Chapter 1

Executive Summary

The report entitled A Comparative Study of Nationalized & Private

Banks with Respect to
Loan Process & Facilities for SMEs deals with loan facilities and
services for SMEs

The introduction provides the industry background, current situation &

other important information provided by the various sources, which would
assist in getting insights about the market for better strategic decision. This
project primarily focuses on the areas of the various loan provisions by
Nationalized and Private Banks for SMEs. Most of our work was done by
personally visiting the employers and the institutes along with the
supportive information from the secondary sources available on internet.

The project report highlights the basics of credit ratings with more detailed
emphasis is given on the SME rating. The process for SME and the
parameters to be considered are discussed in detail. We also discuss the
benefits of SME to the banks. Small and Medium Enterprises (SMEs) play a
very significant role in the economy in terms of balanced and sustainable
growth, employment generation, development of entrepreneurial skills and
contribution to export earnings. However, despite their importance to the
economy, most SMEs are not able to stand up to the challenges of
globalization, mainly because of difficulties in the area of financing. With
the opening up of the Indian economy, it has become necessary to consider
measures for smoothening the flow of credit to this sector
In India, MSME is the most important employment-generating sector and is
an effective tool for promotion of balanced regional development. This
sector is the second largest manpower employer, after agriculture. This
sector employs an estimated 60 million persons. Banks cannot lend money
to anybody and everybody. A bank may not be interested in financing
certain type of project because of limitations in that industry. But on the
other hand, a bank may not like to have a bad reputation for rejecting many
proposals. Thus comes the importance of Credit Appraisal A process of
assessing and analyzing loan Proposal before resources are committed to.
SME Ratings is one of the most emerging businesses for credit rating
agencies in India.

1
 Chapter 2
Introduction

2.1 Introduction to the Topic

About the Banking Sector:

Banking in India in the modern sense originated in the last decades of
the 18th century. The first banks were Bank of Hindustan (1770-1829)
and The General Bank of India, established 1786 and since defunct.

The largest bank, and the oldest still in existence, 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. 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. For many years the
presidency banks acted as quasicentral banks, as did their successors,
until the Reserve Bank of India was established in 1935.

In 1969 the Indian government nationalised all the major banks that it
did not already own and these have remained under government
ownership. They are run under a structure known as 'profit-making
public sector undertaking' (PSU) and are allowed to compete and
operate as commercial banks. The Indian banking sector is made up of
four types of banks, as well as the PSUs and the state banks; they
have been joined since the 1990s by new private commercial banks
and a number of foreign banks.

Nationalization in the 1960s

Despite the provisions, control and regulations of the Reserve Bank of
India, banks in India except the State Bank of India (SBI), continued to
be owned and operated by private persons. 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, the then Prime
2
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 ('Banking Companies (Acquisition and Transfer of
Undertakings) Ordinance, 1969') and nationalized the 14 largest
commercial banks with effect from the midnight of 19 July 1969. These
banks contained 85 percent of bank deposits in the country.
Jayaprakash Narayan, a national leader of India, described the step as
a "masterstroke of political sagacity." Within two weeks of the issue of
the ordinance, the Parliament passed the Banking Companies
(Acquisition and Transfer of Undertaking) Bill, and it received the
presidential approval on 9 August 1969.

A second dose of nationalization of 6 more commercial banks followed

in 1980. The stated reason for the nationalization was to give the
government more control of credit delivery. With the second dose of
nationalization, the Government of India controlled around 91% of the
banking business of India. Later on, in the year 1993, the government
merged New Bank of India with Punjab National Bank.[8] It was the
only merger between nationalized banks and resulted in the reduction
of the number of nationalized banks from 20 to 19. After this, until the
1990s, the nationalized banks grew at a pace of around 4%, closer to
the average growth rate of the Indian economy.

Liberalization in the 1990s

In the early 1990s, the then 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, UTI
Bank (since renamed Axis 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.

The next stage for the Indian banking has been set up with the
proposed relaxation in the norms for foreign direct investment, where
3
all foreign investors in banks may be given voting rights which could
exceed the present cap of 10% at present. It has gone up to 74% with
some restrictions.
The new policy shook the Banking sector in India completely. Bankers,
till this time, were used to the 464 method (borrow at 4%; lend at
6%; go home at 4) of functioning.

The new wave ushered in a modern outlook and tech-savvy methods

of working for traditional banks. All this led to the retail boom in India.
People demanded more from their banks and received more.

The Indian economy is on the brink of a major transformation, with

several policy initiatives set to be implemented shortly. Positive
business sentiments, improved consumer confidence and more
controlled inflation are likely to prop-up the countrys the economic
growth. Enhanced spending on infrastructure, speedy implementation
of projects and continuation of reforms are expected to provide further
impetus to growth. All these factors suggest that Indias banking
sector is also poised for robust growth as the rapidly growing business
would turn to banks for their credit needs.

Also, the advancements in technology have brought the mobile and

internet banking services to the fore. The banking sector is laying
greater emphasis on providing improved services to their clients and
also upgrading their technology infrastructure, in order to enhance the
customers overall experience as well as give banks a competitive
edge.

Many banks, including HDFC, ICICI and AXIS are exploring the option to
launch contact-less credit and debit cards in the market shortly. The
cards, which use near field communication (NFC) mechanism, will
allow customers to transact without having to insert or swipe.

As per the Reserve Bank of India (RBI), Indias banking sector is

sufficiently capitalised and well-regulated. The financial and economic
conditions in the country are far superior to any other country in the
world. Credit, market and liquidity risk studies suggest that Indian
banks are generally resilient and have withstood the global downturn
well.

4
 Indian banking industry is expected to witness better growth prospects
in 2015 as a sense of optimism stems from the Governments
measures towards revitalizing the industrial growth in the country. In
addition, RBIs new measures may go a long way in helping the
restructuring of the domestic banking industry.

Market Size
The Indian banking system consists of 26 public sector banks, 25
private sector banks, 43 foreign banks, 56 regional rural banks, 1,589
urban cooperative banks and 93,550 rural cooperative banks, in
addition to cooperative credit institutions. Public-sector banks control
nearly 80 percent of the market, thereby leaving comparatively much
smaller shares for its private peers.

As of November 11, 2015, 192.1 million accounts had been opened

under Pradhan Mantri Jan Dhan Yojna (PMJDY) and 165.1 million RuPay
debit cards were issued.
These new accounts have mustered deposits worth Rs 26,819 crore
(US$ 4 billion).

Standard & Poors estimates that credit growth in Indias banking

sector would improve to 12-13 per cent in FY16 from less than 10 per
cent in the second half of CY14.

In the past few months, there have been many investments

and developments in the Indian banking sector

Global rating agency Moody's has upgraded its outlook for the Indian
banking system to stable from negative based on its assessment of
five drivers including improvement in operating environment and
stable asset risk and capital scenario.

Lok Capital, a private equity investor backed by US-based non-profit

organisation Rockefeller Foundation, plans to invest up to US$ 15
million in two proposed small finance banks in India over the next one
year.

5
 The Reserve Bank of India (RBI) has granted in-principle licences to 10
applicants to open small finance banks, which will help expanding
access to financial services in rural and semi-urban areas.

IDFC Bank has become the latest new bank to start operations with 23
branches, including 15 branches in rural areas of Madhya Pradesh.

The RBI has given in-principle approval to 11 applicants to establish

payment banks. These banks can accept deposits and remittances, but
are not allowed to extend any loans.

The Bank of Tokyo-Mitsubishi (BTMU), a Japanese financial services

group, aims to double its branch count in India to 10 over the next
three years and also target a 10 per cent credit growth during FY16.

State Bank of India has tied up with e-commerce portal Snapdeal and
payment gateway Paypal to finance MSME businesses.

The United Economic Forum (UEF), an organisation that works to

improve socioeconomic status of the minority community in India, has
signed a memorandum of understanding (MoU) with Indian Overseas
Bank (IOB) for financing entrepreneurs from backward communities to
set up businesses in Tamil Nadu

The RBI has allowed third-party white label automated teller machines
(ATM) to accept international cards, including international prepaid
cards, and said white label ATMs can now tie up with any commercial
bank for cash supply.

The RBI has allowed Indian alternative investment funds (AIFs), to

invest abroad, in order to increase the investment opportunities for
these funds.

In order to boost the infrastructure sector and the banks financing long
gestation projects, the RBI has extended its flexible refinancing and
repayment option for long-term infrastructure projects to existing ones
where the total exposure of lenders is more than Rs 500 crore (US$
75.1 million).

RBI governor Mr Raghuram Rajan and European Central Bank President

Mr Mario Draghi have signed an MoU on cooperation in central
banking. The memorandum of understanding provides a framework
for regular exchange of information, policy dialogue and technical

6
 cooperation between the two institutions. Technical cooperation may
take the form of joint seminars and workshops in areas of mutual
interest in the field of central banking, RBI said on its website.

RBL Bank informed that it would be the anchor investor in Trifecta

Capitals Venture
Debt Fund, the first alternative investment fund (AIF) in India with a
commitment of Rs 50 crore (US$ 7.51 million). This move provides RBL
Bank the opportunity to support the emerging venture debt market in
India.

Bandhan Financial Services raised Rs 1,600 crore (US$ 240.2 million)

from two international institutional investors to help convert its
microfinance business into a full service bank. Bandhan, one of the
two entities to get a banking licence along with IDFC, launched its
banking operations in August 2015.

The government and the regulator have undertaken several

measures to strengthen the Indian banking sector.

The Government of India is looking to set up a special fund, as a part

of National
Investment and Infrastructure Fund (NIIF), to deal with stressed assets of
banks.
The special fund will potentially take over assets which are viable but
dont have additional fresh equity from promoters coming in to
complete the project.

The Reserve Bank of India (RBI) plans to soon come out with
guidelines, such as common risk-based know-your-customer (KYC)
norms, to reinforce protection for consumers, especially since a large
number of Indians have now been financially included post the
governments massive drive to open a bank account for each
household.

To provide relief to the state electricity distribution companies,

Government of India has proposed to their lenders that 75 per cent of
their loans be converted to state government bonds in two phases by
March 2017. This will help several banks, especially public sector
banks, to offload credit to state electricity distribution companies from
their loan book, thereby improving their asset quality.

7
 The Reserve Bank of India (RBI), the Department of Industrial Policy &
Promotion (DIPP) and the Finance Ministry are planning to raise the
Foreign Direct Investment (FDI) limit in private banks sector to 100 per
cent from 74 per cent.

Government of India aims to extend insurance, pension and credit

facilities to those excluded from these benefits under the Pradhan
Mantri Jan Dhan Yojana (PMJDY).<

The Government of India announced a capital infusion of Rs 6,990

crore (US$ 1.05 billion) in nine state run banks, including State Bank
of India (SBI) and Punjab National Bank (PNB). However, the new
efficiency parameters would include return on assets and return on
equity. According to the finance ministry, This year, the Government
of India has adopted new criteria in which the banks which are more
efficient would only be rewarded with extra capital for their equity so
that they can further strengthen their position."

To facilitate an easy access to finance by Micro and Small Enterprises

(MSEs), the Government/RBI has launched Credit Guarantee Fund
Scheme to provide guarantee cover for collateral free credit facilities
extended to MSEs upto Rs 1 Crore (US$ 0.15 million). Moreover, Micro
Units Development & Refinance Agency (MUDRA) Ltd. was also
established to refinance all Micro-finance Institutions (MFIs), which are
in the business of lending to micro / small business entities engaged in
manufacturing, trading and services activities upto Rs 10 lakh (US$
0.015 million).

The central government has come out with draft proposals to

encourage electronic transactions, including income tax benefits for
payments made through debit or credit cards.

The Union cabinet has approved the establishment of the US$ 100
billion New Development Bank (NDB) envisaged by the five-member
BRICS group as well as the BRICS contingent reserve arrangement
(CRA).

The government has plans to set up a fund that will provide surety to
banks against loans given to students for higher education.

8
 Current period
All banks which are included in the Second Schedule to the Reserve
Bank of India Act, 1934 are Scheduled Banks. These banks comprise
Scheduled Commercial Banks and Scheduled Co-operative Banks.
Scheduled Commercial Banks in India are categorized into five
different groups according to their ownership and/or nature of
operation. These bank groups are:

2.2 Introduction to industry

Flow Chart of Indian Banking Sector

9
 State Bank of India and its Associates
Nationalized Banks
Private Sector Banks
Foreign Banks
Regional Rural Banks.

In the bank group-wise classification, IDBI Bank Ltd. is included in

Nationalized Banks. Scheduled Co-operative Banks consist of
Scheduled State Co-operative Banks and Scheduled Urban Cooperative
Banks.

State Bank of India is an Indian multinational, public sector

banking and financial services company. It is a government-owned
corporation with its headquarters in Mumbai, Maharashtra. As of
2014-15, it has assets of INR 20,48,080 crores and 16,333 branches,
including 191 foreign offices spread across 36 countries, making it
the largest banking and financial services company in India by
assets. State Bank of India is one of the Big Four banks of India, along
with ICICI Bank, Bank of Baroda and Punjab National Bank.

10
The bank traces its ancestry to British India, through the Imperial Bank
of India, to the founding, in 1806, of the Bank of Calcutta, making it
the oldest commercial bank in the Indian Subcontinent. Bank of
Madras merged into the other two "presidency banks" in British India,
Bank of Calcutta and Bank of Bombay, to form the Imperial Bank of
India, which in turn became the State Bank of India. Government of
India owned the Imperial Bank of India in 1955, with Reserve Bank of
India (India's Central Bank) taking a 60% stake, and renamed it the
State Bank of India. In 2008, the government took over the stake held
by the Reserve Bank of India.

State Bank of India is a regional banking behemoth and has 20%

market share in deposits and loans among Indian commercial banks.

HISTORY
Pursuant to the provisions of the State Bank of India Act of 1955, the
Reserve Bank of India, which is India's central bank, acquired a
controlling interest in the Imperial Bank of India. On 1 July 1955, the
imperial Bank of India became the State Bank of India. In 2008, the
Government of India acquired the Reserve Bank of India's stake in SBI
so as to remove any conflict of interest because the RBI is the
country's banking regulatory authority.

In 1959, the government passed the State Bank of India (Subsidiary

Banks) Act. This made SBI subsidiaries of eight that had belonged
toprincely states prior to their nationalization and operatonal take-
over between September 1959 and October 1960, which made eight
state banks associates of SBI. This acquisition was in tune with the
first Five Year Plan, which prioritised the development of rural India.
The government integrated these banks into the State Bank of India
system to expand its rural outreach. In 1963 SBI merged State Bank of
Jaipur (est. 1943) and State Bank of Bikaner (est.1944).

SBI has acquired local banks in rescues. The first was the Bank of
Bihar (est. 1911), which SBI acquired in 1969, together with its 28
branches. The next year SBI acquired National Bank of Lahore (est.
1942), which had 24 branches. Five years later, in 1975, SBI acquired
Krishnaram Baldeo Bank, which had been established in 1916 in
Gwalior State, under the patronage of Maharaja Madho Rao Scindia.
The bank had been the Dukan Pichadi, a small moneylender, owned
by the Maharaja. The new bank's first manager was Jall N. Broacha, a
11
Parsi. In 1985, SBI acquired the Bank of Cochin in Kerala, which had
120 branches. SBI was the acquirer as its affiliate, the State Bank of
Travancore, already had an extensive network in Kerala.

There has been a proposal to merge all the associate banks into SBI to
create a "mega bank" and streamline the group's operations.

The first step towards unification occurred on 13 August 2008 when

State Bank of Saurashtra merged with SBI, reducing the number of
associate state banks from seven to six. Then on 19 June 2009 the SBI
board approved the absorption of State Bank of Indore. SBI holds
98.3% in State Bank of Indore. (Individuals who held the shares prior
to its takeover by the government hold the balance of 1.7%)

The acquisition of State Bank of Indore added 470 branches to SBI's

existing network of branches. Also, following the acquisition, SBI's
total assets will inch very close to the 10 trillion mark (10 billion long
scale). The total assets of SBI and the State Bank of Indore stood at
9,981,190 million as of March 2009. The process of merging of State
Bank of Indore was completed by April 2010, and the SBI Indore
branches started functioning as SBI branches on 26 August 2010.On
October 7, 2013, Arundhati Bhattacharya became the first woman to
be appointed Chairperson of the bank.

Operations
SBI provides a range of banking products through its network of
branches in India and overseas, including products aimed at non-
resident Indians (NRIs). SBI has 14 regional hubs and 57 Zonal Offices
that are located at important cities throughout India.

Domestic presence

SBI has nearly 16000 branches in India presently, of which 9,851

(66%) were in
Rural and Semi-urban areas In the financial year 2012-13, its revenue
was INR
200,560 Crores (US$36.9 billion), out of which domestic operations
contributed to 95.35% of revenue. Similarly, domestic operations
contributed to 88.37% of total profits for the same financial year.
Under the Pradhan Mantri Jan Dhan Yojana of financial inclusion
launched by Government in August 2014, SBI held 11,300 camps and

12
opened over 30 lakhs accounts by September, which included 21.16
lakh accounts in rural areas and 8.8 lakh accounts in urban areas.

International presence

The Israeli branch of the State Bank of India located in Ramat Gan.

the largest presence in foreign markets among domestic banks. It

has branches of the parent in Singapore, Moscow, Colombo, Dhaka,
Frankfurt, Hong Kong, Tehran, Johannesburg,London, Los Angeles,
Male in the Maldives, Muscat, Dubai, New York, Osaka, Sydney, and
Tokyo. It has offshore banking units in theBahamas and Bahrain, and
representative offices in
Myanmar, Bhutan and Cape Town.As of 2014-15, the bank had 191
overseas offices spread over 36 countries having SBI has 7 retail
banking branches in Singapore.

The Canadian subsidiary, State Bank of India (Canada) also dates to

1982. It has seven branches, four in the Toronto area and three in the
Vancouver area.SBI operates several foreign subsidiaries or affiliates.
In 1990, it established an offshore bank: State Bank of India
(Mauritius). SBI (Mauritius) has 15 branches in major cities/towns of the
country including Rodrigues.

SBI Sri Lanka now has three branches located in Colombo, Kandy and
Jaffna. The Jaffna branch was opened on 9 September 2013. SBI Sri
Lanka, the oldest bank in Sri Lanka, celebrated its 150th year in Sri
Lanka on 1 July 2014.

In 1982, the bank established a subsidiary, State Bank of India

(California), which now has ten branches nine branches in the state of
California and one in Washington, D.C. The 10th branch was opened in
Fremont, California on 28 March 2011. The other eight branches in
California are located in Los Angeles, Artesia, San Jose, Canoga Park,
Fresno, San Diego, Tustin and Bakersfield.

In Nigeria, SBI operates as INMB Bank. This bank began in 1981 as the
IndoNigerian Merchant Bank and received permission in 2002 to
commence retail banking. It now has five branches in Nigeria.

In Nepal, SBI owns 49% of SBI Nepal (State Bank in Nepal) share with
Nepal Government owing the rest and SBI NEPAL has branches
throughout the country in each and every city as banking has become
13
 the major part of daily life for Nepalese people. In Moscow, SBI owns
60% of Commercial Bank of India, with Canara Bank owning the rest.
In Indonesia, it owns 76% of PT Bank Indo Monex.The State Bank of
India already has a branch in Shanghai and plans to open one in
Tianjin.

In Kenya, State Bank of India owns 76% of Giro Commercial Bank,

which it acquired for US$8 million in October 2005.In January 2016,
SBI opened it's first branch
in Seoul, South Korea following the continuous and significant increase
in trade due to the Comprehensive Economic Partnership Agreement
signed between New Delhi and Seoul in 2009.

Associate banks

SBI now has five associate banks, down from the eight that it originally
acquired in 1959. All use the State Bank of India logo, which is a blue
circle, and all use the "State Bank of" name, followed by the regional
headquarters' name:

State Bank of Mysore (founded 1913)

State Bank of Patiala (founded 1917)

State Bank of Hyderabad (founded 1941)

State Bank of Travancore (founded 1945)

State Bank of Bikaner & Jaipur (founded 1963)

The State Bank of India and all its associate banks are identified by
the same blue keyhole logo. The State Bank of India wordmark
usually has one standard typeface, but also utilises other typefaces.

Non-banking subsidiaries

Apart from its five associate banks, SBI also has the following non-
banking subsidiaries:

SBI Capital Markets Ltd

SBI Funds Management Pvt Ltd

SBI Factors & Commercial Services Pvt Ltd

14
 SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)

SBI DFHI Ltd

SBI Life Insurance Company Limited

SBI General Insurance

In March 2001, SBI (with 74% of the total capital), joined with BNP
Paribas (with
26% of the remaining capital), to form a joint venture life insurance
company
named SBI Life Insurance company Ltd. In 2004, SBI DFHI (Discount
and Finance House of India) was founded with its headquarters in
Mumbai.

Nationalised banks

1. Allahabad Bank
2. Andhra Bank
3. Bank of Baroda
4. Bank of India
5. Bank of Maharashtra
6. Canara Bank
7. Central Bank of India
8. Corporation Bank
9. Dena Bank
10. Indian Bank
11. Indian Overseas Bank
12. Oriental Bank of Commerce
13. Punjab & Sind Bank
14. Punjab National Bank
15. Syndicate Bank
16. UCO Bank
17. Union Bank of India
18. United Bank of India
19. Vijaya Bank
Other public sector banks

15
1. IDBI Bank
2. Bharatiya Mahila Bank

Private Sector Banks

1. Axis Bank
2. Bandhan Bank
3. Catholic Syrian Bank
4. City Union Bank
5. Dhanlaxmi Bank
6. DCB Bank
7. Federal Bank
8. HDFC Bank
9. ICICI Bank
10. IDFC Bank
11. UP Agro Corporation Bank
12. Karnataka Bank
13. IndusInd Bank
14. ING Vysya Bank
15. Jammu and Kashmir Bank
16. Karur Vysya Bank
17. Kotak Mahindra Bank
18. Lakshmi Vilas Bank
19. Nainital Bank
20. RBL Bank
21. South Indian Bank
22. Tamilnad Mercantile Bank Limited
23. Yes Bank
24. Goswami Bank
25. Mariyamman Indian Bank

Foreign banks with branches in India

List of banks which are incorporated outside India and are operating
branches in
India (as of 31 January 2015)
Australian banks
1. Australia and New Zealand Banking Group
2. Commonwealth Bank of Australia
16
3. National Australia Bank
4. Westpac Banking Corporation Bahraini bank
1. Bank of Bahrain and Kuwait
Bangladeshi banks
1. AB Bank
2. Sonali Bank
Belgian bank
1. Antwerp Diamond Bank
Canadian bank
1. Bank of Nova Scotia
Chinese bank
1. Industrial & Commercial Bank of China
French banks
1. BNP Paribas
2. Credit Agricole
3. Societe Generale German banks
1. Deutsche Bank
Indonesian bank
1. Bank Internasional Indonesia
Japanese banks
1. Mizuho Corporate Bank
2. Sumitomo Mitsui Banking
3. Bank of Tokyo-Mitsubishi Mauritian bank
1. State Bank of Mauritius
Dutch bank
1. Rabobank
Qatari bank
1. Doha bank
Russian banks
1. Sberbank
2. VTB
Omani bank
1. HSBC Bank Oman
Scottish bank
1. Royal Bank of Scotland
Singaporean banks
1. DBS Bank
2. United Overseas Bank South African bank
17
1. FirstRand Bank
South Korean banks
1. Shinhan Bank
2. Woori Bank
Sri Lankan bank
1. Bank of Ceylon
Swiss banks
1. Credit Suisse
2. UBS AG
Taiwanese bank
1. Chinatrust Commercial Bank Thai bank
1. Krung Thai Bank
UAE banks
1. Abu Dhabi Commercial Bank
2. Mashreq Bank UK banks
1. HSBC
2. Barclays Bank
3. Standard Chartered Bank
4. The Royal Bank of Scotland(RBS N.V) US banks
1. American Express
2. Bank of America
3. Citibank
4. J.P. Morgan Chase Bank

18
2.3 Introduction to the
Project Small & Medium
Enterprises
In small enterprise the investment in plant and machinery is more
than Rs. 25 lakh but does not exceed Rs. 1 crores. In medium the
investment in plant and machinery is more than Rs.1 crore but does
not exceed Rs.10 crores. Micro, Small and Medium Enterprises (MSME)
contribute nearly 8 percent of the countrys GDP, 45 percent of the
manufacturing output and 40 percent of the exports. They provide the
largest share of employment after agriculture. They are the nurseries
for entrepreneurship and innovation. They are widely dispersed across
the country and produce a diverse range of products and services to
meet the needs of the local markets, the global market and the
national and international value chains.

19
 8% Retail
6% 20%
8%

8% 12%

9% Manufactu
10% 19% ring

Profession
al
Services
Hospitality

Education

Travel

Real State

Logistics

Others

Purpose
The purpose of the project was to Study Factor's affecting SME'S before
selecting particular bank.
20
 Scope
The study will help in comprehensive analysis about the perception of
SMEs towards Banks and also to estimate the satisfaction level
through the services provided.

Research Objective
To Compare and Study Nationalized and Private Banks with Respect
to Loan Process and Facilities for SME's.

To Study Factor's affecting SME'S before selecting particular bank

Chapter 3
Project Details

3.1 Objective

To Compare and Study Nationalized and Private Banks with Respect

to Loan Process and Facilities for SME's.

To Study Factor's affecting SME'S before selecting particular bank

Purpose of the Objective

The purpose of the project was to Study Factor's affecting SME'S
before selecting particular bank.

Scope
The study will help in comprehensive analysis about the perception of
SMEs towards Banks and also to estimate the satisfaction level
through the services provided

21
OVERVIEW OF MSMEs

MSMEs are crucial to the economic growth process and play an

important role in the countrys overall production network. They are
drivers behind a large number of innovations and contribute through
creation of employment, investments and exports. The MSME
participation in the global economy reveals mainly three lines of
activity trade, technology and investment.

The MSMEs play a pivotal role in the overall industrial economy of the
country. India has nearly 13 million MSMEs which produce a diverse
range of products (about 8000 odd items), including consumer items,
capital and intermediate goods. In terms of value, the sector accounts
for about 45% of the manufacturing output and around 40% of the
total export of the country.

The factors strengths coupled with opportunities that work in favor

of Indian MSMEs include their high contribution to domestic production,
significant export earnings, low investment requirements, operational
flexibility, location-wise mobility, low intensive imports, capacities to
develop appropriate indigenous technology, import substitution,
contribution towards defense production and competitiveness in
domestic and export markets. The sector, therefore, presents an
opportunity to harness local competitive advantage to achieve global
dominance in industrial production and provide even greater
employment.

The challenges faced by micro, small & medium enterprises (MSMEs)

includes inadequate access to finance due to the lack of information
and non-formal business practices, fragmented markets for inputs and
products, lack of easy access to interstate and international markets,
limited access to technology and product innovation and lack of
awareness of global best practices. They also face considerable delays
in the settlement of dues and payment of bills by large buyers.

Recognizing the importance of the MSME sector, Government has

announced several initiatives aimed at increasing the flow of credit to
this sector. The objective is to double the flow of credit to the sector
from Rs 67,600 crore in 2004-05 to Rs 1,35,200 crore by 2009-10, i.e.,
within a period of 5 years. It also suggested rationalizing the cost of
loans to MSME sector by adopting a transparent rating system with
cost of credit linked to the rating of an enterprise.

22
2.1 MSME Eligibility

With the enactment of MSMED Act 2006 and with the issuance of the
Government Of India, Ministry Of Commerce & Industry, Department
Of Industry Policy & Promotion Notification No. S.O. 563(E) dated
27.02.2009, the paradigm shift that has taken place in the supportive
measure extended by GOI to Small Scale or an Ancillary Industrial
Undertaking is the inclusion of the services sector in the definition of
Micro Small & Medium Enterprise. The MSMED Act 2006 has modified
the definition of Micro Small & Medium enterprises engaged in
manufacturing or production and providing or rendering of services.
As per MSMED Act 2006 the MSME segment has broadly been
classified into Manufacturing Enterprises & Service Enterprises.

A Manufacturing Sector Enterprise is one, which is engaged in the

manufacturing or production, processing or preservation of goods.
Investment in plant & machinery (Original Cost excluding Land &
Building and the items specified by the Ministry Of Small Scale
Industries vide its notification No. S.O. 1722(E) dated 5.10.2006 in
Annexure 1) is the criterion for classifying a manufacturing enterprise
into Micro, Small and Medium Manufacturing Sector Enterprise.

A Service Sector Enterprise is one, which is engaged in providing or

rendering of services. Investment in equipments (Original Cost
excluding Land & Building and furniture, fittings and other items not
directly related to the service rendered or as may be notified under
the MSMED ACT 2006) is the criterion for classifying a service
enterprise into Micro, Small and Medium Service Sector Enterprise.

Service Sector Enterprises include Small Road & Water Transport

Operators, Small Business, Professional & Self Employed persons,
Retail Traders and all other Service Enterprises. While banks lending
to Micro & Small enterprises will comprise Priority Sector Advances,
advances to Medium Enterprises will not be included for the purpose
of reckoning under the priority sector.
The following table reflects the investment ceilings for classifying
Micro, Small and Medium sector enterprises:

23
 Manufacturing Service Sector
Sector
Classificati (Investment in
on (Investment in P Equipments)
& M)
Micr Up to Rs 25.00 Lacs Up to Rs 10.00
o Lacs
Enterprise
Sma More than Rs 25.00 More than Rs 10.00
ll Lacs up to Rs 5.00 Lacs up to Rs 2.00
Enterprise Crores. Crores

Mediu More than Rs 5.00 More than Rs 2.00

m Crores up to Rs Crores up to Rs 5.00
Enterprise 10.00 Crores
Crores

The enactment of the Micro, Small and Medium Enterprises

Development (MSMED)
Act, 2006 was a landmark initiative taken by the Government of India
to enable the SMEs competitive strength, address the issues and
challenges and reap the benefits of the global market. SME policy
initiatives at the national and state level are aimed at strengthening
the role of SMEs at the base as well as at the higher level.
SMEs always represented the model of socio-economic policies of
Government of India which emphasized judicious use of foreign
exchange for import of capital goods and inputs; labour intensive
mode of production; employment generation; no concentration of
diffusion of economic power in the hands of few (as in the case of big
houses); discouraging monopolistic practices of production and
marketing; and finally effective contribution to foreign exchange
earning of the nation with low import-intensive operations. It was also
coupled with the policy of de-concentration of industrial activities in
few geographical centres. It can be observed that by and large, SMEs
in India met the expectations of the Government in this respect. SMEs
developed in a manner, which made it possible for them to achieve
the following objectives:

High contribution to domestic production

Significant export earnings
24
 Low investment requirements
Operational flexibility
Location wise mobility
Low intensive imports
Capacities to develop appropriate indigenous technology
Import substitution
Contribution towards defense production
Technology oriented industries
Competitiveness in domestic and export markets

Following activities are also falling under Service Enterprises:

Consultancy Services including Management Services

Composite Broker Services in Risk and Insurance Management
Third Party Administration (TPA) Services for Medical Insurance Claims
of Policy Holders
Seed Grading Services
Educational Institutions
Training Institutes
Retail Trade
Practice of Law i.e. legal services
Trading in medical instruments (brand new)
Placement and Management Consultancy Services
Advertising agency and Training centers

Challenges in MSME financing

Challenges faced by Banks in SME financing:

There are many challenges which the banks face while SME
Financing:
Absence of credit information system
Inadequacy of collateral Higher cost of follow-up
Disproportionate Requirement of Financial Assistance
Concealment of background or other operational details
Poor repayment records

Challenges the SMEs facing are:

25
 Unable to capture market opportunities, which require large
production facilities and thus could not achieve economies of scale,
homogenous standards and regular supply.
Experiencing difficulties in purchase of inputs such as raw materials,
machinery and equipments, finance, consulting services, new
technology, highly skilled labor etc.
Small size hinders the internalization of functions such as market
research, market intelligence, supply chain, technology innovation,
training, and division of labour that impedes productivity.
Unable to Compete with big players in terms of product quality, range
of products, marketing abilities and cost.
Absence of a wide range of Financing and other services that is
available to raise money and sustain the business.
Absence of Infrastructure, quality labour, Business acumen and limited
options opportunities to widen the business.
Poor IT and Knowledge infrastructure and other Shortcoming in
management Technological obsolescence, Marketing constrains

MSME Credit

Margin Requirements:

Normal margin for CC limit remains 25% for Stocks and 40% for Book
Debts limit. On Bills limit margin varies from nil to 10%.
With a view to support the MSE sector relaxations in margins to
deserving viable MSEs following may be considered:
up to 20% for stocks
up to 30% for Book Debts
up to nil extent in case of Bills facilities Collateral Requirements:
Credit assistance to MSEs up to Rs.5 lakhs is extended without any
collateral securities

26
 Collateral free financial assistance above Rs.5 lakhs and up to
Rs.100.00 lakhs is extended to Micro & Small Enterprises as per
operational guidelines
All the eligible collateral free loans extended to Micro & Small
Enterprises borrowers are covered under Credit Guarantee Scheme of
Credit guarantee Fund Trust for Micro & Small Enterprises (CGTMSE)
For financial assistance above Rs.100 lakhs to Micro & Small
Enterprises, collateral security requirement is decided on case to case
basis on individual merits considering various factors including risks
related to the activity after conducting due diligence about the
promoters
In case of mid corporates engaged in manufacturing with investment
in plant & machinery above Rs.5 crores up to Rs.10 crores and
requirement ranging between Rs.5 crores to Rs.25 crores, financial
assistance is considered under a special scheme UNION HIGH PRIDE
by reducing the collateral coverage even up to 20% of the Banks
exposure. In exceptional cases this coverage can be further relaxed
provided proper justification for the same persists
Banks exposure. In exceptional cases this coverage can be further
relaxed provided proper justification for the same persists
In other cases the quantum of collateral coverage is decided based on
the activity and risk involved with the activity / promoters
However quantum of collateral is not a hurdle while extending
financial assistance to MSMEs in general.

Details collected from applicants:

Financial Data Of The Company:

Equity / capital details
Credit facility sanctioned/availed by/from other banks/institutions (with
latest outstanding and present status of the account)
Current and historical (min 3* years) profit and loss statement
Current and historical (min 3* years) balance sheet statement
Projected profitability details (min for the next 2* years)
Projected balance sheet details (min for the next 2* years)
Projected cash flows
Projected fund flows

II. Non-Financial Details:

27
 Copies of Memorandum of Association and Articles of Association (for
limited companies).
List of shareholders holding 5% or more in equity.
Note on Companys tax payment status.
Copies of clearance from Government/Local Bodies a may be relevant
to the type of proponent e.g. NOC from Population Control authorities,
approvals for construction of factory/office building from Municipal
Corporation/Local Body etc.
Copies of letters of sanction from Banks/Financial Institutions
participating in financing the project and working capital requirements.

Companys Promoters and Management Details:

Names of Directors / Partners, their addresses and their PAN,
Customer-IDs, if any (Minimum of ten directors/partners).
Installed and licensed capacities (where applicable) Industry details.
Project details (where applicable)

Additional Project Details:

Sponsor / scheme or Financial / technology partner
Raw material requirements and Marketing details
Environmental clearances and Other statutory clearances
Schedule of implementation
Date of commencement of business / project
Competitors details
Industry trends

Modes for delivery of Credit Facilities

A) Sole Banking Arrangements

Under this arrangement all the credit needs of a borrowing unit are
met by a single Bank. A single bank carries disproportionate risk when
it finances huge amount. Smaller banks cannot finance huge sums. It
may not have appraising skills. AAA & AA Borrowers accounts
can be taken over subject to exposure ceiling A-rated borrowers in the
normal course.

28
B) Multiple Banking

Under this arrangement, the credit needs of different divisions of a

borrowing company are met independently by different banks without
any formal Agreement/Arrangement amongst them.

C) Consortium Lending

The entire credit needs of a borrowing unit are financed by a group of

banks by forming a consortium. It is a concept to promote collective
application of banking resources.

D) Syndication

A syndicated credit is an arrangement between two or more lending

institutions to provide a credit facility using common loan
documentation. Bank will encourage financing under such
arrangements. Bank will also act as syndication leader whenever such
opportunity is spotted.

In syndication, one bank, generally called Lead Manager/Syndicator,

arranges a group of banks to form a syndicate and this syndicate
provides credit facilities to a borrower, using common loan
documentation.

Funding Options Available For Project

Finance Fund Based Limits:

Term Loan:

This credit facility is used to fulfil the long term requirements of the
borrower. The payback period for this facility varies from 3 to 10
years. But in UBI generally commercial loans are given for a period
maximum up to 7 years. It is also called Secured Loans because the
borrower has to furnish some security against this loan and the value
of that security should be greater than or equals to the loan amount.
29
 This security can be in terms of hypothecation of fixed assets, land &
Buildings of the firm, insurance policies etc. Certain percentage is
charged on the loan amount by the bank as interest for this facility.

This credit facility can be used for the following purposes: -

Purchase of Plant & Machinery for the organization

Purchase of Land and building for a new or existing projects
Purchase of other tools or instruments that are fixed in nature i.e.
furniture & fixtures, vehicles etc.
The periodical liability for interest and principal remains in the
currency of the loan and is translated into rupees at the prevailing
rate of exchange for making payments to the respective
Bank/financial institutions.

These term loans typically represent secured borrowing. Assets which

are financed with the proceeds of the term loan provide the prime
security. Other assets of the firm may serve as additional/collateral
security. All loans provided by banks, along with interest, liquidated
damages, commitment charges, expenses, etc., are secured by way
of:

First equitable mortgage of all immovable properties of the borrower,

both present and future. If the term loan is extended by more than one
bank, then the charge on the collateral to the lenders is normally on
paripassu basis.
Second charge on hypothecation of all movable properties of the
borrower, both present and future, subject to prior charges in favour of
commercial banks for obtaining working capital advance in the normal
course of business.
To the general category of borrowers, bank charges an interest rate
that is determined relating to the credit risk of the proposal, subject
usually to Base rate.Interest is charged on a monthly basis and
depending on the terms of the project, either capitalized or serviced
during the disbursement period.

The interest burden decline over time on account of repayment of the

principal, where as principal repayment may remain constant if based
on equal instalments. Principal repayment may vary if the repayment
is fixed on ballooning terms which consequently depends on the cash
flow from the project. Thus the total debt servicing burden declines
over time.
30
 Bank gives Rupee loans as well as Foreign Currency term loan.

Rupee currency loan: These loans are provided for incurring

expenditure for land, building, plant & machinery, technical know-how,
miscellaneous fix assets, preliminary expenses pre-operative
expenses and margin money for working capital.

Foreign currency loan: These loans are provided for meeting the
foreign currency expenditure towards import of plant, machinery and
equipment, and payment of foreign technical know-how fees.

Working Capital Loan:

This is a way to finance short-term requirements of any business.

Working capital is the money that is required for fulfilling the day-to-
day transactions of an organization. The assets representing working
capital rapidly convert from one form to another in a short period of
time, generally one year. Thus cash converts in to raw material, which
in turn converts in to goods in process and finally in to finished goods.
The payback period for this type of loan is 3 months. Security is
required for this type of loan also and it can be in the form of
hypothecation of raw material procured and other current assets etc.
Secured Overdraft is an example of this facility. The bank charges
certain interest on this facility.

Working capital loans can be obtained to finance the following

activities: -
Purchase of raw material/ receivables
Exports and imports of goods
Sales financing i.e. bill finance, supply bills, trade bills etc.
Finance for other miscellaneous purposes Cash Credit:

This is a fund based service offered by the bank. Cash credit is an

arrangement under which a customer of a bank or financial institution
is allowed an advance up to certain limit against credit granted by
bank. The account is only offered to companies and not to individuals.
The account behaves like a credit card. When the proposal is made,
the company request for a certain amount of maximum fund it will
require for a particular year. The funds are to be used for WC needs of
the company and the value of the request has to come from company
after a good amount of analysis of its future plans. Once the request is
accepted by the bank, it will analyze the company and make the

31
proposal. Sufficient amount of security is asked from the company for
the credit the bank is going to offer. Usually the security is book debts
and stocks. For calculation of the limits certain percentages are
reduced from the book value of the security depending on the risk
associated with the security at stake. Proper deeds are made and
verified in favour of the bank for the services being asked for and after
the proposal is passed an account is opened in favour of the company
and requested amount of funds are made available in this account.
The account is operated like a normal current account with all the
services offered.

The charges are applicable on the amount of funds used up from the
account and days for which the funds were being used from the
account. The bank maintains credit for the company in this account
and if the account is used below 70 80 % of the sanctioned limit,
penalty is applied to the account which is proportionate to the amount
of unused funds. The limits can be increased during the next review
hence the limits are supposed to be asked for after good study of the
companys future course of action.

Overdraft:

An overdraft occurs when withdrawals from a bank account exceed

the available balance. Overdraft is allowed against a host of securities
including financial instruments like shares, units of mutual funds,
surrender value of LIC policy and debentures etc. Some overdrafts are
even granted against the perceived "worth" of an individual. Such
overdrafts are called clean overdrafts. Bank charges interest but
Interest is only paid on amounts borrowed.

Bills Purchased / Discounted:

The RBI envisaged the progressive use of bills as an instrument of

credit as against the prevailing practice of using the widely-prevalent
cash credit arrangement for financing working capital. The cash credit
arrangement gave rise to unhealthy practices. As the availability of
bank credit was unrelated to production needs, borrowers enjoyed
facilities in excess of their legitimate needs. Moreover it led to double
financing. This was possible because credit was taken from different
agencies for financing the same activity. This was done, for example,
by buying goods on credit from suppliers and raising cash credit by
hypothecating the same goods. The bill financing is intended to link

32
 credit with the sale and purchase of goods and, thus, eliminate the
scope for misuse or diversion of credit to other purposes.

NON FUND BASED LIMITS:

Letter Of Credit:

A letter of credit is a promise to pay, a commercial instrument of

assured payment. Banks issue letters of credit as a way to ensure
sellers that they will get paid as long as they do what they've agreed
to do.

A letter of credit is widely common in the business community,

especially international trade because the bank acts as an
uninterested party between buyer and seller. For example, importers
and exporters might use letters of credit to protect themselves. In
addition, communication can be difficult across thousands of miles
and different time zones. The credit specifies as to when the
documents are presented to the paying bank or at some future date,
depending upon the terms stipulated in the credit. A letter of credit
spells out the details so that everybody's on the same page.

Parties to LCs:
Applicant: The buyer or importer of the goods
Issuing bank: Importers or buyers bank who lends its name or
credit.
Advising bank: Issuing banks branch (or correspondent in exporters
country) to whom the letter of credit is sent for onward transmission to
the seller or beneficiary, after authentication of genuineness of the
credit.
Beneficiary: The party to whom the credit is addressed i.e. seller or
supplier or exporter.
Negotiating bank: The bank to which the beneficiary presents his
documents for negotiation or acceptance under the credit.
Reimbursing bank: Third bank which repays, settles or funds the
negotiating bank at the request of its principal, the issuing bank.
Confirming bank: The bank adding confirmation to the credit, which
undertakes the responsibility of payment by issuing bank on his failure
to make the pay.
Bank Guarantee:

33
 It is a type of guarantee in which a bank or other lending organization
promises to repay the liabilities of a debtor in the event that the
debtor is unable to. The liability of the bank begins only after the
default is committed by the principal debtor. There are three parties
involved in a contract of guarantee i.e. the applicant, the beneficiary
and the guarantor.

Bank guarantee means that the bank gives a written certificate to the
beneficiary at the consignor's request. As the guarantor, bank has the
responsibilities to handle the debt or obligations instead of the
consignor. The rights and obligations of all the parties would be
prescribed by the contract.

Banks issues guarantee in the following situations: -

Companies participating in tenders and auctions are required to
submit Bank Guarantees for a minimum stipulated amount as security
deposit.
Payment of mobilization advances to contractors executing civil
projects is a common practice. As a security against such payments
the contractors are required to submit Bank Guarantees.
In case of supply of raw materials, the supplier of the raw material
may require a security from the buyer in the form of Bank Guarantee.
Suppliers of goods or services often provide warranty period to the
buyers. In such cases the suppliers may request the bank to issue
performance guarantee in favour of the buyers.

Depending on the nature of the guarantee issued, Bank Guarantees

can be of two types: -
Financial Guarantee:
Such a guarantee is a certificate issued by the bank ensuring the
soundness of the financial ability of a client to meet certain financial
obligations. For example a bank guarantee issued to a government
department against security deposit guarantees the financial
capability of its client to pay the indicated amount.
Performance Guarantee:
In this type of guarantee the issuing bank guarantees to make good to
the beneficiary, the monetary lossin the event of non performance or
short performance of a contract by its client. Thus, the assessment of
the technical competency and managerial ability is required before

34
issuing a performance guarantee. The payment made by the issuing
bank is a penalty for the non-performance of the task by its client.

35
3.2 Literature Review

Market Share of Nationalized Banks and Private Banks

Fig 1.1 Market share

State Bank of India has the largest market share with 19.10% followed by ICICI bank
with 10.34% followed by Punjab National Bank with 5.48% . Next is Bank Of India
with 5.20% followed by HDFC Bank with 2.91% followed by Axis Bank with 2.73%.

36
Market Cap of Nationalized Banks and Private
Banks

Fig 1.2 Market Cap of Nationalized Banks (in Cr)

Fig 1.3 Market Cap of Private Banks (in Cr)

37
Major Players of Nationalized Banks and Private
Banks

Fig 1.4 Major Players of Nationalized banks in terms of net

profit (Rs. Cr)

Fig 1.5 Major Players of Private Banks in terms of net

profit (Rs. Cr)

38
Growth Rate of Nationalized Banks and Private
Banks

Fig 1.6 Growth Rate of Banks (%)

Fig 1.6 Growth Rate of Banks (%)

39
Current Trends in the Banking sector
Telephone banking is a service provided by a bank or other financial
institution, that enables customers to perform financial transactions
over the telephone, without the need to visit a bank branch or
automated teller machine. Telephone banking times can be longer
than branch opening times, and some financial institutions offer the
service on a 24 hour basis. From the bank's point of view, telephone
banking reduces the cost of handling transactions by reducing the
need for customers to visit a bank branch for non-cash withdrawal and
deposit transactions.Real time gross settlement systems (RTGS) are
specialist funds transfer systems where transfer of money or
securities takes place from one bank to another on a "real time" and
on "gross" basis. Settlement in "real time" means payment transaction
is not subjected to any waiting period. The transactions are settled as
soon as they are processed. "Gross settlement" means the transaction
is settled on one to one basis without bundling or netting with any
other transaction. Once processed, payments are final and
irrevocable.RTGS systems are typically used for high-value
transactions that require immediate clearing, in some countries the
RTGS systems may be the only way to get same day cleared funds
and so may be used when payments need to be settled urgently such
as when purchasing a house. However most regular payments would
not use a RTGS system, but instead would use a national payment
system or network that allows participants to batch and net payments
Electronic funds transfer (EFT) is the electronic exchange, transfer of
money from one account to another, either within a single financial
institution or across multiple institutions, through computer-based
systems. ECS is an electronic mode of payment / receipt for
transactions that are repetitive and periodic in nature. ECS is used by
institutions for making bulk payment of amounts towards distribution
of dividend, interest, salary, pension, etc., or for bulk collection of
amounts towards telephone / electricity / water dues, cess / tax
collections, loan installment repayments, periodic investments in
mutual funds, insurance premium etc. Essentially, ECS facilitates bulk
transfer of monies from one bank account to many bank accounts or
vice versa.
Primarily, there are two variants of ECS - ECS Credit and ECS Debit.
40
Point of sale terminal (POS terminal) is an electronic device used to
process card payments at retail locations. A POS terminal generally
does the following:

Reads the information off a customers credit or debit card

Checks whether the funds in a customers bank account are
sufficient
Transfers the funds from the customers account to the sellers
account (or at least, accounts for the transfer with the credit card
network) Records the transaction and prints a receipt

Nationalized Bank State Bank of India (SBI)

State Bank of India (SBI) is an Indian multinational, Public Sector
banking and financial services company. It is a government-owned
corporation with its headquarters in Mumbai, Maharashtra. As of
December 2013, it had assets of US$388 billion and 17,000 branches,
including 190 foreign offices, making it the largest banking and
financial services company in India by assets.State Bank of India is
one of the Big Four banks of India, along with Bank of Baroda, Punjab
National Bank and Bank of India.

The bank traces its ancestry to British India, through the Imperial Bank
of India, to the founding, in 1806, of the Bank of Calcutta, making it
the oldest commercial bank in the Indian Subcontinent. Bank of
Madras merged into the other two "presidency banks" in British India,
Bank of Calcutta and Bank of Bombay, to form the Imperial Bank of
India, which in turn became the State Bank of India. Government of
India owned the Imperial Bank of India in 1955, with Reserve Bank of
India (India's Central Bank) taking a 60% stake, and renamed it the
State Bank of India. In 2008, the government took over the stake held
by the Reserve Bank of India.

41
 Fig 1.7 Shareholders of SBI (%)

SBI has 14,816 branches in India, as on 31 March 2013, of which 9,851

(66%) were in Rural and Semi-urban areas. In the financial year 2012-
13, its revenue was INR 200,560 Crores (US$36.9 billion), out of which
domestic operations contributed to 95.35% of revenue. Similarly,
domestic operations contributed to 88.37% of total profits for the same
financial year.The Israeli branch of the State Bank of India located in
Ramat Gan.As of 28 June 2013, the bank had 180 overseas offices
spread over 34 countries. It has branches of the parent in Moscow,
Colombo, Dhaka, Frankfurt, Hong Kong, Tehran, Johannesburg, London,
Los Angeles, Male in the Maldives, Muscat, Dubai, New York, Osaka,
Sydney, and Tokyo. It has offshore banking units in the Bahamas,
Bahrain, and Singapore, and representative offices in Bhutan and Cape
Town.

Private Bank ICICI Bank

ICICI Bank Canada is a wholly owned subsidiary of ICICI Bank Limited,
which has its headquarters in Mumbai, India. ICICI Bank Limited is
India's largest private sector bank as measured by asset base as of
December 31, 2009 and the second largest bank in the country with
consolidated total assets of about US $103 billion as of December 31,
2009. ICICI Bank Limited's subsidiaries include India's leading private
sector insurance companies and among its largest securities brokerage
firms, mutual funds and private equity firms. ICICI Bank Limiteds
presence currently spans 19 countries.Established in December 2003,
ICICI Bank Canada is a full-service direct bank in Canada with an asset
base of about C $5.8 billion as of December 31, 2009. It carries on
business under Canada's Bank Act and operates under the supervision
42
of the Office of the Superintendent of Financial Institutions. It is a
member of the Canadian Bankers Association, ("CBA") as well as the
Canada Deposit Insurance Corporation ("CDIC"). CDIC insures eligible
Canadian dollar deposits at member institutions having tenures of up
to five years (up to $100,000 per depositor).

43
 Fig 1.9 Shareholders of ICICI (%)

SWOT ANALYSIS OF STATE BANK OF INDIA

Strength

The biggest bank in the country. SBI is the largest bank in India in terms of market
share, revenue and assets. Has a separate act for itself. Thus a special
State privilege.
Bank of India is constituted under THE STATE BANK OF INDIA ACT, 1955 . Biggest
branch network in the c ountry. As per recent data the bank has more than 13,000
outlets and 25,000 ATM centres. The bank has its presence in 32 countries engaging
currency trade all over the world. The bank has a merged with State Bank of
Saurashtra, State bank of Indore and thebank is planning to go further acquisition in
the current FY2012. SBI has the first mover advantage in commercial banking
service SBI has recently changed its vision and Mission statements showing a sign of
inclination towards new age banking services

44
Weakness

Huge amount of staff. SBI has the largest number of employees in

banking sector, hence the bank spends a considerable amount of its
income in employees salary compensation. Expected to experience
high level of attrition due to retirement of its top management.
Employees show reluctance to solve issues quickly due to higher job
security and customers waiting period is long when compared to
private banks. Still carries the image of the old Govt. sector bank.
Lack of proper technology driven services when compared to private
banks. In spite of modernization, the bank still carries the perception
of traditional bank to new age customers. SBI fails to attract salary
accounts of corporate and many government sector employees salary
accounts are also shifted to private bank for ease of operations unlike
before.

Opportunities

Pool in talent to replace the going top management to serve the next
generation. Young and talented pool of graduates and Bschools are in
rise to open new horizon to so called old government bank Since the
bank is yet to modernize few of its banking operations, there is a
better scope of using advanced technologies and software to improve
customer relations. Make better use of its CRM. SBI is planning to
expand and invest in international operations due to good inflow of
money from Asian Market.

Threats

Fall in Net profit shows the reduce in market share to its close
competitor private banks like HDFC, AXIS bank etc. New bank licenses
by RBI. FDIs allowed in banking sector is increased to 49% , this is a
major threat to SBI as people tend to switch to foreign banks for better
facilities and technologies in banking service. Foreign banks that have
sophisticated products. Customer prefer to switch to private banks
and financial service providers for loans and mortgages, as SBI
involves stringent verification procedures and take long time for
processing.

SWOT ANALYSIS OF ICICI BANK

Strength

45
Front runner in the Indian Private Banking Sector.ICICI is the second
largest bank in terms of total assets and market share Total assets of
ICICI is Rs. 4062.34 Billion and recorded a maximum profit after tax of
Rs. 51.51 billion and located in 19 countries. Strong presence via its
branches. One of the major strength of ICICI bank according to
financial analysts is its strong and transparent balance sheet. The
bank has PAN India presence of around 2,567 branches and 8003
ATMs ICICI bank is the first bank in India to attach life style benefits to
banking services for exclusive purchases and tie ups with best brands
in the industry such as Nakshatra, Asmi, Ddamas etc ICICI bank has
the longest working hours and additional services offering at ATMs
which attracts customers Marketing and advertising strategies of ICICI
have good reach compared to other banks in India.

Weakness

Too much competition in the banking sector affecting employee and

customer management.Many branches in urban areas has led to high
cost.Customer support of ICICI section is not performing well in terms
of resolving complaints.There are lot of consumer complaints filed
against ICICI.ICICI bank has the most stringent policies in terms of
recovering the debts and loans, and credit payments. They employ
third party agency to handle recovery management.

There are also complaints of customer assault and abuse while

recovering and the credit payment reminders are sent even before the
deadlines which annoys the customers.The bank service charges are
comparatively higher.The employees of ICICI are bank in maximum
stress because of the aggressive policies of the management to win
ahead in the race. This may result in less productivity in future years.

Opportunities

Opening more branches in the rural areas. Use of technology to

penetrate rural markets. Banking sector is expected to grow at a rate
of 17% in the next three years .The concept of saving in banks and
investing in financial products is increasing in rural areas as more than
62% percentage of Indias population is still in rural areas. The total
number B-schools in India are more than 1500. This can ensure
regular supply of trained human power in financial products and
banking services .Within next four years ICICI bank is planning to open
1500 new branches Small and non performing banks can be acquired

46
by ICICI because of its financial strength .ICICI bank is expected to
have 20% credit growth in the coming years. ICICI bank has the
minimum amount of nonperforming assets.

Threats

Ever changing RBI policies. International and other Competitors.

Inability to adapt to changing conditions due to large sizeRBI allowed
foreign banks to invest up to 74% in Indian banking Government
sector banks are in urge of modernizing the capacities to ensure the
customers switching to new age banks are minimized HDFC is the
major competitor for ICICI, and other upcoming banks like AXIS, HSBC
impose a major threat .In rural areas the micro financing groups hold a
major share Though customer acquisition is high on one side, the
unsatisfied customers are increasing and make them to switch to
other banks

47
3.3 Research Methodology

3.3.1. Research Design-

The nature of research used is Causal and the research methodology

adopted for this research used is quantitative.

3.3.2. Data collection sources

Primary-
Interview and feedback from the 20
SMEs Interviewed 10 bank officers.

Secondary-
This include Data available from various Trusted Website & Business
Dailies.

3.3.3. Data Collection Method

The data was collected through survey & Interaction with retailers.

3.3.4. Data collection Instrument

The data collection instrument used is questionnaire.

Questionnaire in the project consists of-

Closed ended
Open ended

48
3.3 Limitations of the project

Limited time period.

The research is based on data collected from the mumbai city.
Most of the respondent do not give accurate data or information.
The secondary data is collected from secondary sources like books
which may lack authentication.
It is extremly difficult to persuade to respond to questionnaire.
Some of the respondent were not co-orperative and may seem to have
no interest.

49
 Chapter 4
Analysis & Findings

SME'S

VISITED:- 1)

Harudas Jewellers

2) Anuj Investments

3) Gautam Products

4) New India Chemicals

5) Bhuldeep Engineering 6) Anteres Global Logistics

7) Akansha Pvt. Ltd.

8) Sakshi Chem-Science Pvt. Ltd.

9) Shreeji Properties

10) Mudeer Leather Works

50
DoshiTradingCo. RajendraKumar
Kantilala

A.S Engineering
Priya
Works.
Manufacturing

S.K Steel
Corporation LakhaniMasala

Soham Autogas Max Corporation

Systems LTD.

Mantri Engineering
Shubham Builders Works.
and Developers

51
Bank's Interviewed:-

1) SBI

2) BOB

3) AXIS

4) UNION BANK

5) ICICI

6) DNSB

7) HDFC

8) DENA

9) CANARA

10) YES BANK

Years In Business

1.10 No. of SMEs

52
 Out of the 20 SMEs that we visited 10 where in business for more than
10 years about six where in the range of five to ten years and four of
them where in the range of one to five years.

Annual Turnover
1. A measure of how quickly a fund turns over its holdings during the
year. A highly active fund will have a high annual turnover. It is
equal to the dollar transaction volume of the trades in one year
divided by the total portfolio size, expressed as a percentage.

2. For a company, the amount of business it conducts during a year,

usually measured through income or sales.

1.11 Turnover

Preferred Banks by SMEs

Fig 1.12 Banks Preference (%)

53
Analysis of Banks Based on Preference

Fig 1.14 Private Banks

Convenience of Interest Rates of Banks

Fig 1.15 National

Banks

54

Fig 1.13 National Banks

 Fig 1.16 Private Banks

Analysis of Unnecessary Charges Applied by

Banks

Fig 1.17 National Banks

55
56
Fig 1.18 Private Banks

57
Ratings Based on Services
When we spoke to the SMEs most of them had one view i.e. it is very difficult t
procure a loan from nationalized banks and the service received in these banks
not up to the mark. SMEs rated Bank of Baroda and Bank of India the Highest i
terms of Loan services. Whereas they rated Union Bank the lowest in terms of
Behaviour. The SME s had positive feedback about Private sector banks. They rate
HDFC bank and ICICI bank the highest in terms of loan services where as they
HDFC and ICICI bank the lowest in terms of ability to handle problems.

The rating varied from SME to SME for het same bank, they were of the opinion that
services differ from branch to branch. They said that Private Banks had better
of issuing, better loan services, and easier access.

Fig 1.12 Average Ratings

58
Issues in Nationalized Bank

CANAR
Banks SBI BOI BOB A DNSB

Lack of assistance 25% 100% 50% 50% 100%

Security Concern 50% 50%

High interest rate 25%

Quality of service 25% 50%

Waiting 100% 100%

Impersonality of the
service

No disadvantage

Issues in Nationalized Bank

Banks ICICI HDFC AXIS KOTAK Others

Lack of assistance 100%

25.00 100.00
Security Concern 33% % %
33.33 25.00 100.00
High interest rate % % %

Quality of service
25.00
Waiting %
Impersonality of the
service
25.00
No disadvantage % 100%

59
Ratings For Banks

State Bank of India Bank of India and Bank of Baroda were the three banks to
receive the maximum ratings.

Analysis of Response Sheet for Banks

Reasons for providing loans

Es:
to SM
The SME sector in India is incredibly heterogeneous in terms of size of the
enterprises, variety of product and services produced and levels of technology
employed. This sector has immense potential yet this sector faces certain
impediments of growth o wing to some factors primarily financing for the nurseries
of entrepreneurship being the major one out of them.

60
The reasons for providing for SMEs are given below:

Great growth chances for the SMEs as well as the Economy by

adhering to Government of India Guidelines:

The SMEs play a catalytic role in development of India. In India

significant proportion of them are in manufacturing, exports and
employment. The SME sector is the backbone of the economy
contributing 45% of the industrial output, 40% of Indias export,
employing about 6 crore people, creating around 13 lakh jobs and
producing more than 8000 quality products per year. There are
approximately 3 crore SMEs in India and 1.2 crore are expected to join
forces. The sector is growing at 8% p a. More than 30% growth rate in
the number of entrepreneurs was witnessed in the case of Goa, Uttar
Pradesh, Tripura, Chandigarh, Assam and Mizoram. Similarly funding
will help promote new entrepreneurs.

Low Risk Involved:

India is a challenging country for many businesses. There are many

key barriers in market penetration. There is a financial gap in the
system. It is estimated that just over 30% of the firms operating in this
sector have access to financial institutions while others raise capital
through informal financiers, friends, family and other sources. This
lack of credit assistance to the msmes is a due variety of issues such
as poor financials of the enterprise, inexperienced entrepreneurs, and
lack of collateral and infrastructure say experts. Despite several
measures the gap has widened. Banks should build up their risk
assessment and risk management capabilities and provide for any
instances of failure as part of their risk mitigation process. The top
management of banks should put in place a credible proactive and
functional monitoring mechanism to review the progress in actual
concrete outcomes. If the entrepreneurs are insured and helped, they
will be able to work more productively and contribute in a better
manner. This will help promote new entrepreneurs to enter the
market.

To promote entrepreneurship and bail out SMEs

SMEs are growth engines of the nations economy and therefore

backed by several schemes to boost their performance which is
61
 primarily stunted due to lack of timely funding. There are many
initiatives and programs to provide impetus to this sector. The SME
industry was allocated Rs 10,330 crore during the 11th plan (2007-
2012) which was increased to Rs 24,124 crore in the 12th plan (2012-
2017).

As the availability of timely and adequate credit is a key requirement

of this sector banks should introduce single window facility for
providing loans. They can set up centralized processing centers
specifically to cater to clients who will handle appraisal, sanction,
documentation, monitoring, and renewal and enhancement activities.
The government should also considering lowering the interests. The
Government should strive to create a favorable environment for SMEs
that curbs the need for debt and capital. This could be achieved by
setting up SME focused banks and NBFCs that accord priority to SME
sector lending. There is an urgent need to register the unregistered
units into the organized sector. Thus these activities can help promote
entrepreneurship and bail out SMEs which are facing a crisis.

Documents required for loan:

1. Certified copy of Memorandum and Articles of Association /Certificate

of
Incorporation /Certificate of Commencement of business/ Partnership
Deed / Trust Deed / Bye-laws/Registration Certificate from Registrar of
firms / Societies, as the case may be.
2. Audited Financial statements for the last three years of the
applicant unit (if in existence).
3. Audited financial statements for the last three years of all the
associate concerns of the applicant unit.
4. List of present shareholders.
5. List of present Directors/ Partners with respective forms for the
changes, if any, submitted with ROC.
6. IT / Wealth Tax assessment orders / returns /certificates for the last 3
years in respect of the applicant unit (if in existence)
7. IT / Wealth Tax assessment orders / returns / certificates for the last 3
years in respect of all the promoters.
8. IT / Wealth Tax assessment orders / returns / certificates for the last 3
years in the respect of all the associate concerns.
62
9. Sales tax Returns and assessment orders for the last three years (if in
existence).
10. Copy of Ration card/Passport / Voter ID card of all the
promoters / directors / guarantors.
11. Photograph of all the promoters / directors / guarantors with
signatures duly certified by their bankers.
12. Bio data and Net worth statements of the promoters / directors /
guarantors duly signed by the concerned individual.

13. Title Documents such as Sale / Lease Deed / Agreement for the
land and buildings on which the project is operated / to be set up.
14. Govt order / permission converting the land into industrial land,
if required.
15. Locational / site map of the land showing contour lines, the
internal roads, power receiving station, etc.
16. Building Plan
17. Estimate of building by the Architect
18. Performa Invoices/ quotations from machine suppliers for each
item of plant and machinery and miscellaneous fixed assets proposed
to be purchased under the project along with a write up on the
technical specifications, advantages, etc. of the machinery.
19. Brief write up on the marketing.
20. Copies of the sanction letters for the present credit facilities to
the company / Associate concerns
21. SSI registration certificate.
22. NOC/Consent from Pollution Department
23. Power sanctioned and installed, in case of existing unit with
latest power bill
24. Detailed Project Report, if any.
25. Details about Key managerial/technical personnel
26. Manufacturing process with flow chart
27. Copy of the Sale deed/ Lease deed of the collateral securities
28. Detailed list of existing plant & machineries
29. Collaboration agreement and related details including copy
approval from RBI / Govt., if required.
30. Agreement with technical consultants (if any) and related details
including copy approval from RBI / Government if required

63
31. Certified copy of Memorandum and Articles of Association
/Certificate of
Incorporation /Certificate of Commencement of business/ Partnership
Deed / Trust Deed / Bye-laws/Registration Certificate from Registrar of
firms / Societies, as the case may be.

Out of these documents there are few documents that banks have placed
first on the priority list, they are as follows

81.82% of banks- Balance sheet of last three years

63.64% of banks Financial Stability Report
36.36% of banks- Project Cost
18.18% of banks- Future Balance Sheet

Interest Rate on Loans to SMEs

The Banks providing on 14% Interest rate:

DNSB
Bank of Baroda

The Banks providing on 12% Interest rate:

ICICI Bank
AXIS Bank
Yes Bank
UNION Bank
SBI Bank
HDFC Bank

The bank providing on 11% Interest rate:

Dena Bank

The bank providing on 10% Interest rate:

Canara Bank

Guarantee for Loans

The following are the percentages of the kind of guarantees

accepted for loans to SMEs:
64
Personal Asset-45.45%
There is a significant rise in using personal asset as a guarantee for
gaining a loan. Assets are persons or things that can produce value.
Things which are assets have value for the owner because they can be
converted into cash. Cash on hand is also considered an asset. Usually
we find people providing some personal property as a guarantee

Collateral Securities- asset.27.27%

A form of secondary protection sometimes required by a bank and
intended to guarantee a borrower's performance on a debt obligation.
The primary security on a substantial business loan is typically the
thing that is being financed, such as a factory, company car or
shipment, but secondary or collateral security might also be requested
by a bank to help assure that the loan will be repaid.

Company Mortgage-27.27%
In case the company falls into a financial crisis, the bank can claim the
security which is the company in this case.

No guarantee-18.18%
These are known as unsecured loans which don not require any
guarantee and are most likely to cause loss on account of failure or
closure.

Time for Completion of Loan Procedure

Different Banks have different time period for sanctioning a particular
loan, some may take few days while some may take many. Below
mentioned is the time taken by these prominent banks to sanction a
loan for an SME. The Union Bank takes the longest time almost a
month while Dena Bank sanctions within a day

30 Days- Union Bank

21 Days- ICICI Bank and Bank of India

20 Days- Axis Bank

18 Days- HDFC Bank and DNSB Bank

65
 15 Days- State Bank of India

9 Days- Yes Bank

7 Days- Canara Bank

4 Days- Bank of Baroda

1 Day- Dena Bank

Loan recovery process

Monthly Installments

Customers can repay their loan by paying monthly installments

through cash. They can also use Internet banking for the same. Post-
dated Cheques on ECS. Customers can also repay their loan with the
help of a post-dated cheques.

Loan Defaulters
When we approached the bank officials to know about the steps or
actions they take against the loan defaulters they were reluctant to
disclose the complete procedure. Later on they agreed to tell us some
common measures which they take. These measures were common
with all the banks that we approached. Few of them are as follows:

Send legal notice

Hire 3rd party recovery agents

Taking possession of company assets

Special Facilities for SMES

Cash Credit Facility-

Banks offer Cash Credit facilities to meet the day-to-day working
capital needs of its customers. Cash Credit is provided against the
primary security of stock, debtors, other current assets, etc., and/or
collateral security of movable fixed assets, immovable property,
personal or corporate guarantee, etc. Interest is charged not on the
sanctioned amount but on the utilized amount.

66
 Export Finance
Banks provide finance for export activities in the form of Pre-Shipment
Credit against firm order and or Letter of Credit and Post shipment
credit. Credit is available for procuring raw materials, manufacturing
the goods, processing and packaging the goods and shipping the
goods. Finance is provided in Indian or foreign currency depending
upon the need of the borrower.

Term Loan
Given the growth opportunities the business enjoys the customers
may need longterm funds for capex or capacity expansions or plant
modernization and so on. Keeping these requirements in mind banks
provide term loans up to acceptable tenor with suitable moratorium, if
required, and repayment options structured on the basis of customers
estimated cash flows. These loans are primarily secured by a first
charge on the fixed assets acquired through the loan amount. Suitable
collateral security is also taken whenever required.

67
 Chapter 5
Conclusion & Recommendations

5.1. Salient Conclusion from the Project

Loan processing is much easier in Privatized Banks. Private Banks
have higher ease of access. Private Banks have high rate of interests.
Nationalized banks have better rate of interests. Nationalized banks
have high processing time.

Credit provided by the banks is an important source of finance for the SME. But the
bank has to check the acceptability of the SME before they can sanction the loan to it.
Along with this, the assessment of the credit needs of the SME also has to be done by
the bank. This entire process is called the credit appraisal process of the bank. Before
sanctioning a loan to the SME, in general, these following things are taken into
consideration- the track record of the SME, the risk profile of the SME, and the ability
of the SME to repay the loan disbursed.

Generally, while performing the credit appraisal process, the bank takes into
consideration the borrowers profile , the facilities of credit delivery required by the
SME, the security cover which the corporate can provide, the conduct/value of the
account of the corporate, the favorable conditions and the mitigants to the project for
which loan is required, the financial position o the SME, the credit rating of the SME,
RBI and the banks norms relating to the exposure to the industry, region, the margin
norms etc.

RBI has also initiated a number of measures to increase credit flow to the MSME sector
which, inter alia, includes asking all banks branches to make a concerted effort to
provide credit cover to at least five new SMEs, speedy disposal of loan applications of
small-scale units, introduction of a debt restructuring mechanism to nurse sick SME
units back to health and a one-time settlement scheme for sick small NPA accounts,
specialized SME branches in an identified cluster or centre, and periodic review of the
flow of credit to SMEs.

5.2. Recommendations

Loan processing is much easier in Privatized Banks. Private Banks have higher ease of
access. Private Banks have high rate of interests. Nationalized banks have better rate of
interests. Nationalized banks have high processing time.

68
69
 ANNEXURES

For SMEs

** NOTE:
- Please Tick the appropriate box.

Name of the Enterprise?

Nature of Business :

Years in Business :

< 1 Yr 1-5 Yrs 5- 10 Yrs > 10s Yr

Annual Turnover of your Business :

20- 30 Lakhs 31-50 Lakhs 51-100 Lakhs > 1ore

Cr

Preferred bank category for loan?

Nationalized Private Both

Preferred bank in Case of nationalized Category

SBI
BOI
BOB
Union Bank of India
IDBI
Other
If Other, Mention

Preferred bank in Case of Private sector?

ICICI
HDFC
AXIS

70
71
 ING Vysya Bank
Kotak Mahindra
Bank
Are the rates of interest offered by your bank convenient to
Other your business?
If Other, Mention
CANT SAY

Do you think your bank has levied some

YES NO
unnecessary charges?

CANT SAY

YES
Rate your bank on the basis of Nationalized
NO following Banks Private Banks
services
Bad Fair Good V.Good Excellent Bad Fair Good V.Good

Excellent

1) Loan services
2) Staffs knowledge
on services
What are the Common Issues / concerns you faced while procuring loan
3) Staffs behavior
from your bank?
4) Speed of issuing
loans
Quality of service
5) Easy Access
Waiting
6) Ability to address
Problem Impersonality of the
service No
Disadvantage

Lack of assistance
Security concern
High interest rate
Limited service

If any other Issue please

specify

67
 Rate the overall experience with your bank on the scale 1 to 5 where
1 = Poor
2 = Fair
3 = Good
4 = Very Good
5 = Excellent

THANK YOU!

Address- :

Contact No.
- :

68
 Bibliography
Statistical Tables Related to Banks in India, Reserve Bank of India, Retrieved from
http://www.rbi.org.in

Micro, Small and Medium Enterprises, Reserve Bank of India, 30 December 2013,
Retrieved from http://www.rbi.org.in

Shareholding Pattern, 30 June 2013, Retrieved from MoneyControl.com.

Market share, Retrieved from http://www.profit.ndtv.com

Top Companies in India by Market Capitalization BSE, 6th August 2014, Retrieved
from http://www.moneycontrol.com/stocks/marketinfo/marketcap/bse/banks-
publicsector.html

Indian Banking Sector, January 2013, Retrieved from http://www.ibef.org

Top Companies in India by Net Sales, August 2013,

Retrieved from http://www.moneycontrol.com/stocks/marketinfo/netsales/bse/banks-
public-sector.html

Top Companies in India by Net Sales, August 2013,

Retrieved from http://www.moneycontrol.com/stocks/marketinfo/netsales/bse/banks-
private-sector.html http://www.moneycontrol.com/financials/icicibank/profit-
loss/ICI02#ICI02

RECENT TRENDS IN INDIAN BANKING INDUSTRY, Sanjay Kumar Dhanwani,

Retrieved from http://www.abhinavjournal.com https://www.sbi.co.in

History, ICICI bank, Retrieved from http://www.icicibank.com/aboutus/history.page

SME Segment, Loan Schemes, Retrieved from

http://www.sbi.co.in/portal/web/interestrates/sme-segment

Loans for SME Segment, Retrieved from

http://www.icicibank.com/businessbanking/business-loans/working-capital/loans-
for-sme-segment.page?

www.rbi.com
www.crisil.com
www.careratings.com
www.economictimes.com
69