to address the challenges of globalisation. Corporate
Cash Management Services (CCMS), an innovative service offered by Canara Bank for speedy
collection of cheques and other instruments, places corporate on a faster-track. In more ways
than one-such as definite funds flow, better cash management and deployment of funds, better
monitoring of funds flow, optimum allocation of funds and effective planning of investment
functions.
What is CCMS?
What We Offer?
Under 'SUPERFAST SERVICE', agents or offices of Corporate can deposit the cheques to be
cleared in the local clearing and funds will be pooled at any pooling branch designated by the
Corporate.
Under 'FASTRACK SERVICE', agents or offices of Corporate can deposit the cheques
drawn on outstation centres and proceeds will be pooled at any pooling branch designated by
Corporate.
Under 'BULK COLLECTION SERVICE', agents or offices of Corporate can deposit their
bulk (large number) instruments of small value to be cleared in the local clearing and funds
will be pooled at any pooling branch designated by the Corporate.
Funds available as per need on day zero, day one, day two, day three etc.
Cash Management
As part of CANARA Bank's global transaction solutions to Corporate and Institutions, we
provide Cash Management, Securities Services and Trade Services through our strong market
networks in Asia. We are committed to providing you with
Integrated, superior cross-border and local services
Efficient transaction processing
Reliable financial information
Innovative products
World-class clearing services thus ensuring a full suite of transactional products for
your needs
For Corporate
Canara Bank is highly recognized as a leading cash management supplier across the emerging
markets. Our Cash Management Services cover local and cross border Payments, Collections,
Information Management, Account Services and Liquidity Management for both corporate
and institutional customers. With State Bank's Cash Management services, you'll always
know your exact financial position. You have the flexibility to manage your company's
complete financial position directly from your computer workstation. You will also be able to
take advantage of our outstanding range of Payments, Collections, Liquidity and Investment
Services and receive comprehensive reports detailing your transactions. With State Bank, you
have everything it takes to manage your cash flow more accurately.
Payments Services
Collection Services
Liquidity Management
Our Solution
State Bank's Straight through Services (STS) Payments Solution can be tailored to the
different payment needs of companies, whatever industry, size or country you may be in.With
a comprehensive End-to-end Payment Processing Cycle, STS allows companies to process
variety of payment types, whether they be domestic or international, local or central in
different countries, all in a single system file. To realise the benefits of STS, please contact
your local Relationship Manager or Cash Management representative. Our CoverageWe are
the foreign bank having the largest geographical representation in the country. We are the
only bank which provides draft status to you on the website.
Collection Services
Comprehensive receivables management solution State Bank understands that operating and
sustaining a profitable business these days is extremely tough. In an environment of constant
changes and uncertainties, most businesses face challenges of costs and efficiency. Key
concerns include:
Receivables Management - ensuring receivables are collected in an efficient and
timely manner to optimise utilisation of funds.
Risk Management - ensuring effective management of debtors to eliminate risk of
returns and losses caused by defaulters and delayed payments
Inventory Management - ensuring efficient and quick turnaround of inventory to
maximise returns.
Cost Management - reducing interest costs through optimal utilisation of funds Our
Solution
The State Bank Collections Solution leverages the Bank's extensive regional knowledge and
widespread branch network across our key markets to specially tailor solutions for your
regional and local collection needs. This Collections Solution, delivered through standardised
international platform, has the flexibility to cater to your local needs, thus enabling you to
meet your objectives of reducing costs and increasing efficiency and profitability through
better receivables and risk management. The key components of our solution include the
following:
Extensive Clearing Network
Guaranteed Credit
Comprehensive MIS
System Integration
Outsourcing of Collection
Liquidity Management
Solutions for efficient management of your funds A corporate treasurer's main challenge often
revolves around ensuring that the company's cash resources are utilised to their maximum
advantage. You need a partner bank that can help you:
Maximise interest income on surplus balances; minimise interest expense on deficit
balances for domestic, regional and global accounts
Minimise FX conversion for cross-currency cash concentration
Customise liquidity management solutions for different entities in different countries
Centralise information management of consolidated account balances
Our Solution With our global experience and on-the-ground market knowledge, State Bank
will help you define an overall cash management strategy which incorporates a liquidity
management solution that best meets your needs Key Features Based on your needs and the
regulatory environment that you are in, you can choose any of the following features:
Physical Sweeping
Notional Pooling
SWOT Analysis
Strengths:
1. The Bank have well experienced, well trained, most dedicated and committed
staff. There are sustained and focused efforts at every level, by each employee of
the Bank, to continue to build up core deposits.
2. Strong rural presence.
3. It is well equipped to meet the challenges of 21st century, in the areas of IT,
Knowledge and competition.
4. It has launched Core Centralized banking solutions where all branches are
connected live.
5. The Bank has specialized branches catering to the specific clientele segment.
Weaknesses:
Opportunities:
1. Controlling NPA through cash recovery. NPA was at 1.11% (Rs. 2347 crores) for
the year ended 31st March, 2011.
2. To expand overseas business.
3. Upward revision in Deposit/interest rates attracts new customers/deposits.
4. Up gradation in technological products saves time and improves business.
Threats:
1. The Bank face competition from other public sector bank, private sector banks,
foreign banks and other financial institutions.
2. Changing economic policies of Government will have direct impact on interest
rates.
3. Globalization has allowed other industries, such as IT industry, to attract talent
human resource.
Research DesignandMethodology
RESEARCH DESIGN
Research is a systematic process of collecting and analysing information (data) in order to
increase our understanding of the phenomenon about which we are concerned or interested.
AResearch Design is the framework or plan for a study which is used as a guide in collecting
and analysing the data collected. It is the blue print that is followed in completing the study.
The basic objective of research cannot be attained without a proper research design. It
specifies the methods and procedures for acquiring the information needed to conduct the
research effectively. It is the overall operational pattern of the project that stipulates what
information needs to be collected, from which sources and by what methods
RESEARCH METHODOLOGY
TYPE OF DATA COLLECTED
There are two types of data used. They are primary and secondary data. Primary data is
defined as data that is collected from original sources for a specific purpose. Secondary data
is data collected from indirect sources.
PRIMARY SOURCES
These include the survey or questionnaire method, as well as the personal interview methods
of data collection.
SECONDARY SOURCES
These include books, the internet, company brochures, the company website, competitors
websitesetc., newspaper articles etc.
SAMPLING PLAN
Sampling refers to the method of selecting a sample from a given universe with a view to
draw conclusions about that universe. A sample is a representative of the universe selected for
study. The sample size is 50
Sales
6%
14% CANARA BANK
SBI
HDFC
20% 60% OTHER
Q2. Are you aware of products & services provided by CANARA BANK?
Option response Percentage
YES 35 70
No 15 30
graph2
yes no
30%
70%
50% 50%
11%
20%
69%
Interpretation:
In this survey 69% of customer can satisfied with Canara bank services because of Canara
can provide core services. Also 20% of customer cannot satisfied with services & rest, 11%
cannot decide anything
10%
30%
60%
10%
30%
60%
20%
80%
CONCLUSION&SUGGESTION
CONCLUSION
The study allowed us get answers regarding the service awareness among people and the
problems it faces. The key findings and analysis of the survey showed the following
A large number of clients and customers call the branch frequently to handle banking
issues; this shows the keenness of the customers to call the branch for almost every
small issue. The service Straight2bank does provide an answer to the problem of the
customers. The service provided by staright2bank does offer the main requirements of
the customers for which they visit or call the branch
All the respondents wanted to carry out the banking needs at their convenience. This
means the service caters the banking needs that customers generally require and its
main benefit of banking while sitting at office is desired by one and all, thereby
proving that the service does have the potential usage.
Few of the respondents were aware about the service which was desired by
100%respondents clearly showing that there has been a falter in its promotion
and awareness strategies.
Customers were not aware that the service was a free one, this is clear that almost all
the attributes of the services are favourable to the customers still customers are not
using the service and are not even aware of it.
Almost all customers once educated about the service readily enrolled for it whereas
amere portion did not trust the bank and thought that the bank would have some
hidden charges that they are not putting forward
Many clients who enrolled for the staright2bank service would have problems using it as
the drop boxes are not strategically placed many areas do not even have drop box facility;
State Bank must look into the policies of installing the drop box. They should assign it to
the regional office or allow branches to put up boxes where the branch thinks it would be
optimally utilized no matter which area of the city as of now that branches are allowed
to put up drop boxes in a radius which falls in close by areas to the branch. A customer
who lives close by to the branch would not use this service whereas customers who are
far of require the service, however the branch cannot provide them with the facility as
they cannot install the boxes in that area and it is the duty of the local branch of that area
to put up boxes which is not happening they hardly know where customers of the
other branch are located
SUGGESTIONS
We suggest following measures, which State Bank could take so as to take on heavy
competition from HSBC Bank and ABN AMRO Bank:
Try to reduce cost, so that benefits can be passed on to customers. Senior managers at
SBI keep on telling that it is difficult to reduce cost, because of services we provide.
But the fact is, India being a price sensitive market; people at times go for monetary
benefits rather than for long-term non- monetary benefits. If charges cant be reduced
because of costs involved, make the services customized, so that services are provided
to only those customers who are willing to pay the price for services they are getting
and let the other customers enjoy costs benefits without getting services.
SBI should provide competitive prices as nowadays a lot business is being acquired
by AXIS bank and HSBC bank and SBI is facing a lot competition from these banks
SBI should contact with their clients regularly for knowing the problems faced by
them. This will help SBI in providing best services to customers. This will result in
additional customer base by getting further references from satisfied clients.
SBI should focus on getting the business other business clients other than its existing
customers as it would help them to increase their business opportunities.