Professional Documents
Culture Documents
1
Industry Profile
Introduction
Banking in India originated in the last decades of the 18th century. The first banks
were The General Bank of India, which started in 1786, and Bank of Hindustan,
which started in 1790; both are now defunct. The oldest bank in existence in India is
the State Bank of India, which originated in the Bank of Calcutta in June 1806, which
almost immediately became the Bank of Bengal. This was one of the three presidency
banks, the other two being the Bank of Bombay and the Bank of Madras, all three of
which were established under charters from the British East India Company. For
many years the Presidency banks acted as quasi-central banks, as did their successors.
The three banks merged in 1921 to form the Imperial Bank of India, which, upon
India's independence, became the State Bank of India in 1955.
Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The
Comptoire d'Escompte de Paris opened a branch in Calcutta in 1860, and another in
Bombay in 1862; branches in Madras and Pondicherry, then a French colony,
followed. HSBC established itself in Bengal in 1869. Calcutta was the most active
trading port in India, mainly due to the trade of the British Empire, and so became a
banking center.
Around the turn of the 20th Century, the Indian economy was passing through a
relative period of stability. Around five decades had elapsed since the Indian Mutiny,
and the social, industrial and other infrastructure had improved. Indians had
established small banks, most of which served particular ethnic and religious
communities.
The period between 1906 and 1911, saw the establishment of banks inspired by the
Swadeshi movement. The Swadeshi movement inspired local businessmen and
political figures to found banks of and for the Indian community. A number of banks
established then have survived to the present such as Bank of India, Corporation
Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India.
2
The fervor of Swadeshi movement lead to establishing of many private banks in
Dakshina Kannada and Udupi district which were unified earlier and known by the
name South Canara (South Kanara) district. Four nationalized banks started in this
district and also a leading private sector bank. Hence undivided Dakshina Kannada
district is known as "Cradle of Indian Banking".
The Government of India initiated measures to play an active role in the economic life
of the nation, and the Industrial Policy Resolution adopted by the government in 1948
envisaged a mixed economy. This resulted into greater involvement of the state in
different segments of the economy including banking and finance.
The Reserve Bank of India, India's central banking authority, was established in
April 1934, but was nationalized on January 1, 1949 under the terms of the
Reserve Bank of India (Transfer to Public Ownership) Act, 1948.
In 1949, the Banking Regulation Act was enacted which empowered the Reserve
Bank of India (RBI) "to regulate, control, and inspect the banks in India."
The Banking Regulation Act also provided that no new bank or branch of an
existing bank could be opened without a license from the RBI, and no two banks
could have common directors.
By the 1960s, the Indian banking industry had become an important tool to facilitate
the development of the Indian economy. At the same time, it had emerged as a large
employer, and a debate had ensued about the nationalization of the banking industry.
Indira Gandhi, then Prime Minister of India, expressed the intention of the
Government of India in the annual conference of the All India Congress Meeting in a
paper entitled "Stray thoughts on Bank Nationalization." The meeting received the
paper with enthusiasm. Thereafter, her move was swift and sudden. The Government
of India issued an ordinance and nationalized the 14 largest commercial banks with
effect from the midnight of July 19, 1969.
3
delivery. With the second dose of nationalization, the Government of India controlled
around 91% of the banking business of India.
In the early 1990s, the then Narasimha Rao government embarked on a policy of
liberalization, licensing a small number of private banks. These came to be known as
New Generation tech-savvy banks, and included Global Trust Bank (the first of such
new generation banks to be set up), which later amalgamated with Oriental Bank of
Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This
move, along with the rapid growth in the economy of India, revitalized the banking
sector in India, which has seen rapid growth with strong contribution from all the
three sectors of banks, namely, government banks, private banks and foreign banks.
In the private banking sector of India, FDI is allowed up to a maximum limit of 74%
of the paid up capital of the Bank. On the other bank, FDI and Portfolio investment in
the public or nationalized banks in India all subject to a limit of 20% of totality. This
ceiling is also applicable to the investment in the SBI and its associates.
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.
The Rs. 64 trillion (US$ 1.22 trillion) Indian banking industry has made exceptional
progress in last few years, even during the times when the rest of the world was
struggling with financial meltdown. Even today, financial institutions across the world
are facing the repercussions of the turmoil but the Indian ones are standing stiff under
the regulator's watchful eye and hence, have emerged stronger.
4
Ratings agency Moody's believe that strong deposit base of Indian lenders and
Government's persistent support to public sector and private banks would act as
positive factors for the entire system amidst the negative global scenario.
The sector has undergone significant developments and investments in the recent past.
Some of them are discussed hereafter along with the key statistics and Government
initiatives pertaining to the same.
Key Statistics
5
Recent Developments
Recently, depreciation of partially convertible Indian Rupee against US Dollar has left
Indian importer high and dry, more particularly those who have not hedged their
dollar exposures. The unexpected depreciation of Rupee against US Dollar this year
by over 17 percent has caused a great concern for the Government, RBI and corporate
of India. On November 22, 2011 Indian Rupee has touched historic low of 52.73
before recovering little in next sessions.
Since late 2009, sovereign debt crisis brewed in Europe concerning some euro zone
states and the situation became tense in early 2010 with the downgrading of Greek
debt rating by global credit rating agencies to ‘Junk’ status with hints of default by the
Greek Government. The situation became further grave recently in October 2011 with
Greek coalition government headed by George Papandreou first announcing and then
ditching a plan for a referendum on a euro zone bailout package to limit the damage
from the currency bloc’s debt crisis with a deal in which the private sector was to
agree to voluntarily accept a nominal 50 percent cut in its bond investments to reduce
Greece’s debt burden by 100bn Euros, cutting its debts to 120 percent of GDP by
6
2020, from 160 percent at present. Besides forcing the investing banks to accept a
haircut of 50 percent on Greek debt the deal, reached after prolonged hard-nosed
negotiations between investing bankers, head of states and the IMF, also proposes to
enlarge the European Financial Stability Facility (EFSF) war chest from €440bn to €1
trillion and requires European banks to find more capital against their losses on Greek
debt.
With cash in its treasury expected to last just over five weeks, Greece has been
plunged into a fresh bout of uncertainty with political differences in that country,
refusal of strong European countries to cough up more for the bailout, and G20
nations demanding more details of the rescue package declared on Oct 27, 2011
before they commit fresh cash to IMF, which could then lend to Europe’s bailout
facility.
7
Company Profile
Canara Bank was founded by Shri Ammembal Subba Rao Pai, a great visionary and
philanthropist, in July 1906, at Mangalore, then a small port in Karnataka. The Bank
has gone through the various phases of its growth trajectory over hundred years of its
existence. This small seed blossomed into a limited company as 'Canara Bank Ltd.' in
1910 and became Canara Bank in 1969 after nationalization. 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. Canara Bank
has an unbroken record of profits since its inception.
Canara is India’s fifth largest bank in terms of asset size; as on March 31, 2010, it had
an asset base of around Rs 2.6 trillion. The bank’s strong market position is
underpinned by its market share of over 4.8% in deposits and advances, and its
pan‐India branch network.
The new brand identity for Canara Bank is based on the idea of a bond and is a
representation of the close ties between the Bank and its many stakeholders – from
customers and employees to investors, institutions and society at large. With its rich
achieve their goals. The two seamlessly connected links capture the essence of this
partnership.
8
Significant Milestones
Year
1st July Canara Hindu Permanent Fund Ltd. formally registered with a capital of 2000
1906 shares of 50/- each, with 4 employees.
1910 Canara Hindu Permanent Fund renamed as Canara Bank Limited.
1969 14 major banks in the country, including Canara Bank, nationalized on July 19.
1976 1000th branch inaugurated.
Overseas branch at London inaugurated Cancard (the Bank’s credit card)
1983
launched.
1984 Merger with the Laksmi Commercial Bank Limited.
1985 Commissioning of Indo Hong Kong International Finance Limited.
1987 Canbank Mutual Fund & Canfin Homes launched.
1989 Can bank Venture Capital Fund started.
1989-90 Can bank Factors Limited, the factoring subsidiary launched.
Became the first Bank to articulate and adopt the directive principles of “Good
1992-93
Banking”.
Became the first Bank to be conferred with ISO 9002 certification for one of its
1995-96
branches in Bangalore.
Opened a 'Mahila Banking Branch', first of its kind at Bangalore, for catering
2001-02
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.
Entered 100th Year in Banking Service. Launched Core Banking Solution in
2005-06 select branches. Number One Position in Aggregate Business among
Nationalized Banks.
Retained Number One Position in Aggregate Business among Nationalized
Banks. Signed MoUs for Commissioning Two JVs in Insurance and Asset
2006-07
Management with international majors’ viz., HSBC (Asia Pacific) Holding and
Robeco Groep N.V respectively.
Launching of New Brand Identity. Incorporation of Insurance and Asset
2007-08
Management JVs. Launching of 'Online Trading' portal. Launching of a ‘Call
9
Centre’. Switchover to Basel II New Capital Adequacy Framework.
The Bank crossed the coveted 3 lakh crores in aggregate business. The Bank’s
2008-09
3rd foreign branch at Shanghai commissioned.
The Bank’s aggregate business crossed 4 lakh crores mark.
2009-10 Net profit of the Bank crossed 3000 crores. The Bank’s branch network
crossed the 3000 mark.
The Bank’s aggregate business crossed 5 lakh crores mark. Net profit of the
Bank crossed 4000 crores. 100% coverage under Core Banking Solution. The
Bank’s 4th foreign branch at Leicester and a Representative office at Sharjah,
2010-11
UAE, opened. The Bank raised 1993 crores under QIP. Govt. holding reduced
to 67.72% post QIP. As at December 2011, the total business of the Bank stood
at 534710 crores.
10
Nature of the business carried
Canara bank, being a major public sector banks in India, is well known for its banking
operations. It provides various products and services to customers in the banking
industry. Other than banking operations it also provides Foreign Business, Asset
Management, Financial Services, Securities Market, Computer Services, Home
Loans, Corporate Cash Management Services, Factoring, Venture Capital Fund,
Mercantile Banking, and Insurance Banking to the various customers in India as well
as in abroad.
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.
Quality Statement
“The branches will provide total banking services and continually review and improve
the processes for total customer satisfaction by quality management system
requirements as per ISO 9001:2000”
11
Products and Services
I. Personal Banking
2. Loan Products
a. Housing Loan
b. Canara Mobile (Vehicle)
c. Canara pension
d. Canara rent (To provide loans to owners of the property to meet
their business needs and / or genuine personal needs, against rents
receivable)
e. Canara Jeevan (Reverse Mortgage Loan (RML) scheme for senior
citizens)
f. Home improvement loan
g. Canara site loan
h. Teachers loan
12
i. Canara Mortgage
j. Doctors choice
k. Canara cash (Shares)
l. Canara Budget (For employed/Business)
m. Swarna Loan (Gold Loan)
n. Canara guide (Loan scheme to finance individuals possessing a
valid certificate to practice as a Tax Return Preparer (TRP) as per
the scheme formulated by the Ministry of Finance, Government of
India for preparation of income tax returns)
o. Education Loan
3. Technology Products
a. Transactions Through the Bank ATMs And Other Bank ATMs
b. Purchase Of Goods And Services At POS Merchant Establishments
c. Mobile Top up
d. VISA Money transfer
e. E-Ticketing
4. Mutual Funds
5. Insurance Products
6. International services
7. Credit card services
8. Depository services
9. Ancillary services
a. Sale of Gold coins
b. Safe deposit locker
c. Safe custody services
13
III. NRI Remittance Facility
1. Deposit Products
2. Loans & Advances
3. Remittance Facilities
4. Consultancy Services
IV. Internet Banking
V. Priority & SME Banking
1. Agriculture And Rural Credit Schemes
2. Education Loan And Other Priority Sector Loans
3. Government Sponsored Schemes
4. Lead Bank Activities
5. Lending to minority communities
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.
14
Ownership Pattern
The data is category wise as on 31/03/2011. Nominal value of each share is Rs. 10.
15
Competitors Information
Both Public sector and Private sector banks are competitors for the Bank. The local
financial organization and money lenders along with the multinational banks are also
giving strong competitions to the Bank. Following table shows the Deposits,
Investments and Advances of the 19 Public sector banks and SBI and its associates as
on 31st March, 2011.
(Rs. in crores)
S. No. BANKS Deposits Investments Advances
I NATIONALISED BANKS
1 Allahabad Bank 131,887 43,247 93,625
2 Andhra Bank 92,156 24,204 71,435
3 Bank of Baroda 305,439 74,018 228,676
4 Bank of India 298,886 85,872 213,096
5 Bank of Maharashtra 66,845 22,491 46,881
6 Canara Bank 293,973 83,700 212,467
7 Central Bank of India 179,356 54,504 129,725
8 Corporation Bank 116,747 43,453 86,850
9 Dena Bank 64,210 18,769 44,828
10 Indian Bank 105,804 34,784 75,250
11 Indian Overseas Bank 145,229 48,610 111,833
12 Oriental Bank of Commerce 139,054 42,075 95,908
13 Punjab & Sind Bank 59,723 18,644 42,638
14 Punjab National Bank 312,899 95,162 242,107
15 Syndicate Bank 135,596 35,068 106,782
16 UCO Bank 145,278 42,927 99,071
17 Union Bank of India 202,461 58,399 150,986
18 United Bank of India 77,845 26,259 53,502
19 Vijaya Bank 73,248 25,139 48,719
Total 2,946,636 877,326 2,154,380
II State Bank of India (SBI) 933,933 295,601 756,719
III ASSOCIATES OF SBI
1 State Bank of Bikaner & Jaipur 53,852 13,521 41,207
2 State Bank of Hyderabad 88,628 28,447 64,720
3 State Bank of Indore
4 State Bank of Mysore 43,225 12,927 34,030
5 State Bank of Patiala 68,066 17,275 51,433
6 State Bank of Travancore 58,158 17,927 46,044
16
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).
17
Know Your Customer (KYC)
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.
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).
4. Printing and dispatch of Thanks giving letters to new account holders and
introducers are done centrally at Zonal/Circles Offices.
18
Awards & Achievements
Canara Bank was awarded coveted Skoch award for financial inclusion on
5.01.2012 at New Delhi. The award was handed over by Dr. C. Rangarajan,
Chairman Prime Ministers’ Economic Advisory Council to Smt. Archana
Bhargava, Executive Director, Canara Bank in a glittering function held at New
Delhi. The other dignitaries present on the occasion were Dr. D. Damodaran
Former Chairman SEBI, Dr. Govinda Rao, and Mr. Yogesh Aggarwal, Chairman
PFRDA. A certificate of merit was handed over to S. S. Bhat, General Manager
Financial Inclusion Wing for Canara Banks role in providing Access to Banking
and Financial Services. Citation reads as "Canara Bank has a hand in every arena
when it comes to promoting financial inclusion through skilling and self
employment. During last one year it has shown significant improvement in its
financial inclusion efforts.
The Bank was conferred with National Award - 2011 for excellence in the field of
Khadi and Village Industries - Best Bank, South Zone for PMEGP (Prime
Ministers Employment Generation Program).
Corporate Social Responsibility Award-2011.
19
Specific achievements pertaining to recovery wing are as follows:
1. Cash recovery of rs.750 crores achieved during June 2011 quarter which is all
time high for any particular quarter.
2. On line auction of secured assets introduced and implemented under sarfaesi.
20
Work Flow Model
Customer Inquiry
New Existing
Officer/Manager explains
rules of business/Bank
requirements and Reject
compliance to KYC
guidelines.
Request for fund transfer
from SB A/c to Deposit A/c
Acceptance by manager
and authorize to open
21
Flow chart for Advances
Customer Inquiry
New Existing
e. Sanction
22
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.
23
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.
24
Strategy:
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
25
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.
26
Shared Values:
"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"
27
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 21 st 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.
28
Financial Statements
(Rs. In Crores)
Sl.
No. Particulars 31.03.2011 31.03.2010
1 Interest Earned (a)+(b)+(c)+(d) 23064.02 18751.96
(a) Interest/discount on advances/bills 17051.85 13946.43
(b) Income on Investments 5788.01 4577.99
(c) Interest on balances with Reserve Bank of India &
Other Inter-Bank Funds 223.3 210.42
(d) Others 0.86 17.12
2 Other Income 2703.03 2857.9
3 Total Income (1+2) 25767.05 21609.86
4 Interest Expended 15240.74 13071.43
5 Operating Expenses (I)+(ii) 4419.31 3477.62
(I) Employees Cost 2954.84 2193.7
(ii) Other Operating Expenses 1464.47 1283.92
Total Expenses ((4+5) excluding Provisions &
6 Contingencies) 19660.05 16549.05
Operating Profit before Provisions and Contingencies
7 (3-6) 6107 5060.81
8 Provisions (Other than Tax) and Contingencies 1081.11 1239.38
9 Exceptional items 0 0
Profit (+) / Loss (-) from Ordinary Activities before tax
10 (7-8-9) 5025.89 3821.43
11 Tax expense 1000 800
Net Profit (+) / Loss (-) from Ordinary Activities after
12 tax (10-11) 4025.89 3021.43
13 Extraordinary items (net of tax expense) 0 0
14 Net Profit (+) / Loss (-) for the period (12-13) 4025.89 3021.43
29
Paid up Equity Share Capital (Face Value of each share-
15 Rs.10/-) 443 410
16 Reserves excluding Revaluation Reserves 17498.46 12129.1
17 Analytical Ratios
(i) Percentage of shares held by Government of India 67.72% 73.17%
(ii) Capital Adequacy Ratio 15.38% 13.43%
(iii) Earnings per Share (EPS) (Not Annualized)
a) Basic and diluted EPS before Extraordinary items (net
of tax expense) for the period, for the year to date and for the
previous year 97.83 73.69
b) Basic and diluted EPS after Extraordinary items for
the period, for the year to date and for the previous year 97.83 73.69
(iv) NPA Ratios
(a) Amount of Gross Non Performing Assets 3089.21 2590.31
(b) Amount of Net Non Performing Assets 2347.33 1799.7
(c) Percentage of Gross Non Performing Assets 1.45% 1.52%
(d) Percentage of Net Non Performing Assets 1.11% 1.06%
(v) Return on Assets (Annualized) 1.42% 1.30%
18 Public shareholding
- Number of Shares 143000000 110000000
- Percentage of shareholding 32.28% 26.83%
19 Promoters and promoter group shareholding NIL
- Number of shares 300000000 300000000
- Percentage of shares (as a % of the total shareholding of
promoter and promoter group) 100.00% 100.00%
- Percentage of shares (as a % of the total share capital of the
Company) 67.72% 73.17%
30
Balance Sheet as on 31.3.2011
(`Rs. in Crores)
As on As on
31.03.2011 31.03.2010
Capital and liabilities
Capital 443 410
Reserves and surplus 19596.82 14261.8
Deposits 293972.65 234651
Borrowings 14261.65 8440.56
Other liabilities and provisions 7804.64 6977.3
Total 336078.76 264741
Assets
Cash & balances with reserve bank of
India 22014.79 15719.5
Balances with banks and money at call
And short notice 8693.32 3933.75
Investments 83699.92 69677
Advances 212467.17 169335
Fixed assets 2844.41 2859.37
Other assets 6359.15 3216.92
TOTAL 336078.76 264741
31
Segment wise results
(Rs. In crores)
Business Segment 31.03.2011 31.03.2010
(a) Segment Revenue
1 Treasury Operations 6249.48 5477.69
2 Retail Banking Operations 6700.99 5646.6
Wholesale Banking
3 Operations 12220.51 10041.64
4 Other Banking Operations 0 0
5 Unallocated 596.07 443.93
Total 25767.05 21609.86
(b) Segment Results
1 Treasury Operations 869.61 1346.85
2 Retail Banking Operations 2207.25 1664.16
Wholesale Banking
3 Operations 2652.26 1999.24
4 Other Banking Operations 0 0
Total 5729.12 5010.25
Unallocated
(c) Income/Expenses 377.88 50.56
(d) Operating Profit 6107 5060.81
Provisions and
(e) Contingencies 1081.11 1239.38
(f) Income Tax 1000 800
(g) Net Profit 4025.89 3021.43
(h) Other Information
(i) Segment Assets
1 Treasury Operations 108292.57 87199.12
2 Retail Banking Operations 60302.3 51555.25
Wholesale Banking
3 Operations 160148.44 121344.65
4 Other Banking Operations 0 0
5 Unallocated Assets 5237.09 2509.39
Total 333980.4 262608.41
(j) Segment Liabilities
1 Treasury Operations 47011.06 39833.45
2 Retail Banking Operations 124960.75 123063.48
Wholesale Banking
3 Operations 125895.27 76290.47
4 Other Banking Operations 0 0
5 Unallocated Liabilities 18171.86 10881.9
6 Capital and Reserves 17941.46 12539.11
Total 333980.4 262608.41
32
(Rs. In Crores)
Geographical Segment 31.03.2011 31.03.2010
a Domestic Operations
Revenue 25448.69 21299.71
Assets 318377.28 252609.97
b International Operations
Revenue 318.36 310.15
Assets 15603.12 9998.44
c Total
Revenue 25767.05 21609.86
Assets 333980.4 262608.41
33
Learning Experience
The project work was carried out at Canara Bank gave me a lot of insight into the
practical working of a Bank. I could understand the various functions of an
organization like, Planning, Organizing, Directing, Controlling and Staffing. I learned
the various methods used to assess the working capital of firms, companies etc. and
the various forms of working capital extended to organizations.
I understood various services provided by the Bank apart from the basic functions of
accepting deposits and lending loans and learnt about the technology used in the Bank
to provide quality, secure and faster services. I also learned the workflow for
accepting deposits and providing loans and various strategies, policies and systems
adopted by the Bank.
34
Statement of the problem
The scope of the study was related to the various methods used by Canara bank. The
procedures adopted by the Bank for sanctioning the working capital have been
explained with the help of different case studies. The parameters to be analyzed for
sanctioning or renewing the credit limit are explained.
35
Methodology
Research Design
Nature of Data
Secondary Data was personally collected from the Bank’s internal sources, official
records, annual reports, the Bank’s website, data released by RBI in its website and
management books.
1. Though there was interaction with the Bank employees, more data was taken
from secondary sources made available by the Bank.
2. The identity of the real borrower in the case study has been concealed as per
the Banks requirement for maintaining the confidentiality.
3. The conclusion and interpretations drawn are based on few cases. Anyhow,
different cases would have different situation.
4. Canara Bank has 34 circle offices but study was confined to only Bangalore
rural Circle Office, covering 97 branches.
36
Analysis and Interpretation
Working capital
A company can be endowed with assets and profitability but short of liquidity if its
assets cannot readily be converted into cash. Positive working capital is required to
ensure that a firm is able to continue its operations and that it has sufficient funds to
satisfy both maturing short-term debt and upcoming operational expenses. The
management of working capital involves managing inventories, accounts receivable
and payable, and cash.
Operating cycle
It is the average length of time between when a company purchases items for
inventory and when it receives payment for sale of the items. A long operating cycle
tends to harm profitability by increasing borrowing requirements and interest expense.
The Operating Cycle determines the amount of working capital that a business
requires to operate on a day-to-day basis. The shorter the Operating Cycle the lower
the amount of working capital required for the business and the greater opportunity
for investments in other value-adding activities. The following diagram shows the
operating cycle.
37
Current Assets
Current asset is represents the value of all assets that can reasonably be expected to be
converted into cash within one year in the normal course of business. Current assets
include cash, accounts receivable, inventory, marketable securities, prepaid expenses,
and other liquid assets that can be converted readily to cash.
Current Ratio
Current ratio is liquidity ratio that measures a company's ability to pay short-term
obligations. Also known as "liquidity ratio", "cash asset ratio" and "cash ratio". The
Current Ratio formula is:
The ratio is mainly used to give an idea of the company's ability to pay back its short-
term liabilities (debt and payables) with its short-term assets (cash, inventory,
receivables). The higher the current ratio, the more capable the company is of paying
its obligations.
38
The benchmark current ratio for borrowers whose working capital limits are assessed
under MPBF & Cash Budget system is 1.33. However in respect of those parties
whose working capital limits ate assessed based on Turnover method is 1.25.
If the current ratio is less than the bench mark of 1.33 (MPBF/Cash budget system) or
1.25 (Turnover Method) for the concerned financial year, but not less than 1, the
limits may be permitted/renewed/enhanced by the respective sanctioning authority
within the delegated powers.
If the current ratio is less than 1 the sanctioning authority can permit only renewal of
the existing limits, based on his/her delegated powers, subject to normal appraisal
norms being followed. However in respect of accounts falling under the sanctioning
powers of Executive Director/Chairman and Managing Director, the same can be
permitted by the respective sanctioning authority.
39
The Bank considers the following factors for assessing the working
capital
The investment in current assets should be just adequate to the needs of the firm. Both
excess working capital and inadequate working capital are dangerous to the firm.
1. Low returns on investment as excess funds in current assets remains idle and
earn nothing.
2. There is possibility of over capitalization. A firm having excess working
capital may be tempted to invest heavily on fixed assets that may not be
justified by its actual sales. This results in lower rate of return.
3. It results in unnecessary accumulation of inventories. Thus chances of
inventory mishandling increases.
4. Excessive working capital makes management complacent. This may lead to
management inefficiency.
5. It is an indication of defective working capital policy. It indicates firm’s
inability to utilize the available resources productively.
40
Problems of inadequacy
41
Mode of Security
1. Hypothecation
Under this, bank provides credit against the security of movable property, usually
the inventory of goods. The hypothecated goods continue to be in the possession
of the borrower, but the Bank has legal right to realize the outstanding notes.
2. Pledge
Goods offered are transferred to the physical position of the lender. The goods
will be in the custody of the lender. However, the Bank has to take reasonable
care of thee goods. In case of the nonpayment by the borrower, the Bank has the
right to sell the goods.
3. Mortgage
4. Charge
Whenever proposals from a corporate entity are received, the financing bank
before sanctioning any credit facility is expected to inspect the Register of
Charges to find out whether the proposed properties/assets to be charged to the
Bank are unencumbered or not. Register for applications pending registration
should also be looked into.
5. Margin money
Banks do not provide 100% finance. They insist that customers should bring a
portion of required finance from other sources. This amount is called as
Margin Money.
42
Forms of Bank Finance
1. Book debts
2. Bills discounting
1. Letter of credit
2. Bank guarantees
3. Advance payment guarantees
4. Co-acceptance
43
I. Inventory Limits
Open Cash Credit scheme (OCC) is a running credit facility to Micro, Small &
Medium Sector entrepreneurs against stocks and receivables. Assessment limit
depends on the working capital requirement of the unit assessed as per turnover
method/MPBF System/Cash Budget System. OCC is granted against the
hypothecation of Raw materials, WIP, Finished Goods and Receivables.
Drawings from the account is against Drawing limit arrived based on stocks such
as raw materials, work-in-process, finished goods and receivables. Whenever
required, Overdraft against Book debts is also permitted against book debt of
specific age arising out of genuine trade transactions with Government/Public
Sector Undertakings/Joint Stock Companies/firms of repute.
Prime security are Stocks, Receivables and Collateral securities are Land and
building, plant and machinery plus personal guarantee is obtained whenever
applicable.
2. Simplified OCC
Simplified OCC is a liberalized credit facility to Small Entrepreneurs who are not
in a position to maintain detailed stock books. Purpose is to provide working
capital needs of Small Enterprises units. This Facility is available as Running
Limit. Maximum limit available is Rs. 5 Lakhs only.
Prime securities are assets created out of the credit facility and no collateral
security for loans up to Rs.5 Lakhs.
This scheme is meant for tiny retail traders and small business enterprises like
petty shop keepers who are not able to comply with the requirements laid down
even under the SOCC scheme such as maintenance of stock books, submission
44
statements etc. The maximum amount of credit facility is Rs. 25,000 per borrower.
Stock statements should be submitted once in a year as at 31st March, every year.
4. Produce loan
6. Packing Credit
Packing Credit is any loan or advance granted or any other credit provided by the
Bank to an exporter for financing the purchase, processing, manufacturing or
packing of goods prior to shipment, on the basis of letter of credit opened in his
favor or in favor of some other person, by an overseas buyer or a confirmed and
irrevocable order for the export of goods from the producing country or any other
evidence of an order for export from that country having been placed on the
exporter or some other person, unless lodgment of export orders or letter of credit
with the bank has been waived.
7. Overdraft
Overdraft is an extension of credit from the Bank when an account reaches zero.
An overdraft allows the customers to continue withdrawing money even if the
account has no funds in it. Basically the bank allows people to borrow a set
amount of money.
45
II. Finance against receivables
1. Book debts
A book debt is a sum of money due to a business in the ordinary course of its
business. It has been described as a debt that would normally be entered in the
books of the business regardless of whether or not it is in fact entered. Book debts
include sums owed to a business for goods or services supplied or work carried
out.
2. Bills discounting
While discounting a bill, the Bank buys the bill (i.e. Bill of Exchange or
Promissory Note) before it is due and credits the value of the bill after a discount
charge to the customer's account. The transaction is practically an advance against
the security of the bill and the discount represents the interest on the advance from
the date of purchase of the bill until it is due for payment
1. Letter of Credit
An inland letter is one in which is opened by a Bank at the request of its customer
(Buyer) in favor of the seller in the same country.
2. Bank guarantee
46
3. Advance payment guarantee
4. Co-acceptance
The banks constituent strikes deal with his seller to sell goods on credit by
drawing usance bill of exchange. The seller draws the bills, they are accepted by
the buyer and then co accepted by the buyer’s banker. The supplier gets the
proceeds immediately by discounting the co accepted bills with his banker.
Any borrower irrespective of the size of the credit limits can seek this facility. It is
not necessary that the borrower should enjoy cash credit facilities with the bank.
However, if the borrower does not have any credit facilities, the branch should at,
the time of recommending this facility, ensure that proper arrangements are made
for retiring the bills. Adequate balance should be available in the current account
for retiring the bills.
Following are the short term facilities that are permitted, selectively, to top rated
borrowers, PSU, MNCs etc as per the guidelines evolved by the bank from time to
time.
47
Credit limits could be made available in any of the following methods as required:
1. Sole banking
Under this, the entire requirements of the borrower are met by one bank only.
Borrowers can avail any credit facilities from any banks without a formal
consortium arrangement. So long as the total credit limits enjoyed by a borrower
from the bank is within the permissible resources of a single bank, or within the
prudential exposure norms, such facilities can be extended by individual banks
without a formal consortium under the Multiple Banking Arrangement.
3. Consortium Arrangement
When the amount involved is very large and beyond the permissible resources of a
single bank or beyond what a single bank would like to risk under ordinary
circumstances on a single borrower beyond the prudential exposure norms.
4. Syndication
48
Assessment of working capital
Norms for Working capital assessment are made depending upon the quantum of
finance required, segment of the borrower, prevailing mandatory instructions by RBI
and trade and industry practice prevailing.
Methods of assessment
1. Turnover Method
2. Maximum Permissible Bank Finance
3. Cash Budget system
49
1. Turnover Method
For SSI borrowers, fund based working capital facilities are assessed up to Rs. 5
crores under Turnover Method or MPBF system at the option of the borrower. For
non SSI borrowers, fund based working capital limit up to Rs. 2 crores can be
assessed under this method.
This system is made applicable to traders, merchants and exporters who are not
having a pre determined manufacturing/trading cycle. However, even such
borrowers can opt for MPBF system, if the same is more suitable for assessing the
working capital needs and is advantageous to them.
50
such other factors relevant to a particular unit. In case where the actual
performance of the unit exceeds the projected level accepted by the bank and the
assessed working capital is found to be inadequate, the branches should reassess
the working capital needs of the units and additional limits should be permitted in
tune with the actual requirements of the unit.
Assessment of working capital limits over Rs. 2 crores for Non SSI borrowers and
over Rs.5 crores for SSI borrowers, but up to Rs. 25 crores is assessed based on
MPBF system. For limits of over Rs. 25 crores, credit facilities may be assessed
on the basis of MPBF or Cash Budget System, at the option of the borrower. The
assessment of credit requirement of the party is based on the total study of the
borrower’s business operations via-a-via the production/processing cycle of the
industry which shall represent a reasonable build up of current assets for being
supported by bank finance. Based on Kannan Committee recommendations RBI
has allowed freedom to the banks to decide holding levels of various components
of current assets for financial support to ensure efficient functioning of the unit.
10% of tolerance level is allowed on the assessed MPBF.
51
c. All term loan installments (FDs, Debenture, etc.) repayable within next 12 months
should be considered as current liability for computation of current ratio and
MPBF.
d. Inter Corporate Deposits are to be treated as current liability.
Tandon Committee has recommended 3 methods to arrive at the MPBF. As per the
recommendations of Tandon Committee, the corporate should be discouraged from
accumulating too much of stocks of current assets and should move towards very
lean inventories and receivable levels. The committee even suggested the maximum
levels of Raw Material, Stock-in-process and Finished Goods which a corporate
operating in an industry should be allowed to accumulate. These levels were termed
as inventory and receivable norms. Depending on the size of credit required, the
funding of these current assets (working capital needs) of the corporate could be met
by one of the following methods:
Banks can work out the working capital gap, i.e. total current assets less
current liabilities other than bank borrowings (called Maximum Permissible
Bank Finance or MPBF) and finance a maximum of 75 per cent of the gap;
the balance to come out of long-term funds, i.e., owned funds and term
borrowings. This approach was considered suitable only for very small
borrowers i.e. where the requirements of credit were less than Rs.10 lakhs.
Under this method, it was thought that the borrower should provide for a
minimum of 25% of total current assets out of long-term funds i.e., owned
funds plus term borrowings. A certain level of credit for purchases and
other current liabilities will be available to fund the buildup of current
assets and the bank will provide the balance (MPBF). Consequently, total
current liabilities inclusive of bank borrowings could not exceed 75% of
current assets. RBI stipulated that the working capital needs of all
borrowers enjoying fund based credit facilities of more than Rs. 10 Lakhs
should be appraised (calculated) under this method.
52
Third Method of Lending
Under this method, the borrower's contribution from long term funds will
be to the extent of the entire Core Current Assets, which has been defined
by the Study Group as representing the absolute minimum level of raw
materials, process stock, finished goods and stores which are in the pipeline
to ensure continuity of production and a minimum of 25% of the balance
current assets should be financed out of the long term funds plus term
borrowings. (This method was not accepted for implementation and hence
is of only academic interest).
Cash budget is an estimation of the cash inflows and outflows for a business or
individual for a specific period of time. Cash budget is a detailed plan showing how
cash resources will be acquired and used over some specific time period.
Cash budgets are often used to assess whether the entity has sufficient cash to fulfill
regular operations and/or whether too much cash is being left in unproductive
capacities. A cash budget is extremely important as it allows a company to determine
how much credit it can extend to customers before it begins to have liquidity
problems.
This method is applied where borrowers require credit facilities of over Rs. 25 crores.
MPBF system can also be applied for assessing the requirement of over Rs. 25 crores
at the option of the borrowers. However, in case of specific industries/seasonal
activities such as construction activity, tea and sugar, the system of assessment based
on cash budget is adopted.
53
Cash Flow Statement
Cash flow statement aims at highlighting the cash generated from operating
activities.
Cash flow statement helps in planning the repayment of loan schedule and
replacement of fixed assets, etc.
Cash is the centre of all financial decisions. It is used as the basis for the
projection of future investing and financing plans of the enterprise.
Cash flow statement helps to ascertain the liquid position of the firm in a
better manner.
Banks and financial institutions mostly prefer cash flow statement to analyze
liquidity of the borrowing firm.
Cash flow Statement helps in efficient and effective management of cash.
The management generally looks into cash flow statements to understand the
internally generated cash which is best utilized for payment of dividends.
Cash Flows are inflows and outflows of cash and cash equivalents. The statement of
cash flow shows three main categories of cash inflows and cash outflows, namely;
operating, investing and financing activities.
54
1. Operating activities are the principal revenue generating activities of the
enterprise. Cash flow from operating activities is primarily derived from the
principal revenue generating activities of the enterprise. A few items of cash flows
from operating activities are;
2. Investing activities include the acquisition and disposal of long term assets and
other investments not included in cash equivalents. Investing Activities refer to
transactions that affect the purchase and sale of fixed or long term assets and
investments. Examples of cash flow arising from investing activities are;
Cash sale of plant and machinery, land and Building, furniture, goodwill etc.
Cash sale of investments made in the shares and debentures of other
companies.
Cash receipts from collecting the Principal amount of loans made to third
parties.
55
3. Financing activities are activities that result in change in the size and
composition of the owner’s capital (including Preference share capital in the case
of a company) and borrowings of the enterprise. The third section of the cash flow
statement reports the cash paid and received from activities with non-current or
long term liabilities and shareholders’ Capital. Examples of cash flow arising from
financing activities are;
56
Format for Cash flow Statement for the year ended..............
G. Net cash flow from (or used in) operating activities xxx
(v) Add: cash and cash equivalent in the beginning of the year xxx
(vi) Less: cash under cash equivalent in the end of the year xxx
XXX
57
The following are to be clarified while fixing the limits based on the cash budget.
1. The cash budget is realistic and based on the operations in the business/similar
business.
2. The cash budget statement tallies with the underlying financial statements viz.
Balance Sheet and Profit and Loss A/c.
3. Outstanding bank borrowing figured in the projected Balance Sheet tallies with the
deficit as shown in the cash budget statement.
4. The closing balance of debtors is correctly arrived at summing up (Opening
balance of debtors + Credit sales-Realization of Debtors).
5. The expenses as indicated in the cash budget tallies with the expenses as reflected
in the projected Profit and Loss A/c.
The assessment of working capital limits is done based on the projected cash flow
statement, profitability statement and projected Balance Sheet. Wherever there is no
deficit in operating cycle and net deficit is only due to investing/financing cycles,
such deficit is not financed. Branches should obtain the required details at least one
month before the commencement of the year for which the assessment is to be made.
58
Case Study I
The unit is engaged in anodizing aluminium panel. It gets orders on contract basis.
The company gets orders from different customers and do the anodizing process and
deliver it to the party. Anodizing is a process of coating on aluminium panels.
Working capital requirement of the unit is mainly to meet their expenses for
consumables and against amount locked up as debtors.
Working capital limit is assessed on Turnover Method. The Unit has opted for it as it
befits them. The Unit’s main activity is anodizing. The holding level of inventory is
less. The unit is satisfied with the Bank’s finance.
59
Balance Sheet of AB Coaters (P) Ltd. As on 31/3/2011
60
P & L A/c for the year ended 31/3/2011
Key Information
61
Interpretations:
There is an increase in the current ratio from .61 in 2010 to 1.21 in 2011.
Though the ratio is below the benchmark of 1.25, it is satisfactory.
Net worth of the company has increased by Rs. 20.18 Lakhs for the year ended
2011 due to the retention of earnings in the system.
Net working capital increased from Rs. -14.22 Lakhs to Rs. 8.96 Lakhs for the
year 2011.
Electricity and staff salary are the main expenses of the Unit.
62
Assessment of working capital
(Rs. In Lakhs)
Particulars Amount Amount
Accepted projected annual gross sales 200.00
25% of the above 50.00
Less: Minimum margin by the party
5% of projected sales 10.00
or NWC of previous year 8.98 10.00
(Whichever is higher)
Bank finance 40.00
Calculation of NWC
Calculation of NWC
(Rs. In Lakhs)
Particulars 2010 2011
Current assets
Debtors(less than 6 months) 14.72 23.47
Closing stock 4.10 5.35
Cash and Bank 0.91 4.06
Deposit 1.00 13.05
Advances 1.49 5.27
Deferred Tax 0.62 0.71
Total (A) 22.84 51.91
Current liabilities
Sundry creditors 1.71 4.19
current liabilities & Provisions 7.23 14.26
Canara Bank OD 14.30 10.67
Loan installment in 12 months 13.83 13.83
Total (B) 37.07 42.95
NWC 8.96
63
Based on MPBF
(Rs. In Lakhs)
Current Assets
Debtors 28.47
Closing stock 6
Cash 0.5
Bank 2
Deposits 15.95
Total (A) 52.92
Current liabilities
Sundry creditors 3
Current liabilities & Provisions 15
Total (B) 18
Conclusion:
Under Turnover method as well as MPBF method the customer is eligible for higher
working capital limits. However, the party has asked only for the renewal but not for
enhancement. The Bank has financed Rs. 15 Lakhs. When compared both the
methods, limit under Turnover method is more.
64
Case Study II
65
Trading and P & L A/c for the year ended 31/3/2011
66
Balance Sheet as on 31/3/2011
Key Information
67
Interpretation:
There is reduction in Net Worth from the year 2010 to 2011 as there is
increase in drawings.
Sales have increased over the previous year (66.64%).
Net profit has increased. The % of net profit to gross sales has been reduced
marginally due to increase in the operating expenses.
One of the important aspects that should be noticed is that Bank OD interest is
charged in Capital A/c instead of P & L A/c.
If the Bank OD is charged in P&L A/c, it will bring down the profit.
Investments in subsidies are shown under current assets, which are treated as
non-current assets.
Under MPBF
(Rs. In Lakhs)
Current Assets
Stocks 8.49
VAT refund 0.06
Cash 1.22
Total (A) 9.77
Current Liabilities
Audit fees 0.1
Total (B) 0.1
WC Gap (A-B) 9.67
Less: 25% of CA 2.4425
MPBF 7.2275
68
Case Study III
Margin: 35%
Purpose: To meet the working capital requirement for purchase of feed, medicine etc.
Trade activity starts from procuring day to day old chicks for the purpose of
producing and selling eggs.
Day old chicks are fed.
Birds start hatching eggs after 25th week and the life span of a bird ranges
between 68 to 75 weeks.
Stock of feed are purchased for cash and are held for 2 months.
The birds start laying eggs from the 25th week, once then unit will be receiving
the sale proceeds.
The operating cycle ends when birds lose their fertility, after which they are
sold.
69
Balance Sheet as on 31/3/2011
70
As poultry business comes under agriculture sector, the assessment is based on total
cost of the chick and expenditure.
(Rs. In Lakhs)
Particulars Amount
Chick cost (69000 chicks @128) 88.32
Stock of feed ingredients 67.13
Finished feed stock 6.74
Stock of medicines 0.98
Total Current Assets 163.17
Less: Margin 35% 57.1095
Working capital limit 65% 106.0605
71
Findings
Suggestions
1. Bank has to educate its customers especially large borrowers regarding the
various products and services of the Bank.
2. Though RBI guidelines and Right to Information details are available on the
Bank’s website, all customers will not be interested to go through them. A
better means of communication to its customers is required.
72
Conclusion
Canara Bank was established in 1906. Since then it has been successfully carrying out
its activities. The company is known for its systematic of the business. All the
departments in the organization are well equipped with the modern technology and
computers that saves time and energy. The Bank has created friendly atmosphere for
the employees and gives them freedom to work freely. The Bank also gives many
benefits from its various schemes and keeps the employees happy. It believes that
The Bank follows various methods for assessing the working capital needs of the
considered very important for the projections and accuracy is based on the level of
73