Professional Documents
Culture Documents
Bes'S Institute of Management Studies and Research
Bes'S Institute of Management Studies and Research
On
BY
May 2011
A
PROJECT REPORT
ON
SUBMITTED BY
Abhishek Krishnakumar Rane.
MMS
Roll No.39
DECLARATION
Place: Mumbai
Date: 21st July, 2011.
ACKNOWLEDGEMENTS
I wish to express my gratitude to Mr. P .M .PATEL & Mr. ASHEESH PANDEY
from the Union Bank of India for providing me valuable information.
I would like to express my thanks to various people from the Union Bank of
India for their support and direction.
Place: Mumbai
Date: 21st July, 2011
Sr.
No.
1
2
4
5
6
7
8
Contents
Executive summary
Introduction banking industries
2.1 Global scenario of banking industry
1
2
5
6
9
10
18
10
Page No.
Marketing
9.1 Recovery of Credit
9.2 Grievance Redressal
9.3 List and profile of Local Competitor for industrial finance branch
Finance
10.1 Financial performance of union bank of India
11
12
13
14
16
17
19
20
22
24
25
26
28
32
33
34
11
35
36
37
38
15
55
16
17
18
19
56
57
59
60
12
13
14
39
40
42
44
45
46
47
48
1. EXECUTIVE SUMMARY
I work in IFB (Industrial finance branch) on the POWER PROJECT the aspect of the
power project finance and work done on OPPORTUNITIES IN POWER SECTOR
AND ITS CREDIT VIABILITY in this we learn the how the finance institution are
provide finance for this sector. The Union Bank of India is providing the finance in
three main sectors like PORT, POWER, and ROAD projects.
Availability of power is one of the important ingredients for industrial growth. It is an
important infrastructure facility without which no industrial activity can be thought of
in modern times. Increasing automation of Indian industries has created huge
demand of power in India. This huge demand has resulted into demand supply gap
in India in recent times. The main purpose of the project is to understand the whole
concept of Project financing, and its methods and needs of project financing. The
objective of this report is to get a comprehensive and apparent knowledge of the
power sector, and to study the changes in power sector over a period of time there
by analyzing various aspects of the power sector.
This study examines the power project finance in India. The power sector has
increased significantly during the last decade and has met the needs of the people in
India. This study evaluated project structure, risk allocation, and other issues. This
study benefits from a substantially greater base of activity to systematically evaluate
power project finance sources, project and financial structures, and other factors for
the entire market.
The objectives of this study were to evaluate trends in power project finance and to
examine the risk-sharing arrangements between private investors and host
governments that enable private power projects to obtain non-recourse finance.
A key objective was to assess financing structures, sources of funds, and regulatory
trends for a subset of the power market involving limited. Recourse finance of power
projects that sell power to utility off-takers but that are not majority-owned by the offtakers.
This study also includes how the credit disbursement takes place at the UBI and the
process involved in it. The various analyses about the financial statements and the
profitability and the DSCR.
2. Introduction
Banking industries
Bank may be defined as a financial institution which is engaged in the business of
keeping money for savings and checking accounts or for exchange or for issuing
loans and credit etc. A set of services intended for private customers and
characterized by a higher quality than the services offered to retail customers.
Based on the notion of tailor-made services, it aims to offer advice on investment,
inheritance plans and provide active support for general transactions and the
resolution of asset-related problems.
The essential function of a bank is to provide services related to the storing of
deposits and the extending of credit. Basic function may include Credit collection,
Issuer of banking notes, Depositor of money and lending loans.
Now a days banking is not in its traditional way , with the advancement of
technology its focusing on more comfort of customer providing services such as:
Online banking
investment banking
electronic banking
internet banking
pc banking /mobile banking
e-banking
The importance of banking sector is immense in the progress and prosperity of any
State or country.
The economic progress and prosperity comes from the well-rounded development
and an impeccable banking management. Banks in general, governmental and
private, have eased our financial transactions, security, and facilitated the funding for
establishing a business or industry.
Business banking industry is the industry in business banking dealing with the
different banking transactions which take place while conducting a business.
Business banking can also be referred to as commercial banking. Business banking
industry deals with all the functions ranging from transferring funds, business loans,
online business transactions etc.
The success of a business largely depends on selecting the correct bank for carrying
out all the transactions efficiently.
Banks falling under the category of business banking industry offer different charges
and rates for the different business banking services. One needs to check and
compare the charges offered by the different banks.
2
One needs to understand that opening an account under the business banking
industry is vital as one is expected to maintain a long relationship with
the bank offering business banking services.
Many
prefer
to bank with
the
same bank where one has the personal bank account. If an individual has
maintained a good track record during the tenure of personal banking , it can work to
ones advantage for availing the different business banking services offered by
the business banking industry.
The bank is required to have a business banking team
Services offered by the business banking service team
Cost of the services offered by the bank offering business banking
services under business banking industry.
Whether the bank offering business banking services imposes fee for every single
transaction or a lump sum for a particular category of transaction. There are
some banks which impose fees for performing monetary transactions on behalf of
the business banking account holder. One needs to clarify the same.
The business banking industry also requires that the bank offering business banking
services should have a local branch situated in the city of the business banking
account holder. Once a bank is selected an individual is required to open an
account. The type of account one should go for is determined by the number of
transactions taking place every day.
Under the business banking industry the following types of business banking
accounts may be required by an entrepreneur. Current account: This can be used for
carrying out everyday transactions including payments, taking deposits.
Instant access deposit account :
This type of bank account is not needed for daily transactions.
Term deposit account:
In this type of account, the money is not required for the daily transaction. Not only
that the money is not likely to be required for quite some time.
Foreign currency account:
A foreign currency account is required when an entrepreneur wishes to trade in a
foreign country.
Loan account:
When an entrepreneur is intending to take a loan for business purpose.
Merchant account:
With the help of a merchant account, one is able to carry out transactions involving
credit cards and debit cards.
There are some banks which impose fees and charges for every transaction made.
There are yet others whose fee system may be different.
Changing banks according to ones convenience:
In the event when one is not happy with the services of the existing bank providing
the business banking services, one may at ones change banks for better services.
Transaction with foreign
currency:
If an individual needs to constantly deal with foreign currency as part of ones
business requirements, one should check as to how the bank offering
business banking facilities with regard to the following matters:
Offers guidance with regard to dealing with ones business products in the light of
foreign countries as well as foreign currency. How one should restructure ones
strategy with the changing currency rates and the risks involved in the same. The
utilities in carrying out transaction with foreign currency.
Providing
credit
cards
and
debit
cards
for
ones
business:
The bank providing business
banking facilities
should
also
provide debit
cards or credit cards which are universally accepted.
Business banking industry requires that the bank should provide debit cards or credit
cards to individuals offering the maximum or optimum advantages as per the
requirements of the business banking holder.
Accepting payments by means of credit cards as well as debit cards:
One should furnish all the details of ones business to the bank offering business
banking services. One can avail of a card transaction system by fulfilling the
formalities with the bank. The risks involved in accepting payments by plastic
cards should be reckoned.
Payments online:
If a business firm decides to accept payments through the Internet, appropriate
arrangements in accordance to the banking norms are to be set up for carrying out
transaction on line.
Online transactions are more susceptible to fraud and one needs to be extra careful
if at all an online payment acceptance method is opted for.
unfamiliar types of risk. In addition to the traditional credit risk, financial risk1 has
risen and is now playing a crucial role. Banks thus need integrated risk management
techniques that can measure and manage market risk in a timely and effective
manner.
2.2 Indian scenario of banking industries
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.
Indian merchants in Calcutta established the Union Bank in 1839, but it failed in
1848 as a consequence of the economic crisis of 1848-49. The Allahabad Bank,
established in 1865 and still functioning today, is the oldest Joint Stock bank in
India.(Joint Stock Bank: A company that issues stock and requires shareholders to
be held liable for the company's debt) It was not the first though.
That honor belongs to the Bank of Upper India, which was established in 1863, and
which survived until 1913, when it failed, with some of its assets and liabilities being
transferred to the Alliance Bank of Simla.
When the American Civil War stopped the supply of cotton to Lancashire from
the Confederate States, promoters opened banks to finance trading in Indian cotton.
With large exposure to speculative ventures, most of the banks opened in India
during that period failed.
The depositors lost money and lost interest in keeping deposits with banks.
Subsequently, banking in India remained the exclusive domain of Europeans for next
several decades until the beginning of the 20th century.
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 centre.
The first entirely Indian joint stock bank was the Oudh Commercial Bank, established
in 1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank,
established in Lahore in 1895, which has survived to the present and is now one of
the largest banks in India.
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 presidency banks dominated banking in India but there were also some
exchange banks and a number of Indian joint stock banks. All these banks operated
in different segments of the economy. The exchange banks, mostly owned by
Europeans, concentrated on financing foreign trade.
Indian joint stock banks were generally undercapitalized and lacked the experience
and maturity to compete with the presidency and exchange banks. This
segmentation let Lord Curzon to observe, "In respect of banking it seems we are
behind the times. We are like some old fashioned sailing ship, divided by solid
wooden bulkheads into separate and cumbersome compartments."
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.
The fervour 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 nationalised banks started in this district and also a leading private sector bank.
Hence undivided Dakshina Kannada district is known as "Cradle of Indian Banking".
During the First World War (1914-1918) through the end of the Second World
War (1939-1945), and two years thereafter until the independence of India were
challenging for Indian banking.
The years of the First World War were turbulent, and it took its toll with banks simply
collapsing despite the Indian economy gaining indirect boost due to war-related
7
economic activities. At least 94 banks in India failed between 1913 and 1918 as
indicated in the following table:
Years
Number of banks
that failed
Authorised capital
(Rs. Lakhs)
Paid-up Capital
(Rs. Lakhs)
1913
12
274
35
1914
42
710
109
1915
11
56
1916
13
231
1917
76
25
1918
209
Nationalized
bank
Deposits
Advances
Interest
Income
1
2
3
4
5
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank
of
Maharashtra
Canara Bank
Central Bank of
India
Corporation
Bank
Dena Bank
Indian Bank
Indian Overseas
Bank
Oriental Bank of
Commerce
Punjab and Sind
Bank
Punjab National
Bank
Syndicate Bank
UCO Bank
Union Bank of
India
United Bank of
India
Vijaya Bank
84972
59390
192397
189708
52255
58802
44139
143986
142909
34291
7365
5375
15092
16437
4292
Net NPA as
%
Net advances
0.72
0.18
0.31
0.44
0.79
186893
131272
138219
85483
17119
10455
1.09
1.24
73984
48512
6067
0.94
43051
72582
100116
28878
51465
74885
3448
6830
9641
0.24
0.81
1.33
98369
68500
8856
0.65
38766
24615
3247
0.32
209760
1541703
19326
0.17
115885
100222
138703
81532
68805
96534
9580
8121
11889
0.77
1.18
0.34
54536
35394
4312
1.48
54535
35468
5238
0.83
6
7
8
9
10
11
12
13
14
15
16
17
19
20
among the staff members, to address the expectations of the customers efficiently
and handle technology banking with ease.
3.4 History
Union Bank of India was inaugurated by the Father of the Nation, Mahatma Gandhi,
on November 11, 1919. Started as a limited company in Mumbai, it was one of the
few Financial Commercial banks in India. Until 1947, UBI had only 4 branches - 3 in
Mumbai and 1 in Saurashtra, all concentrated in key trade centers. Catering to all the
sectors of the society, be it agriculture, industry, trade and commerce, services or
infrastructure, the bank has also played a major role in rendering services to the
financial needs of every section. Apart from this, the bank also extended financial
support
to
educational,
housing
and
trade
sector.
Union Bank of India undertook the task of establishment of village knowledge
centers and self-employment training centers. It was in 1975, that the Union Bank of
India was nationalized. It was, then, that it merged with the Belgaum Bank, a private
sector bank. Another merger was on cards in 1985, this time with the Miraj State
Bank. Union Bank is a Public Sector Unit with 55.43% Share Capital held by the
Government of India. The Bank came out with its Initial Public Offer (IPO) in August
20, 2002 and Follow on Public Offer in February 2006. Presently 44.57 % of Share
Capital is presently held by institutions, individuals and others.
3.5 Products & Services
Deposits
Accounts
Loans
Cards
Insurance
Cash Management Service
Mutual Funds
Demat
ATMs
E Banking Or Online Banking
Remittance Service
Bill Payment Service
Tax Payment Service
Atm Banking
Tele Banking
Online Demat Trading
Cash Management Services(CMS)
Mutual Funds
Railway Tickets Booking
8% Tax Saving Bonds
Public Provident Fund (PPF)
Direct Tax Collection
Central Excise and Service Tax Collection Services
Special Savings Schemes for Senior Citizens
11
Cash credit is a short-term cash loan to a company. Term loan is a long-term loan
provided for starting a new project or for the modification, replacement or expansion
of the existing unit. Working Capital Loan is a short-term loan which the company
uses for running the day-to-day operations. Letter of Credit is a letter from a bank
guaranteeing that a buyer's payment to a seller will be received on time and for the
correct amount. In the event that the buyer is unable to make payment on the
purchase, the bank will be required to cover the full or remaining amount of the
purchase. Letter of Guarantee, like a line of credit, guarantees a sum of money to a
beneficiary. Unlike a line of credit, the sum is only paid if the opposing party does not
fulfil the stipulated obligations under the contract. This can be used to essentially
insure a buyer or seller from loss or damage due to non-performance by the other
party in a contract. Buyer's credit is the credit availed by an Importer (Buyer) from
overseas Lenders i.e. Banks and Financial Institutions for payment of his Imports on
due date.
The branch also has an independent Foreign Exchange branch which manages the
non-fund based facilities. The branch deals in acquiring the customers, getting limit
sanctioned, documentation and monitoring process.
Head Office
Union Bank Bhavan,
239, Vidhan Bhavan Marg,
Nariman Point,
Mumbai - 400 021.
Central Office
Union Bank Bhavan,
239, Vidhan Bhavan Marg,
Nariman Point,
Mumbai - 400 021.
12
SHRI S. C.KALIA
Executive Director
SHRI K.V. EAPEN
Government of
India Nominee
Shri B.M.SHARMA
Board of the Bank
DR. GULFAM MUJIBI
Nominated by Government of India as a part-time
non-official Director
SHRI ARUN NANDA
BOD
SHRI BAIDYA NATH
BHATTACHARJEE
BOD
13
"No Frills" Account scheme has been introduced to bring the down trodden and
poverty ridden masses which have been socially and financially excluded so far from
the main stream.
5.7 "Union Mitr"
As part of our initiatives and corporate social responsibility to create financial
awareness we have launched "Union Mitr" to provide financial education services
and debt counselling to all strata of the society especially the rural population, free of
cost. Initially "Union Mitr" has been established at 51 Village Knowledge Centres in
rural areas and will subsequently be rolled over to other areas of the country.
5.8 Current year Corporate Social Responsibility
Union Bank of India is actively engaged in community and social development and
pursues this goal under the aegis of specially set up Union Bank Social Foundation.
Various activities are carried out by this Foundation through a widespread presence
of 202 Village knowledge Centres (VKCs), 103 Union Adarsh Gram, 8 Financial
Literacy and Credit Counselling Centres (FLCC), 13 R-SETIs (Rural Selfemployment and Training Institutes) across the country. This includes 1 VKC and 7
FLCC enduring the year.
Each VKC assists in overall development of the village by coordinating with various
developmental agencies/Government departments and is semi ate nowledge to
farmers about latest developments in methods of cultivation, technologies, proper
use of fertilizers, pesticides etc.
Under Union Adarsh GramYojana, Bank undertakes a holistic development of the
village by converting it into a model village. Similarly, R-SETI and FLCC extend
financial literacy, counseling and training to the needy people so that they become
part of the mainstreams. During the year 2010-11, Union Bank of India extended a
donation of ` 175.65 lakh to various entities for the purpose of education, health and
medical emergency, relief, basic amenities etc. Union Bank of India is examining.
The possibility of providing the solar-powered lanterns to the households in the103
Union Adarsh Gram. The objective is to provide illumination to the electricity eprived
villages that will facilitate livelihood by increasing the productive hours for rural
entrepreneurs, help spread education, improve health, bio-conservation and
moreover, a ray of hope for everyone.
Union Bank of India is committed to its role as a responsible corporate citizen by
adopting ethical business practices and contributes to economic development
beyond its statutory obligation. The Bank fully realizes its social responsibility to
improve the quality of life of the local community and society at large. The Bank has
now moved a step ahead in this direction. In order to pay a focused attention, the
Board of the Bank has decided to set apart 1% of its annual public profits to
undertake Corporate Social Responsibility Activities through its trust named Union
Bank Social Foundation.
15
The trust would provide for infrastructure facilities in rural areas and committed to
undertaking one major project in each of the 13 lead districts across the country,
namely, Ernakulam and Idukki in Kerala, Varanasi, Ghazipur, Jaunpur,
Azamgarh,Chandauli, Bhadohi and Mau in U.P., Rewa and Sidhi in M.P. and
Samasthipur and Khagaria in Bihar.
The Bank has established Village Knowledge Centres (VKCs) in nearly 200 villages
across the country, which provides knowledge dissemination and extension services
to the rural community helping them in improving their productivity. These VKCs are
non-profit entities, fully funded by the bank.
The Bank has also established two Rural Development and Self-employment
activities in Perambavur (Kerala) and Varanasi (U.P) funded jointly by the Bank,
NABARD and respective State Governments.
6. Financial Position of union bank of India
As per annual report of 2009, 2010 & 2011
(In Thousands)
Net profit
Income
2009
1,72,72,023
13,37,19,301
2010
2,07,57,527
15,27,74,192
2011
2,08,35,729
18,49,13,987
Total Business
Net Interest Income
Operating Profit
Provisions
Net Profit
Net Interest Margin
Capital Adequacy Ratio
Gross Profit per employee (lakh)
Dividend (` per share)
Book Value per Share
FY2010
FY2011
291289
4192
3659
1584
2075
2.71%
12.51%
13.18
5.5
173.38
355483
6216
4305
2223
2082
3.33%
12.95%
15.52
8.0
213.17
Annual
Change
22.04%
48.28%
17.66%
40.34%
0.34%
62 bps
44 bps
17.75%
45.45%
22.95%
16
c. Bank has one branch outside India at Hong Kong. The business of Hong Kong
branch increased by 94.53%, though on a lower base. Deposits increased from ` 370
crore to ` 570 crore and advances increased from ` 2,977 crore to ` 5,941crore.
6.3 Financial Performance
a. Net Interest Income recorded a growth rate of 48.28% from ` 4,192 crore for the
year 2009-10 to ` 6,216 crore for the year 2010-11.
b. Total Income of the Bank increased by 21.04% from` 15,277 crore to ` 18,491
crore. Interest income was the major contributor, within which interest on advances
recorded a growth of 24.08% from ` 9,696 crore to ` 12,031 crore. Interest income on
investments increased by 14.93% from ` 3,482 crore to ` 4,002 crore. Yield on
advances stood at 9.86%for the year 2010-11 from 9.94% in the previous year. Yield
on investments, however, increased to 6.55%for the year 2010-11 from 6.32% in the
previous year, reflecting higher coupon on government securities. Total yield on
funds also recorded an improvement of 29 basis points (bps) from 8.04% to 8.33%.
c. Non-interest income increased by 3.24% from` 1,975 crore to ` 2,039 crore. The
major drag was 19.02% fall in income from profit on sale of investments due to
volatile and uncertain market conditions prevailing during the year. Excluding this
item, non-interest income growth would be 12.34%.
7. Current Strategies of Company
A logical extension of the Vision Statement is the Mission of the Bank, which
is to gain market recognition in the chosen areas.
Union Bank OF India continued with the healthy performance track record during the
year 010-11 while pursuing its broad Vision & Mission objective of becoming the
Bank of first choice in chosen areas. These objectives have short-term as well as
long-term goalposts. In the short-run, customer acquisition, business expansion and
a profitable growth are the key outcomes while in the long-run Bank pursues a
sustainable improvement in the process efficiency, product enrichment and people
productivity. Our journey towards accomplishing the Vision involves creating values
for our customers, our employees and you, our shareholders.
17
During the fiscal year 2010-11, the business environment was not so benign;
however, Union Bank of India reported healthy results. Bank also launched two
initiatives during the year, for achieving customer service excellence and building a
strong human capital chain in the organization. These two initiatives, along with a
number of enablers created in the recent years would help Union Bank of India
become one of the most preferred banks amongst the existing customer pool and
the two emerging customer classes, namely the Next Generation customers and
new Bankable class. Union Bank OF India is laying a strong foundation for a
sustainable growth in the future that would enhance the market share and
shareholders value.
8. External Environment of the Company:
8.1 Swat analysis of union bank of India
Strengths
Has been able to maintain healthy asset quality. In Q1 FY09, Gross NPAs were
2.08% and Net NPAs were 0.15% with healthy coverage ratio of 93.05%. UBI will
continue to operate with Gross NPAs of 2.00% with delinquency ratio below 1.00%.
Very good cost to income ratio of 38% in FY08 as the bank has managed to bring
down and contain its costs significantly. Has one of the best operating efficiencies in
the banking sector space.
Superior ROE (24.67% inFY08) and excellent ROAA (1.22%) reflect high
profitability of the bank.
UBI has an excellent technological platform with 100% core banking solution rollout
and increased use of electronic mode in transactions (12% of the total transactions).
This helps the bank reduce risk, improve efficiency and reduce costs significantly.
Weaknesses
Higher interest rates are putting pressure on NIM, as the bank is facing difficulty in
passing on increasing cost of funds to its customers.
The bank has large exposure in AFS category in its investment portfolio. In Q1,
FY09, AFS consisted of 32.59% of the total investment portfolio. Out of this, 55%
(Rs.63 bn) is in bond portfolio. Hardening of yields will require the bank to make
provisions for mark-to market (MTM) losses on its bond portfolio.
CD ratio has reached 73.1% in FY08. It means the bank has to rely on bulk
deposits to finance advances growth.
18
Opportunities
UBI still has a scope for improving its CASA, which is currently at 34.76%. The
bank has planned to achieve a CASA target of 40% by 2012.
Increasing share of fee-based income in operating income represents very good
opportunity for the bank. The bank is expecting its fee-based income to grow in
excess of a CAGR of 30%.
Opening of 400 new branches and expansion in the international market by
increasing its presence in 10 countries with stress on Australia, Canada, Abu Dhabi
and United Kingdom
Threats
Rising interest rates coupled with slowdown in the economy could result in higher
Delinquencies.
Increasing money supply and inflationary pressures may prompt RBI to continue
monetary tightening at least in the short-term.
8.2 Internal Environment of the Company:
Culture, Trade Union Issues not provided by company
19
9. Marketing
BCG Matrix on industrial finance branch
Stars
Question mark
SBI
Bank of Maharashtra
ICICI
Bank of baroda
HDFC
Cash cows
Dogs
Dena Bank
Bank of India
Indian Bank
Change is truly the only constant. Banks, in particular, have been following
that rule in recent times. Bank of Baroda got itself a new logo and brand
ambassador a few years ago. In recent times, UTI Bank was renamed Axis
Bank. Canara Bank, too, has revamped itself. Adding to the ever increasing
list is Union Bank of India. The bank, which was founded in 1919 and
inaugurated by the father of the nation, MK Gandhi, has undergone a change
twice in nearly 90 years of functioning. This time round, Union Bank of India,
along with its creative agency, Mudra, and Boston Consulting Group, chalked
out an agenda to create this change. Addressing the press in Mumbai, MV
Nair, chairman, Union Bank of India, says, "We learned we needed to change
now because we realised that the entire population is younger."
The other factor that prompted the rebranding exercise was technology, which
is part of life now. Union Bank of India wanted to highlight that it too had the
20
technology to reach out to its consumers. Moreover, a few more foreign banks
will soon be entering India and the bank decided it needed to prepare itself.
As part of the change, Union Bank of India will leverage technology to
centralise various processes and empower its staff in customer relationships.
The bank is also creating business verticals in the banking sector, such as
corporate banking, retail banking, etc., explained TY Prabhu, executive
director, Union Bank of India. Mudra and its new design and strategy cell,
Water, conducted the research study. "Research was conducted in various
markets with the core consumer groups of Union Bank of India," says Ashish
Mishra, chief strategist, Water, speaking to afaqs! The rebranding exercise
also includes a changed logo. This was preceded by a teaser in the form of an
outdoor. The hoarding showed a bird turning a new page to show the new
logo. Though the logo is not completely visible, the previous page shows a
section of the old logo. The logo, which now features two interlocking Us in
red and blue, stands for the consumer and the bank. Nair says, "The two U's
stand for union and the integrity, security and strength, which Union Bank of
India stands for." The colour blue represents commitment, while red is
symbolic of the passion that exists at Union Bank of India.Union Bank of India
will continue with its earlier tagline, Good People to Bank With. The creative
proposition that the bank will carry forward is, Your Dreams are not Yours
Alone. This is in a bid to indicate that the bank is ready to help fulfil
everyones dreams.With the new logo and branding, Union Bank of India
promises to the customer value for money service, a variety of channels
through which the customer can choose to carry out banking activities, a
timeline with all services offered, and absolutely no opaqueness with respect
to the services and products offered. The communication that will follow the
teaser will largely involve print and outdoor and also include a 10 second TV
commercial. The TVC will be aired in about 10 days.The budget allocated for
the branding exercise and advertising is close to Rs 75 crore, as compared to
last years Rs 32 crore.
21
4. Guidelines:
4.1. All the members of the staff or any other person authorised to represent Union Bank
of India in dues collection or/and security repossession would follow the guidelines set out
below:
General:
Before taking action for collection of dues and repossession of security, Bank would give
notice to the Borrower asking him to repay the dues and the Borrower will be generally
given minimum 15 days time to repay dues.
22
23
9.3 List and profile of Local Competitor for industrial finance branch
Sr.
No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
19
20
Nationalized
bank
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank
of
Maharashtra
Canara Bank
Central Bank of
India
Corporation
Bank
Dena Bank
Indian Bank
Indian Overseas
Bank
Oriental Bank of
Commerce
Punjab and Sind
Bank
Punjab National
Bank
Syndicate Bank
UCO Bank
Union Bank of
India
United Bank of
India
Vijaya Bank
Deposits
Advances
58802
44139
143986
142909
34291
Interest
Income
7365
5375
15092
16437
4292
Net NPA as %
Net advances
0.72
0.18
0.31
0.44
0.79
84972
59390
192397
189708
52255
186893
131272
138219
85483
17119
10455
1.09
1.24
73984
48512
6067
0.94
43051
72582
100116
28878
51465
74885
3448
6830
9641
0.24
0.81
1.33
98369
68500
8856
0.65
38766
24615
3247
0.32
209760
1541703
19326
0.17
115885
100222
138703
81532
68805
96534
9580
8121
11889
0.77
1.18
0.34
54536
35394
4312
1.48
54535
35468
5238
0.83
24
10. Finance
10.1 Financial performance of union bank of India
Net Interest Income recorded a growth rate of 48.28% from ` 4,192 crore for the year
2009-10 to ` 6,216 crore for the year 2010-11.
Total Income of the Bank increased by 21.04% from ` 15,277 crore to ` 18,491 crore.
Interest income was the major contributor, within which interest on advances recorded a
growth of 24.08% from ` 9,696 crore to ` 12,031 crore. Interest income on investments
increased by 14.93% from ` 3,482 crore to ` 4,002 crore. Yield on advances stood at
9.86% for the year 2010-11 from 9.94% in the previous year. Yield on investments,
however, increased to 6.55% for the year 2010-11 from 6.32% in the previous year,
reflecting higher coupon on government securities. Total yield on funds also recorded an
improvement of 29 basis points (bps) from 8.04% to 8.33%.
Non-interest income increased by 3.24% from ` 1,975 crore to ` 2,039 crore. The major
drag was 19.02% fall in income from profit on sale of investments due to volatile and
uncertain market conditions prevailing during the year. Excluding this item, non-interest
income growth would be 12.34%.
Inland Commision
Treasury Income
Income from Forex
Transaction
Recovery in Written - off Accounts
Miscellaneous
Total
FY-10
352
573
323
FY-11
365
464
429
Growth%
3.69
-19.02
32.82
183
544
1975
212
569
2039
15.85
4.60
3.24
(In crore)
532477
UNIONBANK-EQ
25
10.3 Table of share price for six months of Union Bank of India
AAA/Stable (Assigned)
AAA/Stable (Reaffirmed)
AAA/Stable (Reaffirmed)
AAA/Stable (Reaffirmed)
P1+ Reaffirmed)
CRISIL has assigned its AAA/Stable rating to Union Bank of Indias (Union
Banks) Upper Tier II bonds, and has reaffirmed its outstanding ratings on the
banks other aforementioned debt instruments atAAA/Stable/P1+. The ratings
continue to reflect the support that Union Bank is expected to continue to receive
from its majority owner, the Government of India (GoI). The ratings also factor in
Union Banks healthy market position, comfortable resource profile, and
adequate earnings profile. These rating strengths are partially offset by the
banks average capitalisation and moderate asset quality.
Union Bank is among Indias top 10 banks by asset size. As on March 31, 2010,
the bank had deposits and advances of Rs.1700 billion and Rs.1213 billion
respectively. As on March 31, 2010, the share of low-cost current and savings
accounts (CASAs) in the banks deposits was around 32 per cent (30 per cent
26
as on March 31, 2009). The banks borrowing cost improved to 5.5 per cent in
2009-10 (refers to financial year, April 1 to March 31) from 6.4 per cent in 200809, and compares favourably with the industry average. CRISIL believes that
Union Bank will maintain its comfortable resource profile over the medium term
on the back of its adequate deposit mix and wide branch network.
Union Banks core profitability is adequate - net profitability margin (NPM) was
1.34 per cent - in 2009-10 (1.6 per cent in 2008-09). The decline in NPM was
primarily because of the decline in the banks interest spreads, largely driven by
the decrease in its yield on earning assets, more than offsetting the decrease in
its borrowings costs. However, return on assets was stable at 1.25 per for 200910, against 1.27 per cent in the previous year, supported by improvement in feebased income and treasury gains. CRISIL believes that Union Banks ability to
increase its core fee income and manage its advances profile, thereby
maintaining a balance between yields and credit quality, will have a key bearing
on the banks earnings.
The quality of Union Banks assets is moderate. As on March 31, 2010, gross
non-performing assets (NPAs) accounted for 2.2 per cent of its total assets, an
increase from 1.96 per cent as on March 31, 2009, driven largely from slippages
to NPAs from restructured standard assets in 2009-10. Also, the banks
capitalisation is average, with a Tier I capital adequacy ratio (CAR) of 7.9 per
cent of risk-weighted assets, and an overall CAR of 12.5 per cent, as on March
31, 2010, as per Basel II norms. While the size of the banks Tier I capital is
healthy, at Rs.97 billion as on March 31, 2010, the bank has limited flexibility to
raise fresh equity capital, given that GoIs current shareholding in the bank is
55.4 per cent (regulatory minimum is 51 per cent). Union Banks adequate
profitability, resulting in comfortable cash accruals to net worth ratio, and its
stated posture that it will maintain its overall CAR in excess of 12 per cent,
support the current ratings on the banks Tier I Perpetual and Upper Tier II
bonds.
Outlook:Stable
CRISIL believes that Union Bank will continue to benefit from the support it
receives from GoI. The banks healthy business position and the support it
receives from GoI are expected to significantly reduce the challenges the bank
faces in improving its asset quality. The bank is likely to maintain its CAR at
levels that will support the current rating. The outlook could be revised to
Negative in case of a steep deterioration in Union Banks asset quality or
capitalisation; also, deterioration in capitalisation could lead to a downward
revision in the rating outlook or rating on the hybrid instruments.
27
All cheques and other Negotiable Instruments payable locally would be presented
through the clearing system prevailing at the centre. Cheques deposited at branch
counters and in collection boxes within the branch premises before the specified cutoff time will be presented for clearing on the same day. Cheques deposited after the
cut-off time and in collection boxes outside the branch premises including off-site
ATMs will be presented in the next clearing cycle. To avoid fraudulent transactions
by intercepting the cheque, customers should ensure that the cheques deposited in
collection boxes are specially crossed to Union Bank of India. Instructions to this
effect
are
displayed
on
the
Cheque.
In case of cheques deposited in all loans and advances accounts including term loan
value date credit will be given on Day-1 or Day-2 as the case may be (that is the day
on which settlement account of the Bank with RBI/SBI is credited depending on
clearing cycle at the place) for limited purpose of calculation of products for
application of interest in all loan and advances accounts including term loan.
Outstation Cheques
a) Cheques drawn on other banks at outstation centres will normally be collected
through banks branches at those centres. Where the bank does not have a branch
of its own, the instrument would be directly sent for collection to the drawee bank or
collected through a correspondent bank. The bank would also use the National
Clearing services offered by the Reserve Bank of India at centres where such
collection services exist.
b) Speed Clearing
Collection of outstation cheques, till now, required movement of cheques from the
presentation centre (city where the cheque is presented) to Drawee Centre (city
where the cheque is payable) which increases the realization time for cheques.
Speed clearing aims to reduce the time taken for realization of out station cheques.
Outstation cheque collection through collection basis takes around one to two weeks
time depending on the drawee centre. Under Speed Clearing, it would be realized
on T+1 basis viz., within 48 hours.
Speed Clearing refers to collection of outstation cheques through the local clearing.
It facilitates collection of cheques drawn on outstation core banking enabled
28
the box. Cut-off time for receipt of cheques for payment to government accounts like
Income Tax etc. will be displayed in the branches transaction government business.
Cheques/instruments sent in Speed Clearing will be realized on T + 1 day
basis.
ii) Cheques drawn on foreign countries: Foreign cheques are sent for collection to
the respective centers where they are payable through our correspondent banks for
collection. The realization depends upon the local clearing rules, which vary from
country to country and centre to centre. Normally USD cheques are returned within
15 days of presentation, except those cheques, which are fraudulent. Cheques
which are fraudulent on the face can be returned within one year and other any time.
Bank will, however give proceeds of realization within 20 days in case of USD
cheques drawn in USA, subject to the right to debit in case of fraudulent cheques. All
other foreign currency cheques are paid within two working days from the date of
receipt of statement of Nostro Account showing the credit.
The above time norms are applicable irrespective of whether cheques/instruments
are drawn on the banks own branches or branches of other banks.
Cheques / Instruments lost in transit / in clearing process or at paying banks
branch:
In the event a cheque or an instrument accepted for collection is lost in transit or
in the clearing process or at the paying banks branch, the bank shall immediately on
coming to know of the loss, bring the same to the notice of the accountholder so that
the accountholder can inform the drawer to record stop payment and also take care
that cheques, if any, issued by him / her are not dishonoured due to non-credit of the
amount of the lost cheques / instruments. The bank would provide all assistance to
the customer to obtain a duplicate instrument from the drawer of the cheque.
In line with the Banks Compensation Policy the accountholder will be compensated
in respect of instruments lost in transit in the following way:
Expenses incurred for obtaining duplicate instrument will be paid @2% of the
amount of instrument subject to maximum of Rs.500/In addition, bank will pay interest on the amount of the cheque for a maximum
period of 30 days at the rate applicable for relevant period of fixed deposit
prevailing at the time of payment of interest to provide for likely further delay
in obtaining duplicate cheque/instrument and collection thereof.
30
31
10.6 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST
MARCH, 2011
( 000' Omitted )
Year Ended
31.3.2011
Year Ended
31.3.2010
Year Ended
31.3.2009
1,64,52,61,50 1,33,02,67,91
1,18,89,37,87
I. Income
Interest earned
Other income
20,38,78,37
19,74,74,01
14,82,55,14
1,33,71,93,01
II. Expenditure
Interest expended
1,02,36,41,71
91,10,26,74
80,75,81,31
Operating expenses
39,49,99,71
25,07,84,75
22,14,11,46
22,23,03,73
15,84,38,56
13,55,44,96
1,16,45,37,73
20,81,94,72
20,74,91,87
17,26,55,28
1,63,27
83,40
64,95
20,83,57,99
20,75,75,27
17,27,20,23
6,25,00,00
6,25,00,00
5,18,00,00
61,20,07
1,00,09,05
2,17,08,28
6,22,00,00
5,72,00,00
2,59,00,00
Proposed dividend
4,19,46,59
2,77,81,49
2,52,55,89
68,59,50
47,21,46
42,92,24
80,42
2,82,00,00
4,52,00,00
4,36,00,00
5,15,92
15,91
1,63,27
83,40
20,83,57,99
20,75,75,27
17,27,20,23
39.71
41.08
34.18
Dividend tax
Transfer to foreign currency
translation reserve
Transfer to special reserve
[sec36(i)(viii)]
Provision for int. on PNCPS
Balance in Profit and Loss
Account
Total
Earnings per share (basic and
diluted)
32
(000 Omitted)
As on
31.3.2011
As on
31.3.2010
As on
31.3.2009
6,35,33,24
5,05,11,79
5,05,11,79
1,21,29,19,02
99,18,66,29
82,35,23,66
20,24,61,28,53
17,00,39,74,14
13,87,02,83,25
1,33,15,96,97
92,15,30,64
87,74,89,53
and
74,42,66,94
54,83,01,44
47,57,42,92
Total
23,59,84,44,70
19,51,61,84,30
16,09,75,51,15
1,76,10,45,32
1,24,68,24,43
89,92,04,83
24,87,99,06
33,08,44,96
69,92,88,12
5,83,99,13,72
5,44,03,52,71
4,29,96,96,37
15,09,86,08,32
11,93,15,29,86
9,65,34,23,21
Fixed Assets
22,92,78,42
23,05,43,82
23,35,15,97
Other Assets
42,07,99,86
33,60,88,52
31,24,22,65
23,59,84,44,70
19,51,61,84,30
16,09,75,51,15
15,94,27,81,97
7,23,38,05,14
8,11,47,09,92
52,58,37,22
45,65,80,31
32,31,72,07
Assets
Investments
Advances
Total
Contingent Liabilities
Bills for Collection
33
2009-10
873.45
758.00
26.65
(117.34)
1187.69
148.54
698.92
20.95
82.94
1.63
46.76
95.21
-95.86
2223.04
81.89
1584.39
- Others
TOTAL
10.9 Key ratio of Union Bank of India
Gross (Operating)
Profit
Net Profit
Return on Net
Worth
Return on Average
Assets
Dividend payout
Ratio
to Net Profit
(including
Corporate Dividend
Tax)
Credit - Deposit
Ratio
Capital Adequacy
Ratio
31.03.2009
2.28
31.03.2010
2.21
31.03.2011
2.18
1.27
24.79
1.25
23.69
1.05
18.63
1.27
1.25
1.05
17.11
15.66
23.44
73.22
73.71
78.11
8.18
7.91
8.69
34
Preparing credit
report
Determining Interest
rate
Preparation of Proposals
If approved
If not approved
If no queries raised
If queries raised
Sanction of proposals on various
terms & condition
Disbursement
35
Term Sheet
Conducting feasibility study
Credit report & Credit Rating
Determination of Interest rate
Proposal
Compliance of sanction terms
Disbursement
Follow ups/ monitoring of the account
Term Sheet
Following a favourable feasibility check, credit rating the next step is preparing term
sheet. A Term Sheet is brief document that provides details on aspects like:
Account Details
Financial highlights for immediate previous two audited years and projection
for proceeding year
Nature of Project
Cost of Project
Means of finance
1. Nature of Facility
2. Purpose
3. Tenure of Term Loan
4. Interest rate Reset
5. Margin
6. Interest Rate, Commission
Door to Door Tenor i.e. the period within which the entire amount is to be disbursed.
a)Repayment Terms
b) Prime Security
c) Collateral Security
d) Upfront fees i.e. the charges levied by the bank for processing the documents.
Conducting feasibility study
The success of a feasibility study is based on the careful identification and
assessment of all of the important issues for business success. A detailed Project
Report is submitted by an entrepreneur, prepared by a approved agency or a
consultancy organization. Such report provides in-depth details of the project
requesting finance. It includes the technical aspects, Managerial Aspect, the Market
Condition and Projected performance of the company. It is necessary for the
36
appraising officer to cross check the information provided in the report for
determining the worthiness of the project.
Project Details:
Industry description.
Describes the size and scope of the industry, market and/or market
segment(s).
Estimates the future direction of the industry, market and/or market
segment(s).
Describes the nature of the industry, market and/or market segment(s) (stable
or going through rapid change and restructuring).
Identifies the life-cycle of the industry, market and/or market segment(s)
(emerging, mature)
Industry Competitiveness.
Investigates industry concentration (few large producers or many small
Producers)
Analyzes major competitors.
Explores barriers/ease of entry of competitors into the market or industry.
Determines concentration and competitiveness of input suppliers and
product/service buyers.
Identifies price competitiveness of product/service.
Market Potential.
Identifies the demand and usage trends of the market or market segment in
which the proposed product or service will participate.
Examines the potential for emerging, niche or segmented market
opportunities.
Explores the opportunity and potential for a "branded product".
Assesses estimated market usage and potential share of the market or
market segment.
Sales Projection.
Estimates sales or usage.
Identifies and assess the accuracy of the underlying assumptions in the sales
projection.
Projects sales under various assumptions (i.e. selling prices, services
provided).
Access to Market Outlets.
37
Business structure.
Outline alternative business model(s) (how the business will make money).
Identify the proposed legal structure of the business.
Identify any potential joint venture partners, alliances or other important
stakeholders.
Identify availability of skilled and experienced business managers.
Identify availability of consultants and service providers with the skills needed
to realize the project, including legal, accounting, industry experts, etc.
Outline the governance, lines of authority and decision making structure.
Managerial Personnel
Managerial Personnel play a key role in directing the working of the company.
It is
Important for an organization to have a pool of efficient personnel who bear
the capacity to bail the company out from crisis situation and work towards
optimum utilization of organizational resources. Such capacity of the
personnel can be determined by having complete details on following key
aspects:
Market reputation on the promoter / management of the company
Hands on experience of the management personnel in the industry / Business
Managed by qualified personnel.
Ability of the promoters / management to bail out the company in case of
crisis (for example, this could be derived from a strong group company)
Decision making Is it concentrated?
Organization structure / Succession planning / Labor relations
Is any group company in default / Any Directors on RBIs negative list /
Borrowers track-record in honoring financial commitment
Length of relationship with the bank
38
40
entity's ability to pay debts. There are various organization who perform credit rating
for various business organization.
Union Bank of India follows a finely defined Credit Rating Model for assessing the
creditworthiness of the applicant. The credit rating model asses various aspects of
the projects and assigns scores against them thereby determining the risk level
involved with the project.
It is divided in Five Sections:
1. Rating of the Borrower
Financial Risk
Management Risk
2. Market Condition/ Demand Situation
3. Rating of the Facility
4. Business Consideration
5. Cash Flow related parameters
41
true tonics for invigoration. If the weather does not encourage outdoor relaxation
(unusual in the 'Garden City' of Bangalore!) a workout in the luxury of the
Gymnasium, a game of snooker, a solitary tryst with computer games or online
learning facilities - are other options.
THE 'FACILITATORS'
Our 'facilitators' to learning - "Faculty" or "Trainers" in the common parlance- are
experienced bank officers with many years of exposure in the entire gamut of
banking. All the facilitators have been through an intensive orientation program on
adult learning processes drawn up by Vinstar of New Zealand. They are also
exposed periodically to updating of skills and awareness in leading institutions in the
country. Some have also been nurtured with professional training abroad at
premiere institutions like Columbia Business School, New York and the Manchester
Business School, England.
THE PROGRAMS
Currently the College is running training programs in the following disciplines:
1.International Banking
2.Credit
3.Information
Technology
4.General Banking
5.Marketing and
6. Management and human resource development.
43
44
45
46
Year
2006
National Award for the second best performance in financing small scale
units by Ministry
of Small Scale Industries, Government of India
Golden Jubilee Award for the best bank in north east zone for excellence
in the field of
2007
20072008
National Award for the best bank for excellence in field of Khadi and
village industries for
2008
east and north east zones from the Ministry of MSME, Government of
India
20082009
20082009
47
2009
48
i. Services we provide
ii. Minimum balance requirement for Savings Bank accounts and No Frills accounts
and charges for non-maintenance thereof
iii. Name of the official at the branch whom you may approach if you have a
grievance
iv. Name and address of the Zonal/ Regional Manager whom you can approach if
your grievance is not redressed at the branch
v. Name and contact details of the Banking Ombudsman under whose jurisdiction
the branch falls
vi. Information available in booklet form.
d. Displaying on our website our policies on
i. Cheque collection
ii. Grievance Redressal
iii. Compensation
iv. Collection of Dues and Security Repossession.
To Deal Quickly and Sympathetically With Things That Go
Wrong By:
a. Correcting mistakes promptly and cancelling any bank charges that we apply due
to our mistake
b. Handling your complaints promptly
c. Telling you how to take your complaint forward if you are still not satisfied (see
Para No. 7)
d. Providing suitable alternative avenues to alleviate problems arising out of
technological failures.
To Treat All Your Personal Information As Private And Confidential
We will treat all your personal information as private and confidential
Subject to matters.
To Publicise The Code We Will:
a. Provide you with a copy of the Code, on request, over the counter or by electronic
communication or mail
b. provide you ( new customer) with a copy of the Code when you open your account
c. make available this Code at every branch and on our website
d. ensure that our staff are trained to provide relevant information about the Code
and to put the Code into practice.
To Adopt and Practice A Non - Discrimination Policy
We will not discriminate on the basis of age, race, gender, marital status,
Religion or disability.
49
Bank has set a vision to emerge as number one Bank in terms of customer
experience. Towards this end, Bank will remain alert and sensitive to customer
complaints and uses it as a tool for removing deficiencies in service at all levels. The
policy also takes into account the increasing touch points where standard of
customer service gets impacted significantly. Hence all the delivery channels viz.,
ATMs, Phone Banking, Mobile Banking, Internet Banking will be given due
importance in redressing shortcomings based on customer feedbacks. Likewise,
channels like call center and online complaints will be given added focus both in
receiving as well as redressing customer grievances. The adoption of Banking
Codes and Standards Board of India places greater responsibility on the Bank to
meet higher standard of customer expectation. Bank will use customer education,
customer awareness and transparency as tools for reducing grievances and
enhancing customer satisfaction.
Grievance Redressal Policy will also enable compliance to Government / Reserve
Bank of India guidelines / regulations and adherence to code set by Banking Codes
and Standard Board of India. The provisions of this policy will be maintained in
compliance and fulfilment to these requirements to the grievance Redressal process.
The policy document aims at understanding root cause of complaints, based thereon
review of delivery standards will be carried out. Deterrent and disciplinary measures
will also be effectively enforced. Over all the review mechanism should help in
identifying shortcomings in products / processes and services related issues.
The banks policy on grievance redressal is governed by the following principles:
50
The customer will have the full right to register his complaint if he is not satisfied with
the services provided by the bank. He can give his complaint in writing, orally or over
telephone. The customer can also lodge a complaint through Banks own call centre.
If customers complaint is not resolved within given time or if he is not satisfied with
the solution provided by the bank, he will have the right to approach Banking
Ombudsman or such other grievances redressal forums for redressal of grievances.
2. Internal Machinery to handle Customer complaints/ grievances
Three tier grievance redressal system
The Bank will have public grievances machinery functioning at three levels i.e.
Branch, Regional and Central Office level. All complaints received at every level will
be immediately acknowledged and dealt appropriately.
The bank has also enabled an Online Grievance Redressal Mechanism whereby
grievances can be lodged online and will be attended as per the time schedule with
an inbuilt escalation process by which the complaint get escalated to higher offices
in case of non fulfilment within time. The facility has been provided to customer to
register the complaint online for speedy redressal.
Call Centre is yet another avenue to record complaints and deficiencies in service.
Calls to Call Centre will be processed through a well laid down fulfilment work flow
within a committed time and escalation provision.
Nodal Officer and other designated officials to handle complaints
and Grievances
Bank will appoint a Nodal Officer in the rank of General Manager who will be
responsible for implementation of customer service and complaint handling for the
entire bank. At field level Regional Heads will be designated to handle
complaints/grievances in respect of branches falling under their control.
Nodal Officer shall
Review and set right implementation of all products and processes from the
customer service perspective
Conduct customer service surveys to assess the level of services rendered at
the branch and initiate corrective steps wherever necessary
Decide upon matters requiring immediate action and follow up for timely
redressal of grievances of customers wherever delay is observed and take
steps / action to avoid such delays including action against staff wherever
shortcomings are noticed.
Facilitate customer interface as per laid down procedures and forums.
4. Resolution of Grievances
Branch Manager will be responsible for the resolution of complaints/ grievances in
respect of customers serviced by the branch. He will be responsible for ensuring
closure of all complaints received at the branches. It will be his foremost duty to see
that the complaint stands resolved completely to the customers satisfaction and if
the customer is not satisfied, then he will be provided with alternate avenues to
escalate the issue. If the Branch Manager feels that it is not possible at his level to
solve the problem he has to refer the case to Regional or Field General Managers
Office or Central Office for guidance and seek intervention. Similarly, if
Regional/Field General Managers Offices find that they are not able to solve the
problem such cases have to be referred to the Nodal Officer at Central Office.
Time frame
Complaints will be seen in the right perspective in ensuring that there is no room for
deficiency in services rendered. Hence complaint received will be analysed from all
possible angles. Specific time schedule will be set up for handling complaints and
disposing them at all levels including branches, Regional and Central Office. Branch
Manager will endeavour with all earnestness to resolve the complaint within
specified time frame laid down in the Banks code for redressal of grievances. If the
complaint is received in writing, bank will send an acknowledgement/ a response
within a week. If the complaint is lodged over phone at Banks Call Centre, a
complaint reference number will be provided to keep the complainant informed of the
progress within a reasonable period of time. After examining the matter, bank will
send to the customer final response or explain why we need more time to respond
within a period of six weeks of receipt of the complaint and will tell the customer how
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54
The Union Bank of India recruit the MBA professional in every year in their IFB but
the people are normally seen that they live their job after one or two year experience
it will affect the productivity of the IFB work. However the IFB is one of the finest job
providers to the MBAs but the people are take knowledge of the all finance activity
and joined another institution. Because of the low level of salary as compare to
another company like CRISIL etc.
The IFB must provide the proper incentives for their employees for their innovative
work. In the IFB there is lack of promotion for the new employees. Training are
provided by senior most employees but it not sufficient for the new joined employee
it dimities the work of new employee.
The Union Bank of India (IFB) is one of the finest finance providers to the
government project through the private and public partnership. Their work load is
more as compare to other banks. So Union Bank of India must recruit the people in
their crew of employee.
The chain of command is also affecting the decision of the IFB. So the command
system o the company must be change as per the quality of the employee and their
work.
We work in IFB on the POWER PROJECT the aspect of the power project finance
and work done on OPPORTUNITIES IN POWER SECTOR AND ITS CREDIT
VIABILITY in this we learn the how the finance institution are provide finance for
this sector. The Union Bank of India is providing the finance in three main sectors
like PORT, POWER, and ROAD projects. The decision on the investment on which
sector the power sector comes last this thinking of invest in power sector is negative.
The company must have changed their policy on this they have to check the growth
of every sector and take investing decision.
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The Union Bank of India must have changed their policy of remuneration.
They must have provided the proper incentives to employee as per their
performance appraisal.
Company must provide the task oriented work to their employees and give the
proper opportunity to the work innovative manner and quality work.
They must provide the training for at list 2 months for new employees and
give the real work experience.
Company must develop the recruitment procedure for the new employees
recruitment. Make examination of the finance aspect of the company the
examination question are ask on finance field which are mostly come in the
original work on IFB.
They have to cheek whether the employee are capable for the IFB work he
must have knowledge regarding project finance.
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17. Recommendations
As per the Union Bank of India IFB
OPPORTUNITIES TO BANKS to Invest on POWER SECTOR
The Indian Power Industry is one of the largest and most important industries
in India as it fulfills the energy requirements of various other industries. It is
one of the most critical components of infrastructure that affects economic
growth and the well-being of our nation.
India has the worlds 5th largest electricity generation capacity and it is the 6th
largest energy consumer accounting for 3.4% of global energy consumption.
Due to the fast-paced growth of the Indian economy, the countrys energy
demand has grown at an average of 3.6% p.a. over the past 30 years.
As per the latest Report of CEA (Central Electricity Authority) as on 31-032011, the Total Installed Capacity of Power in India is 173626.40 MW. Of this,
more than 75% of the installed capacity is with the public sector (state and
central), the state sector having the largest share of 48%.
The nations power sector which is already struggling with funding shortfalls
will need $400 billion of investment during the 12th plan period (2012-17).
Power generation capacity requires current estimation of Rs. 10.31 trillion of
investment, whereas power ministry estimates a Rs. 4.51 trillion funding
shortfall.
In India, major proportion of power is generated from thermal sources where
the main raw material used is coal. Around 83% of thermal power is
generated using coal as a raw material whereas 16% of thermal power is
generated with the help of Gas and 1% of thermal power is generated with the
help of Oil.
Hydroelectric power or hydroelectricity is electrical power which is generated
through the energy of falling water. India has hydro power generation potential
worth 1,50,000 MW, of which only 25 % has been harnessed till date.
Under the Governments Power for all by 2012 plan, it has targeted per
capita consumption of 1000 kWh by the end of the 11th Five Year Plan (20072012) as compared to levels of 734 kWh in 2008-09. In order to provide per
capita availability of over 1000 kWh of electricity by year 2012, it is estimated
that capacity addition of more than 1,00,000 MW would be required. This
shows that huge capacity additions are required at good efficiency rates,
indicating that the opportunities available in this sector are huge.
A future CARG of 15% is considered based on which loans and advances of
AIFIs(All India Financial Institutions) are projected to reach Rs.
19,307,132crore by F.Y.2012.
A modest growth of 15 % in the aggregate deposits would entail additional
funds of Rs.2,995,202 crore till F.Y. 2012.
As far as regulation is concerned, Electricity Act, 2003 is a very important Act
as it allowed private sector participation in the generation of power, thus
creating competition. It also allowed 100% FDI participation in the power
generation, transmission and distribution, thus inducing investments in the
power sector.
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The Government of India is planning nine Ultra Mega Power Projects (UMPP)
of 4 GW each with an estimated individual investment of US$ 4 billion (Rs.
192 billion). Four of these projects are expected to be commissioned between
2011 and 2017. The UMPP is an initiative by the government to collaborate
with power generation companies to set up 4,000 MW projects to ease the
countrys power deficit situation.
Nuclear power projects account for 2.75% of Indias total installed capacity
which is about 4.77 GW. The Planning Commissions expert committee on an
Integrated Energy Policy has suggested in its report that there is a possibility
of reaching a nuclear power capacity of 21-29 GW by 2020 and 48-63 GW by
2030.
The hydro power segment offers investment opportunities as India is
considered to have hydro power generation potential worth 1,50,000 MW; of
which only 25% has been harnessed till date
Power Sector is a highly capital-intensive industry with long gestation periods, before
the commencement of revenue generation. Since most of projects have a long time
frame (4-5 years of construction period and operating period of over 25 years). And
from the above future prospects of power industry shows a heavy investment
requirement and a untapped opportunities to banks and other financial institutes to
invest heavily in power sector.
The Ministry of Power, Government of India has launched an initiative for
development of coal-based Ultra-Mega Power Projects (UMPPs) in India, each with
a capacity of 4,000 MW or above. These projects will be awarded to developers on
the basis of tariff based competitive bidding. To facilitate tie-ups of inputs and
clearances, project-specific shell companies have been set up as wholly owned
subsidiaries of the Power Finance Corporation (PFC) Ltd. These companies will
undertake preliminary studies and obtain necessary clearances including water,
land, fuel, power selling tie-up etc. prior to award of the project to the successful
bidder.
Nine sites have been identified by CEA in nine States for the proposed UMPPs.
These include four pithead sites, one each in Chhattisgarh, Jharkhand, Madhya
Pradesh and Orissa, and five coastal sites, one each in Andhra Pradesh, Gujarat,
Karnataka, Maharashtra and Tamil Nadu. It is proposed to set up pithead projects as
integrated proposals with corresponding captive coal mines. On the request of
Ministry of Power, Ministry of Coal has already allocated captive coal mining block
for Sasan UMPP in Madhya Pradesh and earmarked captive coal mining block for
Orissa UMPP. For the coastal projects, imported coal shall be used. The projects are
to be developed with a view to lower the cost of power to the consumers. These
projects, adopting supercritical technology to reduce emissions, would be
environment-friendly.
A time bound action plan for preparation of project report, tie-up of various inputs /
clearances, appointment of consultants, preparation of RFQ/RFP have been
prepared.Lanco Infrastructure has bagged the Sasan Project at Rs. 1.19 per unit
whereas Tata Power has been awarded the Mundra project at Rs. 2.26 per unit. The
encouraging result achieved in these two cases has shown the way forward for
capacity addition with most competitive tariff.
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18. Learning
MAJOR FINDINGS:
Most of the SEBs though are supported by state government, are running
under loss. This is because of power theft, transmission losses, use of
conventional methods for power generation and transmission and out dated
management policies.
Indian power sector has been witnessing a wide demand supply gap.
Although electricity generation has increased substantially, it has not been
able to meet the demand.
India is going to build an additional capacity of 1 lakh MW by 2012 including
private sector contribution.
In a bid to bring structural transformations, necessary reform programs
should be carried out in distribution and transmission process.
India possesses a vast opportunity to grow in the field of power generation,
transmission, and distribution. The target of over 150,000 MW of hydel power
germination is yet to be achieved. By the year 2012, India requires an additional
100,000 MW of generation capacity. A huge capital investment is required to meet
this target. This has welcomed numerous power generation, transmission, and
distribution companies across the globe to establish their operations in the country
under the famous PPP (public-private partnership) programmes. The power sector is
still experiencing a large demand-supply gap. This has called for an effective
consideration of some of strategic initiatives. There are strong opportunities in
transmission network ventures - additional 60,000 circuit kilometers of transmission
network is expected by 2012 with a total investment opportunity of about US$ 200
billion.
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19.Bibliography
Annual report of the Union Bank of India 2009, 2010 & 2011
http://en.wikipedia.org/wiki/Banking_in_India
www.moneycontrol.com/.../Union%20Bank%20Company%20Report1.pdf
http://www.unionbankofindia.co.in/au_corporate_mission.aspx
http://spoonfeedin.blogspot.com/2008/09/mktg-union-bank-brand-refresh.html
http://www.unionbankofindia.co.in/shareholdinginformation1.aspx
http://www.crisil.com/Ratings/RatingList/RatingDocs/unionbank_18jun10.htm?cn=UNIBNKI
http://www.unionbankofindia.co.in/au_training_system.aspx
http://www.unionbankofindia.co.in/bcsbi.aspx
http://www.unionbankofindia.co.in/greivance_mach.aspx
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