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Banking regulation Act, 1949, defines banking as accepting for the purpose of lending or investment, of deposits of money from the public, repayable on demands or otherwise and with draw able on demand by cheques, draft or order otherwise.
Functions of Commercial Banks :
1. To change cash for bank deposits and bank deposits for cash. 2. To transfer bank deposits between individuals and or companies. 3. To exchange deposits for bills of exchange, govt. bonds, the secured and unsecured promises of trade and industrial units. 4. To underwrite capital issues. They are also allowed to invest 5% of their incremental deposit liabilities in shares and debentures in the primary and secondary markets. 5. The lending or advancing of money either upon securities or without securities. 6. The borrowing, raising or taking of money. 7. The collecting and transmitting of money and securities. 8. The buying and selling of foreign exchange including foreign bank notes.
Banking scene in India
The banking sector in India is passing through a period of structural change under the combined impact of financial sector reforms, internal competition, changes in regulations, new technology, global competitive pressure and fast evolving strategic objectives of banks and their existing and potential competitors. Until the last decade, banks were regarded largely as institutions rather akin to public utilities. The market for banking services were oligopolies and Centralized while the market place was regulated and banks were expected to receive assured spreads over their cost of funds. This phenomenon, which was caricatured as 36-3 banking in the united states, meaning that banks accepted deposits at 3%, lent at 6%, and went home at 3 p.m. to play golf, was the result of the sheltered markets and administrated prices for banking products. Existence of entry barriers for new banks meant that competition was restricted to existing players, who often operated as a cartel, even in areas where the freedom to price their products existed. The market place began to change for banks in India as a result of reforms of the financial sectors initiated in the current decade. On account of policy measures introduce to infuse greater competitive vitality in the system, the banking has entered in to a competitive phase. Competition has emerged not only from within the banking system but also from non-banking institutions. Lowering of entry barriers, deregulation of interest rates and growing sophistication of customers have made banking far less oligopolistic today. Introduction of capital adequacy and other prudential norms, freedom granted to enter into new turf’s and greater overlap of functions between banks and non-banks have forced banks to get out of their cozy little world and think of the future of the banking.
Emerging Environment of Banking in India
Removal of lowering of existing barriers of competitiveness. Small Scale Industry (SSI) and tiny units. more sophisticated and discerning. profitability.. capital market and forex market. these entrepreneurs complain of procedural delay in sanctions and renewal of limits. contribute significantly to the growth of our economy. The entrepreneur himself manages many of the units. cumbersome procedural aspects relating to reviews and renewals. plan for customized products. fiscal and exchanged rate policies for achieving the goals of faster and sustainable economic growth. A word about SBI card SBI Segment : Small business credit card (SBI credit card) Preamble : Small business units. The 21st century may see the dawn of “DARWINIAN BANKING”. submission of balance sheet. A combination of marketing skills and state-of-the-art technology should enable to bank in maximizing its profits through customer satisfaction. This is changing profile of customer’s call for a shift from product-based approach to customers-based approach. Banks customers are better informed. Only the banks could fulfill the demands of markets and changing items would survive and prosper.Full convertibility of rupee leading to free mobility of capital. artisan. Growing privatization and commercialization infrastructure sector. of necessity. As banks in India prepare themselves for the millenium these are the shifts in the paradigm they are likely to experience. They also find it difficult to cope with the demands for audited balance sheet and other statements sought by the bank from time to time for availing credit facilities. Purpose : To meet the credit requirements of small business units. Today. With a view to providing hassle free financial supports to the above categories of entrepreneurs who have shown commitment to run the unit successfully and who are dealing with the banks for last two years satisfactorily. to keep face with changing banking scenario. A bank aiming at maximizing customer value must. increased productivity. They also have a wide choice to choose from various banks and non-bank intermediaries. industrial unit. macro-economic stability and export promotion. reservation of certain utilities for the public sector. which will mean virtual collapse of the national borders for trade and capital flows. village industries. This is particularly true for banks corporate clientele but also applies to customers from personal segment. retail traders. Under the scheme. Their expectations are soaring. Greater coordination between monetary. retail trader. stock statements and other statements are done with credit delivery made simple and easy. Very often. professionals and self employed persons etc. In the next millennium banks will have to be more and more cautions about customer service. which are present today in the form of quantitative instructions on certain imports protective custom duties. new and friendly credit product namely small business credit card scheme is designed. Close integration of various financial markets such as money market. artisans. small-scale industrial units and tiny units. Eligibility : .
• For professionals and self employed persons.A. • Annual review will be done based on conduct/operations of the A/cs. If the credit summations is less than 50% of projected sales turnover. • In case of composite loans. Repayment : • The working capital advance may be continued subject to that review every year provided the credit summations in the account is not less than 50% of the projected sales turnover. • The term loan is repayable in suitable installments with in a maximum period of five years. 5 Lakh can be sanctioned to eligible persons. whichever is higher. Quantum of loan : Loan up to Rs. The outstanding as on the due date of review should be made repayable in suitable monthly installments. tiny sector units the assessment norms in vogue as per the Nayak Committee recommendations would continue. retail trader etc. Interest rate : As per extent instructions issued from time to time relating the market segment. 50% of their gross annual income as per IT return shall be considered as the limit for issuing the SBI credit card. where sales tax returns are not available. Validity : • Credit card limit will be valid for a period of three years. 20% of the annual turnover declared for tax purpose or last twelve months turnover in the operative accounts. In respect of parties with good track record. the credit limits may be decided taking into consideration the actual turnover in the accounts during the last two years. only the term loan is repayable in installments up to a maximum period of five years. Refinance : . subject to satisfactory conduct of the accounts. Assessment : The small business credit card limit can be fixed as follows : • For small business. Customers of the following segments with a satisfactory track record for the last two years enjoying credit facilities. Units who do not enjoy credit limit with us/other banks at present with excellent performance and credential may be considered. • Small industrial units (SSI and tiny units including artisans) • Small retail traders (Under SBF) • Professional and self employed persons • Small business enterprise B. • For small scale industrial units. A major portion of the sales turnover should have been routed through the accounts as revealed by the credit summations.
(Branch Code) Card holder’s Photograph with signature . Credit Card .NIL Rs. 25000/. submission of stock statement. No. balance sheet and other statements are done away with. sanctioning authority may waive collateral requirement. User SBF : • • Up to Rs. Over Rs. 25000/. machinery. Small business credit card • • • • • • • • Card No.25000/- . The credit limit will be worked as detail above. 5.. 25001/.charge over movable/immovable property or third party granted. Date of issue Valid upto …………. Cumbersome procedural aspects relating to reviews and renewals.No refinance is to be claim from SIDBI Security : Primary : Hypothecation of the stock in trade receivables.A Convenient Banking Product : The credit card is a hassle free convenient banking product aimed at simplifying the credit delivery mechanism. in case of the excellent track record. Collateral : Under SSI-No collateral security as per existing guidelines of RBI. Tel. office equipment.to Rs. However.00..20% Signature of the Brach Manager The borrower would be issued a photo card indicating sanctioned limit and validity of the limit (sample card) Insurance : • • Fixed assets/stock pledged/hypothecated to the bank be fully insured at least to the extent of the bank interests.000/Documentation : Documents as per extant instructions. 25000/. Margins : Up to Rs. Limit Rs. Bank may waive insurance of assets for equipment against the fire and other risk up to Rs.No collateral security. Name Account No.
Units within a radius of 5 kilometers may be covered intensively for the issue of credit card. Patna & Hydrabad). Pass book should be issued for mall business credit card holders. Control return after sanction may be sent to next higher authority for approval . Marked inquiries should be made and recorded in the opinion report and singed by the field officer/cash officer or officers not below that rank. Loan would be sanctioned up to Rs. IRAC norms would be applicable. Chandigarh.based on the simplified scoring model as given in annexure.II. Cost of photograph to be borne by banks. Inspections : • • • • Sanction : Scoring Model : Rationale : • Automatic Teller Machine (ATM) An ATM (Automatic Teller Machine) card is useful to a card holder as it helps him to withdraw cash from banks even when they are closed. New Delhi. Magnetic Stripe Features of State Bank Cash Plus Card . This can be done by inserting the card in the ATM installed at various banks locations. This condition may be waived for such of those units already in the book of the branch. 5.00. State Bank Cash Plus CARD • • Signature Panel. Half-yearly inspection/monitoring to ensure the end user funds. Lucknow.000/. Required loan may be sanctioned with in a week after receipt of detailed information. Borrower would be issued a small business credit card with photograph thereon. Brief opinion report should be recorded. Submission of audited balance sheet waived. New schemes for hassle free credit facilities to small borrower.Cover under credit guarantee scheme : All eligible loan accounts sanctioned for small scale industries (other than services) would qualify for cover under CGTFSI scheme (presently the scheme has been introduce in five circles on pilot basis viz. Cheque book should be issued and marked as small business credit card account. Operation : • • • • • • • • • Small business credit card accounts should be maintained in a separate ledger. Stock statement waived. Those who are scoring less than 60% would not qualify for the loan.
cash credit or working capital loans and terms loans. We uses it for making the payments for purchase made at the merchant establishments. A SBI card is nothing but a identity card containing card holder’s photographs with signature. Signature panel on which you must sign as soon as you’re your card. Review of Existing Literature : It is very essential to know whether the study has already been conducted before. Due to the privatization of banking sector many big private players entered in this sector giving a tough competition to the existing players. to face this stiff competition all the public sector banks have to review their functioning. Conceptualization As the concept includes two terms i. very limited studies have been conducted on the subject. the date after which your card needs to be renewed is the last day of the month indicated on your card.e. ATM card possess pincode which having the 4 digit. Therefore both the terms are taken into consideration in the proposed study. how and to what extent ? And because of this scholar has to go through all the existing literature related to the study. What is its shape and size. We uses our State Bank Cash Plus Card for cash withdrawal from ATMs.• • • • • • • • State Bank Cash Plus Card having the 19 digit. Name of the card holders mention there on it. branch code with signature of Branch Manager. The magnetic stripe. limit. there is no expiry period but for the old card. SBI card provides customers with an option. These aspects will be given importance in this project report. what is its function. which is available with the bank. Name. question crops in mind what is a SBI card. In case of State Bank Cash Plus Card. validity period. It identifies the card as your State Bank Card Plus Card. If so. Due to the time restrictions scholar could seek advice from only the limited literature. So the information is directly taken from these sources. It would also reveal the problems that are being faced by the bank employees while dealing with customers and would also highlight the future prospect of SBI card. This study would help us to know about the problems that are faced by the consumers during transactions. in addition to the existing banking credit facilities available. So. Use of State Bank Cash Plus Card Significance of the Study This study entitled “comparative study of various credit schemes of SBI V/s other banks” will be helpful for bankers to maintain customers service policy. which contains encoded information. SBI Card. As the concept is completely under the control of various banks and RBI. The concept of SBI card. With an SBI card customers can enjoy hassle-free credit facilities. for customers while deciding their financing needs and also helpful for other researchers for further research in the future. A/c No. . card no.