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In partial fulfillment of the requirement for two year full time Masters Programme in MBA-AB.

Under the guidance of P.K. Srivastava Branch Manager Kuar Bazar Branch Bank of India, Varanasi

Submitted by KESHAV KUMAR MBA AB - III Sem. 201112 Enrollment no.:325866 Examination Roll no.10381RG015

I convey my sincere gratitude to Prof.S.K.SINGH (Head & Dean), Faculty of management studies, B.H.U for providing me an opportunity to undergo this summer internship project. I would like to express my sincere thanks to Mr. K.N. LALIT (Dy. Zonal Manager), Mr. S.K BHATT, (H.R Manager) Bank of India, Varanasi for giving me a chance to do my summer internship project in BANK OF INDIA. It was their sincere permission that enlightened me to perform with such a challenging project. I am highly obliged to SHRI S.P.SRIVASTAVA (Manager) Bank Of India, Kuar Bazar branch and B.K. TIWARI (Deputy Manager) Bank of India Kuar Bazar branch, Varanasi for providing me their valuable guidelines, support and for providing me an opportunity to undertake this project. This project was a great opportunity for me to get a firsthand experience of professional culture that exists in an organization. I would also like to thank all the members of Bank of India, Kuar Bazar branch branch, Varanasi for their support and generous cooperation. I cant forget expressing my thanks to all the respondents, because without their help my project would have been incomplete. The organizational culture of BANK OF INDIA changes a person on philosophical, psychological and analytical levels. Family and friends have always been a source of incessant motivation during my project work; hence they are beyond the words of thanks!



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By the 1900s, the market expanded with the establishment of banks such as Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai - both of which were founded under private ownership. The Reserve Bank of India formally took on the responsibility of regulating the Indian banking sector from 1935. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers. Most of the financial institutions are involved in rural development as well as agriculture development. But there was a limited area such as finance for housing, tractor and farm inputs. But other area like land development and education play important role in rural development, so what is the present status of BOI to develop it and what it should be. The main aim is to discuss the practical experience of agricultural credit and loans given to the unemployed youth of villages in kuar bazar region of Varanasi district with focus on problem faced by the agriculture sector during the transaction to a market economy. There is increasing interest in transaction economies in these credit and funds have been used in a number of countries to offset risk from lending to the agriculture schemes, which are subsidized.

The main issues discussed on causes why unemployed youth hesitate to start rural business and the problems faced by them when applying for loans. Bank and financing institution are interested in assessing whether credit and funds is really functional and useful tool to help and resolve problems caused by underdevelopment of rural financial system.


MAY & JUNE 2011

About the Banking Industry

Structure of the organised banking sector in India.Number of banks are in brackets. Banking in India originated in the first decade of 18th century with The General Bank of India coming into existence in 1786. This was followed by Bank of Hindustan. Both these banks are now defunct. The oldest bank in existence in India is the State Bank of India being established as "The Bank of Bengal" in Calcutta in June 1806. A couple of decades later, foreign banks like Credit Lyonnais started their Calcutta operations in the 1850s. At that point of time, Calcutta was the most active trading port, mainly due to the trade of the British Empire, and due to which banking activity took roots there and prospered. The first fully Indian owned bank was the Allahabad Bank, which was established in 1865.By the 1900s, the market expanded with the establishment of banks such as Punjab National Bank, in 1895 in Lahore and Bank of Baroda, in 1908 in Baroda - both of which were founded under private ownership. TheReserve Bank of India formally took on the responsibility of regulating the Indian banking sector from 1935. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers.

Early history
At the end of late-18th century, there were hardly any bank in India in the modern sense of the term. At the time of the American Civil War, a void was created as the supply of cotton to Lancashire stopped from the Americas. Some banks were opened at that time which functioned as entities to finance industry, including speculative trades in cotton. With large exposure to speculative ventures, most of the banks opened in India during that period could not survive and 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.

The Bank of Bengal, which later became the State Bank of India. At the beginning of the 20th century, Indian economy was passing through a relative period of stability. Around five decades have elapsed since the India's First war of Independence, and the social, industrial and other infrastructure have developed. At that time there were very small banks operated by Indians, and most of them were owned and operated by particular communities. The banking in India was controlled and dominated by the presidency banks, namely, the Bank of Bombay, the Bank of Bengal, and the Bank of Madras - which later on merged to form the Imperial Bank of India, and Imperial Bank of India, upon India's independence, was renamed the State Bank of India. There were also some exchange banks, as also a number of Indian joint stock banks. All these banks operated in different segments of the economy. The presidency banks were like the central banks and discharged most of the functions of central banks. They were established under charters from the British East India Company. The exchange banks, mostly owned by the Europeans, concentrated on financing of foreign trade. Indian joint stock banks were generally under capitalized and lacked the experience and maturity to compete with the presidency banks, and the exchange banks. There was potential for many new banks as the economy was growing. Lord Curzon had observed then in the context of Indian banking: "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." Under these circumstances, many Indians came forward to set up banks, and many banks were set up at that time, a number of which have survived to the present such asBank of Baroda and Corporation Bank, Indian Bank, Bank of India, and Canara Bank.

The partition of India in 1947 had adversely impacted the economies of Punjab and West Bengal, and banking activities had remained paralyzed for months. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy.

This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included:

In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it became an institution owned by the Government of India. In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India." The Banking Regulation Act also provided that no new bank or branch of an existing bank may be opened without a license from the RBI, and no two banks could have common directors.

However, despite these provisions, control and regulations, banks in India except the State Bank of India, continued to be owned and operated by private persons. This changed with the nationalization of major banks in India on 19th July, 1969.

By the 1960s, the Indian banking industry has become an important tool to facilitate the development of the Indian economy. At the same time, it has emerged as a large employer, and a debate has ensued about the possibility to nationalize the banking industry. Indira Gandhi, the-then Prime Minister of India expressed the intention of the GOI in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalization." The paper was received with positive enthusiasm. Thereafter, her move was swift and sudden, and the GOI issued an ordinance and nationalized the 14 largest commercial banks with effect from the midnight of July 19, 1969. 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 (Acquition and Transfer of Undertaking) Bill, and it received the presidential approval on 9th 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 GOI controlled around 91% of the banking business of India.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.

In the early 1990s the then NarasimhaRao government embarked on a policy of liberalization and gave licenses to a small number of private banks, which came to be known as New Generation tech-savvy banks, which included banks such as UTI Bank(now re-named as Axis Bank) (the first of such new generation banks to be set up), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India,kickstarted 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 setup with the proposed relaxation in the norms for Foreign Direct Investment, where 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 49% with some restrictions. The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 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 not just demanded more from their banks but also received more. Current situation Currently (2008), banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. One may also expect M &As, takeovers, and asset sales. In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them. Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that is with the Government of India holding a stake), 29 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively.


The nationalization of banks in India took place in 1969 by Mrs. Indira Gandhi the then prime minister. It nationalized 14 banks then. These banks were mostly owned by businessmen and even managed by them.

Central Bank of India Bank of Maharashtra Dena Bank Punjab National Bank Syndicate Bank

Canara Bank Indian Bank Indian Overseas Bank Bank of Baroda Union Bank Allahabad Bank United Bank of India UCO Bank Bank of India

Before the steps of nationalization of Indian banks, only State Bank of India (SBI) was nationalized. It took place in July 1955 under the SBI Act of 1955. Nationalization of Seven State Banks of India (formed subsidiary) took place on 19th July, 1960. The State bank of India is India's largest commercial bank and is ranked one of the top five banks worldwide. It serves 90 million customers through a network of 9,000 branches and it offers -- either directly or through subsidiaries -- a wide range of banking services. The second phase of nationalization of Indian banks took place in the year 1980. Seven more banks were nationalized with deposits over 200 crores. Till this year, approximately 80% of the banking segments in India were under Government ownership. After the nationalization of banks in India, the branches of the public sector banks rose to approximately 800% in deposits and advances took a huge jump by 11,000%.

1955: Nationalization of State Bank of India. 1959: Nationalization of SBI subsidiaries. 1969: Nationalization of 14 major banks. 1980: Nationalization of seven banks with deposits over 200 crores.

Scheduled Commercial Banks in India

The commercial banking structure in India consists of:

Scheduled Commercial Banks in India Unscheduled Banks in India

Scheduled Banks in India constitute those banks which have been included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934. RBI in turn includes only those banks in

this schedule which satisfy the criteria laid down vide section 42 (6) (a) of the Act. As on 30th June, 1999, there were 300 scheduled banks in India having a total network of 64,918 branches. The scheduled commercial banks in India comprise of State bank of India and its associates (8), nationalized banks (19), foreign banks (45), private sector banks (32), cooperative banks and regional rural banks. "Scheduled banks in India" means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934), but does not include a co-operative bank". "Non-scheduled bank in India" means a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled bank". The following are the Scheduled Banks in India (Public Sector):

State Bank of India State Bank of Bikaner and Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Saurashtra State Bank of Travancore Andhra Bank Allahabad Bank Bank of Baroda Bank of India Bank of Maharashtra Canara Bank Central Bank of India Corporation Bank Dena Bank Indian Overseas Bank Indian Bank Oriental Bank of Commerce Punjab National Bank Punjab and Sind Bank Syndicate Bank Union Bank of India United Bank of India UCO Bank Vijaya Bank


The following are the Scheduled Banks in India (Private Sector):

ING Vysya Bank Ltd Axis Bank Ltd Indusind Bank Ltd ICICI Bank Ltd South Indian Bank HDFC Bank Ltd Centurion Bank Ltd Bank of Punjab Ltd IDBI Bank Ltd

The following are the Scheduled Foreign Banks in India:

American Express Bank Ltd. ANZ Gridlays Bank Plc. Bank of America NT & SA Bank of Tokyo Ltd. BanqucNationale de Paris Barclays Bank Plc Citi Bank N.C. Deutsche Bank A.G. Hongkong and Shanghai Banking Corporation Standard Chartered Bank. The Chase Manhattan Bank Ltd. Dresdner Bank AG.

Banks in India
In India the banks are being segregated in different groups. Each group has their own benefits and limitations in operating in India. Each has their own dedicated target market. Few of them only work in rural sector while others in both rural as well as urban. Many even are only catering in cities. Some are of Indian origin and some are foreign players. All these details and many more is discussed over here. The banks and its relation with the customers, their mode of operation, the names of banks under different groups and other such useful informations are talked about. One more section has been taken note of is the upcoming foreign banks in India. The RBI has shown certain interest to involve more of foreign banks than the existing one recently. This step has paved a way for few more foreign banks to start business in India. Major Banks in India


ABN-AMRO Bank Abu Dhabi Commercial Bank American Express Bank Andhra Bank Allahabad Bank Axis Bank (Earlier UTI Bank) Bank of Baroda Bank of India Bank of Maharastra Bank of Punjab Bank of Rajasthan Bank of Ceylon BNP Paribas Bank Canara Bank Catholic Syrian Bank Central Bank of India Centurion Bank China Trust Commercial Bank Citi Bank City Union Bank Corporation Bank Dena Bank Deutsche Bank Development Credit Bank Dhanalakshmi Bank Federal Bank HDFC Bank HSBC ICICI Bank IDBI Bank

Indian Bank Indian Overseas Bank IndusInd Bank ING Vysya Bank Jammu & Kashmir Bank JPMorgan Chase Bank Karnataka Bank KarurVysya Bank Laxmi Vilas Bank Oriental Bank of Commerce Punjab National Bank Punjab & Sind Bank Scotia Bank South Indian Bank Standard Chartered Bank State Bank of India (SBI) State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Saurastra State Bank of Travancore Syndicate Bank Taib Bank UCO Bank Union Bank of India United Bank of India United Western Bank Vijaya Bank

Public Sector Banks in India

Among the Public Sector Banks in India, United Bank of India is one of the 14 major banks which were nationalised on July 19, 1969. Its predecessor, in the Public Sector Banks, the United Bank of India Ltd., was formed in 1950 with the amalgamation of four banks viz. Comilla Banking Corporation Ltd. (1914), Bengal Central Bank Ltd. (1918), Comilla Union Bank Ltd. (1922) and Hooghly Bank Ltd. (1932). Oriental Bank of Commerce (OBC), a Governmet of India Undertaking offers Domestic, NRI

and Commercial banking services. OBC is implementing a GRAMEEN PROJECT in Dehradun District (UP) and Hanumangarh District (Raiasthan) disbursing small loans. This Public Secotor Bank India has implemented 14 point action plan for strengthening of credit delivery to women and has designated 5 branches as specialized branches for women entrepreneurs. The following are the list of Public Sector Banks in India

Allahabad Bank Andhra Bank Bank of Baroda Bank of India Bank of Maharastra Canara Bank Central Bank of India Corporation Bank Dena Bank Indian Bank Indian Overseas Bank Oriental Bank of Commerce Punjab & Sind Bank Punjab National Bank Syndicate Bank UCO Bank Union Bank of India United Bank of India Vijaya Bank

List of State Bank of India and its subsidiary, a Public Sector Banks

State Bank of India State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Saurastra State Bank of Travancore

Private Sector Banks

Private banking in India was practiced since the begining of banking system in India. The first private bank in India to be set up in Private Sector Banks in India was IndusInd Bank. It is one of the fastest growing Bank Private Sector Banks in India. IDBI ranks the tength largest development bank in the world as Private Banks in India and has promoted a world class institutions in India.


The first Private Bank in India to receive an in principle approval from the Reserve Bank of India was Housing Development Finance Corporation Limited, to set up a bank in the private sector banks in India as part of the RBI's liberalisation of the Indian Banking Industry. It was incorporated in August 1994 as HDFC Bank Limited with registered office in Mumbai and commenced operations as Scheduled Commercial Bank in January 1995. ING Vysya, yet another Private Bank of India was incorporated in the year 1930. Bangalore has a pride of place for having the first branch inception in the year 1934. With successive years of patronage and constantly setting new standards in banking, ING Vysya Bank has many credits to its account. List of Private Banks in India

Bank of Punjab Bank of Rajasthan Catholic Syrian Bank Centurion Bank City Union Bank Dhanalakshmi Bank Development Credit Bank Federal Bank HDFC Bank ICICI Bank IDBI Bank IndusInd Bank ING Vysya Bank Jammu & Kashmir Bank Karnataka Bank KarurVysya Bank Laxmi Vilas Bank South Indian Bank United Western Bank UTI Bank

Cooperative Banks in India

The Co operative banks in India started functioning almost 100 years ago. The Cooperative bank is an important constituent of the Indian Financial System, judging by the role assigned to co operative, the expectations the co operative is supposed to fulfil, their number, and the number of offices the cooperative bank operate. Though the co operative movement originated in the West, but the importance of such banks have assumed in India is rarely paralleled anywhere else in the world. The cooperative banks in India plays an important role even today in rural financing. The businessess of cooperative bank in the urban areas also has increased phenomenally in recent years due to the sharp increase in the number of primary co-operative banks.

Co operative Banks in India are registered under the Co-operative Societies Act. The cooperative bank is also regulated by the RBI. They are governed by the Banking Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965. Cooperative banks in India finance rural areas under:

Farming Cattle Milk Hatchery Personal finance

Cooperative banks in India finance urban areas under:

Self-employment Industries Small scale units Home finance Consumer finance Personal finance

Some facts about Cooperative banks in India

Some cooperative banks in India are more forward than many of the state and private sector banks. According to NAFCUB the total deposits &lendings of Cooperative Banks in India is much more than Old Private Sector Banks & also the New Private Sector Banks. This exponential growth of Co operative Banks in India is attributed mainly to their much better local reach, personal interaction with customers, their ability to catch the nerve of the local clientele.

Regional Rural Banks in India

Rural banking in India started since the establishment of banking sector in India. Rural Banks in those days mainly focused upon the agro sector. Regional rural banks in India penetrated every corner of the country and extended a helping hand in the growth process of the country. SBI has 30 Regional Rural Banks in India known as RRBs. The rural banks of SBI is spread in 13 states extending from Kashmir to Karnataka and Himachal Pradesh to North East. The total number of SBIs Regional Rural Banks in India branches is 2349 (16%). Till date in rural banking in India, there are 14,475 rural banks in the country of which 2126 (91%) are located in remote rural areas. Haryana State Cooperative




The Haryana State Cooperative Apex Bank Ltd. commonly called as HARCOBANK plays a vital role in rural banking in the economy of Haryana State and has been providing aids and financing farmers, rural artisans, agricultural labourers, entrepreneurs, etc. in the state and giving service to its depositors.

National bank for Agriculture and Rural Development (NABARD) is a development bank in the sector of Regional Rural Banks in India. It provides and regulates credit and gives service for the promotion and development of rural sectors mainly agriculture, small scale industries, cottage and village industries, handicrafts. It also finance rural crafts and other allied rural economic activities to promote integrated rural development. It helps in securing rural prosperity and its connected matters. Sindhanur Urban Souharda Co-operative Bank

Sindhanur Urban Souharda Co-operative Bank, popularly known as SUCO BANK is the first of its kind in rural banks of India . The impressive story of its inception is interesting and inspiring for all the youth of this country. United Bank of India

United Bank of India (UBI) also plays an important role in regional rural banks. It has expanded its branch network in a big way to actively participate in the developmental of the rural and semi-urban areas in conformity with the objectives of nationalisation.

Foreign Banks In India

Foreign Banks in India always brought an explanation about the prompt services to customers. After the set up foreign banks in India, the banking sector in India also become competitive and accurative. New rules announced by the Reserve Bank of India for the foreign banks in India in this budget have put up great hopes among foreign banks which allows them to grow unfettered. Now foreign banks in India are permitted to set up local subsidiaries. The policy conveys that foreign banks in India may not acquire Indian ones (except for weak banks identified by the RBI, on its terms) and their Indian subsidiaries will not be able to open branches freely. Please see the list of Foreign banks in India till date. List of Foreign Banks in India

ABN-AMRO Bank Abu Dhabi Commercial Bank Bank of Ceylon BNP Paribas Bank Citi Bank China Trust Commercial Bank Deutsche Bank HSBC

JPMorgan Chase Bank Standard Chartered Bank Scotia Bank Taib Bank.

Upcoming Foreign Banks in India By 2009 few more names is going to be added in the list of foreign banks in India. This is as an aftermath of the sudden interest shown by Reserve Bank of India paving roadmap for foreign banks in India greater freedom in India. Among them is the world's best private bank by EuroMoney magazine, Switzerland's UBS.

The following are the list of foreign banks going to set up business in India

Royal Bank of Scotland Switzerland's UBS US-based GE Capital Credit Suisse Group Industrial and Commercial Bank of China

Merrill Lynch is having a joint venture in Indian investment banking space -- DSP Merrill Lynch. Goldman Sachs holds stakes in Kotak Mahindra arms. GE Capital is also having a wide presence in consumer finance through GE Capital India. India's GDP is seen growing at a robust pace of around 7% over the next few years, throwing up opportunities for the banking sector to profit from. The credit of banks has risen by over 25% in 2004-05 and the growth momentum is expected to continue over the next four to five years.



Bank of India was founded on 7th September, 1906 by a group of eminent businessmen from Mumbai. The Bank was under private ownership and control till July 1969 when it was nationalized along with 13 other banks. Beginning with one office in Mumbai, with a paid-up capital of Rs.50 lakh and 50 employees, the Bank has made a rapid growth over the years and blossomed into a mighty institution with a strong national presence and sizable international operations. In business volume, the Bank occupies a premier position among the nationalized banks.

The Bank has 3415 branches in India spread over all states/ union territories including 155 specialized branches. These branches are controlled through 48 Zonal Offices . There are 27 branches/ offices (including three representative offices) abroad. The Bank came out with its maiden public issue in 1997 and follow on Qualified Institutions Placement in February 2008. While firmly adhering to a policy of prudence and caution, the Bank has been in the forefront of introducing various innovative services and systems. Business has been conducted with the successful blend of traditional values and ethics and the most modern infrastructure. The Bank has been the first among the nationalized banks to establish a fully computerized branch and ATM facility at the Mahalaxmi Branch at Mumbai way back in 1989. The Bank is also a Founder Member of SWIFT(Society for Worldwide Inter Bank Financial Telecommunication) in India. It pioneered the introduction of the Health Code System in 1982, for evaluating/ rating its credit portfolio. The Bank's association with the capital market goes back to 1921 when it entered into an agreement with the Bombay Stock Exchange (BSE) to manage the BSE Clearing House. It is an association that has blossomed into a joint venture with BSE, called the BOI Shareholding Ltd. to extend depository services to the stock broking community.


Bank of India was the first Indian Bank to open a branch outside the country, at London, in 1946, and also the first to open a branch in Europe, Paris in 1974. The Bank has sizable presence abroad, with a network of 34 branches (including three representative offices) at key banking and financial centres viz. London, Newyork, Paris, Tokyo, Hong-Kong, and Singapore. The international business accounts for around 17.82% of Bank's total business. ORGANIZATION NAME OF THE BANK

- BANK OF INDIA - SEPT. 07, 1906 - MUMBAI - 48 - 3415 - 91 - 3101 - 1100





The first board of directors of the bank consisted of Sir Sassoon David, Sir Cowasjee Gordhandas Khattau, Lalubhai Samaldas, Khetsety Khiasey, Ramnarain Hurnundrai, Jenarrayen Hindoomull Dani, Noordin Ebrahim Noordin. Jehangir, J. Cowasjee Jehangir, Sir Frederick Leigh Croft, Ratanjee Dadabhoy Tata, 1906: BoI founded with Head Office in Bombay. 1921: BoI entered into an agreement with the Bombay Stock Exchange to manage its clearing house. 1946: BoI opened a branch in London, the first Indian bank to do so. This was also the first post-WWII overseas branch of any Indian bank. 1950: BoI opened branches in Tokyo and Osaka. 1951: BoI opened a branch in Singapore. 1953: BoI opened a branch in Kenya and another in Uganda. 1953 or 54: BoI opened a branch in Aden. 1955: BoI opened a branch in Tanganyika. 1960: BoI opened a branch in Hong Kong. 1962: BoI opened a branch in Nigeria.

1967: The Government of Tanzania nationalized BoI's operations in Tanzania and folded them into the government-owned National Commercial Bank, together with those of Bank of Baroda and several other foreign banks. 1969: The Government of India nationalized the 14 top banks, including Bank of India. In the same year, the People's Democratic Republic of Yemen nationalized BoI's branch in Aden, and the Nigerian and Ugandan governments forced BoI to incorporate its branches in those countries. 1970: National Bank of Southern Yemen incorporated BoI's branch in Yemen, together with those of all the other banks in the country; this is now National Bank of Yemen. BoI was the only Indian bank in the country. 1972: BoI sold its Uganda operation to Bank of Baroda. 1973: BoI opened a rep in Jakarta. 1974: BoI opened a branch in Paris. This was the first branch of an Indian bank in Europe. 1976: The Nigerian government acquired 60% of the shares in Bank of India (Nigeria). 1978: BoI opened a branch in New York. 1970s: BoI opened an agency in San Francisco. 1980: Bank of India (Nigeria) Ltd, changed its name to Allied Bank of Nigeria. 1986: BoI acquired Paravur Central Bank (Karur Central Bank or Parur Central Bank) in Kerala in a rescue. 1987: BoI took over the three UK branches of Central Bank of India (CBI). CBI had been caught up in the Sethia fraud and default and the Reserve Bank of India required it to transfer its branches. 2003: BoI opened a representative office in Shenzhen. 2005: BoI opened a representative office in Vietnam. 2006: BoI plans to upgrade the Shenzen and Vietnam representative offices to branches, and to open representative offices in Beijing, Doha, and Johannesburg. In addition, BoI plans to establish a branch in Antwerp and a subsidiary in Dar-es-Salaam, marking its return to Tanzania after 37 years. 2007: BoI acquired 76 percent of Indonesia-based PT Bank Swadesi. 2009: BoI opened its branch again in Tanzania mainland (Former Tanganyika territory).






CROP FINANCE:INTRODUCTION:Crop production is the most important agricultural activity. All minor or major economic activities in rural areas are directly or indirectly related to this activity.

FACTORS AFFECTING CROP PRODUCTION:a) The factors affecting crop production can be grouped into two categories: i) Natural factors ii) Economic and social factors b) Soil, water and climatic conditions constitute natural factors while availability of capital to meet input requirements like seeds, fertilizers, plant protection materials, etc. and needs of the community are economic and social factors.


a) There are three distinct crop seasons in our country i) Kharif : (June / July to September / October).Crops sown / planted during South-West monsoon are called Kharif crops.


ii) Rabi : (October / November to January / February).Crops sown / planted during North- East monsoon are known as Rabi crops . iii) Zaid or Summer : (February / March to May / June) Crops grown / raised between Rabi and Kharif are called Zaid or Summer crops. b) The sowing / planting time, however, varies from region to region depending on the availability of source of irrigation rain, canal, well, etc. c) Certain crops mature within one season, i.e., 3 to 4 months, some take two to three seasons whereas certain crops take a number of years to yield on commercial basis. d) Most of the food grains, pulses, oilseeds, vegetables, fodder crops, flower plants, etc. are of one season duration crops. e) Cotton, arhar, tobacco, jute, etc. take two seasons. f) Sugarcane is a three season crop maturing in 12 months, although in certain areas it is grown up to 15 to 16 months for better yield. First and second ratoons of sugarcane are also common. g) Fruit crops, plantations, certain spices, medicinal plants, etc. take a number of years before they start yielding produce of commercial value.









Agriculture credit: Agriculture credit is the form of short term credit for financing crop production programs and in the form of medium-term/long term credit including purpose of land, minor irrigation, farm mechanization, dairy development, poultry, animal husbandry, fisheries, plantation and horticulture. Loans are also available for storage, processing and marketing of agriculture produce. Up to November 2009, the flow of credit to agriculture from the scheduled banking sector was 1, 37,760 crore, about 61% of the annual target. Total agriculture credit of BOI is 10800 crore in financial year 2008-09.

KISAN CREDIT CARD KCC is the way of providing agriculture credit to the farmers. Its came in existence in 1998-99. Objective


The scheme aims at providing adequate and timely credit for the comprehensive credit requirements of farmers for taking up agriculture and allied activities under single window, with flexible and simplified procedure, adopting whole farm approach, including the short-term credit needs and a reasonable component for consumption needs, through Kisan Credit Card including repayment of farmer's dues to noninstitutional lenders. Area of operation Through all rural and semi urban branches. Eligibility Short term crop loans to farmers those who are owner cultivators. KCC can also be issued for meeting the short term production need/working capital needs in respect of the allied activities like poultry, dairy, floriculture, horticulture etc. KCC schemes also cover the term credits for agriculture and allied activities. KCC is issued to individual borrower only on merit and not to corporate body society, association, club, group etc. Illiterate and blind persons intending to avail of this facility may be allowed after taking proper safeguard against misuse and tampering. Purpose It is intended that both term as well as short term/working capital credit facilities will be provided through single Kisan Credit Card. The passbook provided to KCC holders are to be divided into three separate portions for maintaining the records of : short term credit / crop loans, working capital credit for activities allied to agriculture and term credit (repayable beyond 12 months) However, it is to be ensured that transaction records of different loan facilities are kept distinct.


SMALL AND MEDIUM ENTERPRISES INTRODUCTION:Small & Medium Enterprises sector constitute the growth engine of the economy with contribution to GDP estimated at 40%, contribution to exports estimated at 50% and employment opportunities to nearly 4 crore persons. The SMEs lead to entrepreneurial development and diversification of the industrial sector, and also provide depth to industrial base of the economy. More employment opportunities are generated and the capital cost per employee is low. With the Services sector dominating the SME, and MNCs outsourcing their various requirements to Indian service providers, the scope for SME to this finance sector has through increased infrastructure even development, further. skill set There is also a more favorable environment now with the Govt. committed to give fillip development/entrepreneurship development, technology up gradation etc.,. SMEs have been quite enthusiastic after the dismantling of the textiles quota. Other sectors like IT and IT-enabled services, bio-tech, footwear etc,. have also shown promising potential. With the deregulation of the financial sector, the general ability of the banks to service the credit requirements of the SME sector depends on the underlying transaction costs, efficient recovery processes and available security. There is an immediate need for the banks generally to focus on credit and finance requirements of SMEs. Although the banks are allowed to fix their own targets for funding SMEs in order to achieve a minimum 20% year-on-year growth, the Governments objective is to double the flow of credit to the SME 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. Also, Credit risk in the SME sector is widely dispersed and Banks get better yield from SME advances as against the traditional advances where the spread is getting gradually reduced. The SME clientele base could also be utilized by the Branches to step-up cross selling of various other products including technology-enabled products. The MSMED Act 2006, which came into effect from 02/10/2006, aims to remove the several bottlenecks faced by the SME sector, particularly the tiny segment of the small enterprises, such as:

competition from both domestic and multi-national companies: inadequate access to finance due to lack of financial information and non27

formal business practices;

lack of access to private equity and venture capital; lack of access to inter-state and international markets; limited access to secondary market instruments; fragmented markets in respect of their inputs as well as products; vulnerability to market fluctuations; limited access to technology and product innovations; lack of awareness of global best practices; Considerable delays in the settlement of dues/payment of bills by the large scale buyers;

The role of Banks, in general, has become very important in the above context and, Bank of India formulated its SME Policy in October 2005, which was duly approved by the Banks Board of Directors on 28/10/2005, encompassing the various schemes and norms within the overall ambit of the Govt. /RBI directives. The SME sectors demands were comprehensively taken care of by the Bank through several initiatives such as:

Single Window dispensation, Quick decision with least Turnaround Time through specially constituted SME Cells, and above all, Better service.

Cluster-based Schemes are also on the list of the Banks initiatives.








Provision of timely and adequate credit to the SMEs, Encouraging Technology Up gradation, for better quality and competitiveness of their product(s), and Proactively detecting sick and viable units in time so as to nurse them back to health through appropriate re-structuring. Financing of Clusters with adequate and concessional Bank finance on liberal terms in several pockets for specified activities concentrated in these pockets,

which would result in reducing transaction cost and greater economies of scale.

The Banks SME Policy covered all credit-related exposures (both Fund-Based and Non-Fund Based) and the policy guidelines relating to Credit Risk Management, Credit Delivery, Credit Monitoring and Recovery were made uniformly applicable to the SME to the extent these have not been modified under the Banks SME Policy. In case of modifications, the modified provisions of the SME Policy would prevail over the other Policy Guidelines of the Bank. With changes in any of these other policy guidelines, at appropriate levels, the SME Policy would also automatically stand amended. SME DEFINITION :The MSMED Act 2006, which came into force w.e.f. 02/10/2006, defines the Micro, Small, and Medium Enterprises. As per the Act, the activities are classified into Manufacturing and Service Category. Initially, the MSMED Act 2006 had not defined the Services Sector and RBIs guidelines were awaited. However, subsequently RBI has defined the services sector and the activities that can be covered under the SME sector. An illustrative list of Services Enterprises is furnished in Annexure I. The following chart indicates the threshold investment levels for both Manufacturing sector (INVESTMENT IN PLANT & MACHINERY)* and Services sector (INVESTMENT IN EQUIPMENT)* for the above three categories of Manufacturing and Services Enterprises :


Engaged in Engaged In Manufacturing / Providing/ Preservation of Rendering of Goods(incl. Processing Services Units) Micro Enterprise Not to Exceed Rs. 25 Not to Exceed Rs. Lakhs. 10 Lakhs. Small Enterprise More than Rs.25 lakhs More than Rs.10 but does not exceed Rs. lakhs but does not 5 Crores. exceed Rs. 2


1.Separate threshold investment limits proposed by the Act for Manufacturing and Services Sectors. 2.

Medium Enterprise

Crores. More than Rs.5 Crore More than Rs. 2 Rupees but does not Crore Rupees but Micro Enterprises newly exceed Rs. 10 Crore. does not exceed introduced under both Rs. 5 Crore. the sectors.

* While calculating the investment in plant and machinery/equipment referred to above, the original price thereof shall be taken into account, irrespective of whether the plant and machinery/equipment are new or secondhand. In case of imported machinery/equipment, the following duty/charges/costs shall be included in calculating their value:

Import Duty (not to include miscellaneous expenses such as transportation from the port to the site of the factory, demurrage paid at the port); Shipping Charges; Customs Clearance charges; and Sales Tax or Value-added Tax. Cost of the following plant & machinery/equipments etc would be excluded:; equipments such as tools, jigs, dies, moulds, and spare parts for maintenance and the cost of consumable stores; installation of plant &machinery; research and development and pollution control equipments; power generation set and extra transformer installed by the enterprises as per the Regulations of the State Electricity Board; Bank charges and Service Charges paid to the National Small Industries Corporation or the State Small Industries Corporation; Procurement or Installation of cables, wiring bus bars, electrical control panels (not mounted on individual machines) Oil circuit breakers or miniature circuit breakers which are necessarily to be used for providing electrical power to the plant and machinery or for safety measures;

Gas producer plants; Transportation charges (other than sales tax or value-added tax and excise duty) for indigenous machinery from the place of their manufacture to the site of the enterprise);

Charges paid for technical know-how for erection of plant machinery;


Such storage tanks which store raw materials and finished products only and are not linked with the manufacturing process; Fire-fighting equipment; and Such other items as may be specified, by notification from time to time.

In case of Service Enterprises, the original cost to exclude furniture, fittings and other items not directly related to the services rendered. Land and Building would also not be included while computing the machinery/equipmentscost. SME would be meant to include Micro Small and Medium Enterprises (MSMEs). The above definitions of Micro, Small and Medium Enterprises would be in place of the existing definitions of Small & Medium Industries and SSSBEs/Tiny Enterprises.

Micro Enterprises would include Tiny Industries also. Small Enterprises (Manufacturing) would mean Small Scale Industries (SSIs). Medium Enterprises (Manufacturing) would mean Medium Industries (MIs). Small Enterprises (Services) and Medium Enterprises (Services) would mean other Small & Medium Enterprises. Thus, SME Advances would be categorized as under:

All advances to segments viz. Micro, Small and Medium Enterprises in the Manufacturing sector irrespective of sanctioned limits, (including advances against TDRs/Govt. Securities etc for business purposes to these categories of Borrowers), and

Advances to Services Sectors such as Professional & Self-Employed, Small Business Enterprises, and Small Road/Water Transport Operators and other enterprises, - engaged in providing/rendering of services, - conforming to the above investment criteria and -enjoying borrowing/non-borrowing facilities with the Bank (including advances against TDRs/Govt. Securities etc for business purposes to these categories of Borrowers).

Those enterprises exceeding the investment ceilings would be categorized as Large Enterprises and be outside the purview of SME. The sanctioned limits would no longer be the criteria determining the status as

micro or small or medium enterprises in these cases.

Reserve Bank of India has since reviewed the definition on Priority Sector and have issued revised guidelines on lending to Priority Sector vide their Master Circular dated 2nd July, 2007. As per this circular Retail Trade is excluded from the activities classified as SME.

AGRICLINICS AND AGRIBUSINESS:1. OBJECTIVES: a. To supplement the efforts of Government extension system b. To make available supplementary sources of input supply and services to needy farmers c. To provide gainful employment to agriculture graduates in new emerging areas in agricultural sector 2. CONCEPT/DEFINITION :Agriclinics:- Agriclinics are envisaged to provide expert services and advice to farmers on cropping practices, technology dissemination, crop protection from pests and diseases, market trends and prices of various crops in the market and also clinical services for animal health etc. which would enhance productivity of crops/animals. Agribusiness centres: Agribusiness centres are envisaged to provide input supply, farm equipments on hire and other farm services. 3. ELIGIBILITY: The scheme is open to Agriculture Graduates/Graduates in subjects allied to agriculture like horticulture, animal husbandry, forestry, dairy, veterinary, poultry farming

pisciculture and other allied activities.

4. EDP TRAINING TO AGRI GRADUATES: SFAC/NABARD would be arranging a 2-month long intensive training to the agriculture graduates in accounting, business and related matters free of cost at selected centres throughout India. Upon completion of the said programme they would be issued a certificate and a registration number. 5. SELECTION OF BORROWERS: Selection of borrowers and location of the projects could be done by banks in consultation with the Agricultural Universities, KVKs/ Agriculture Departments of the state.etc. Besides, the name and address of those agriculture graduates who have completed the training programme can be had from the web site (National Institute of Agricultural Extension Management, Hyderabad) 6. PROJECT ACTIVITIES: An illustrative list of ventures. Soil and water quality cum inputs testing laboratories (with Atomic Absorption Spectrophotometers) Pest surveillance, diagnostic and control services Maintenance, repairs and custom hiring of agricultural implements and machinery including micro irrigation systems (sprinkler and drip) Agri Service Centres including the three activities mentioned above (Group Activity). Seed Processing Units Micro-propagation through Plant Tissue Culture Labs and Hardening Units Setting up of Vermiculture units, production of bio-fertilisers, bio-pesticides, biocontrol agents. Setting up of Apiaries (bee-keeping) and honey & bee products' processing units Provision of Extension Consultancy Services Hatcheries and production of fish finger-lings for aquaculture

Provision of livestock health cover, setting up veterinary dispensaries & services including frozen semen banks and liquid nitrogen supply Setting up of Information Technology Kiosks in rural areas for access to various agriculture related portals Feed Processing and testing units Value Addition Centres Setting up of Cool Chain fro the farm level onwards (Group Activity) Retail marketing outlets for processed agri-products Rural marketing dealerships of farm inputs and outputs Any combination of two or more of the above viable activities along with any other economically viable activity selected by the Graduates, which is acceptable to the Bank.

7. PROJECT COST AND COVERAGE: Agricultural graduates may take up the project either individually or on joint/group projects. The outer ceiling for the cost of project by individual would be Rs. 10 lakhs and for the project by group would be Rs. 50 lakhs. The group may normally be of 5, of which one could be management graduate with qualifications or experience in business development and management. However, for availing refinance under ARF, the outer limit of the project cost would be Rs. 25 lakhs subject to ceiling of Rs. 15 lakhs towards refinance availment. Projects with outlay above Rs. 25 lakhs may be submitted to NABARD for prior sanction. Facilities for SME Borrowers Agricultural loans are available for a multitude of farming purposes. Farmers may apply for loans to buy inputs for the cultivation of food grain crops as well as for horticulture, aquaculture, animal husbandry, floriculture and sericulture businesses. There are also special loans to finance the purchase of agricultural machinery such as tractors, harvesters and trucks. Construction of biogas plants and irrigation systems as well as the purchase of agricultural land may also be financed through special types of agricultural finance. Here is some information about the kind of agricultural credit and loans provided by public sector banks in India.



SELF EMPLOYMENT SCHEME FOR EDUCATED UNEMPLOYED YOUTHS OF VILLAGES:Educated unemployed youth of villages constitute a sizeable percentage who are unable to contribute due to lack of technical knowledge and financial support. Delhi Government has launched a scheme which envisages conversion of energy of such youths, through skill formation / upgradation, to enable them to take up self employment. The Scheme mainly targets passed 8th standard, 10th standard unemployed youth of villages. Training modules of three months duration in various trades such as Fashion Designing, Air Conditioning & Refrigeration, Beauty Parlor & Hair Dressing, Radio & T.V. Repair, Mobile & Computer Repairing, Electric HouseWiring etc. have been designed. The focus, therefore, will be on skill formation and entrepreneur development, basic component of which would be: 1. Skill formation 2. Elements of book keeping 3. Simple knowledge of marketing 4. Acquaintance with product costing 5. Familiarization with project financing by banks and other financial institutions. After completion of the training, the candidate can approach the financing institutions concerned including Delhi Khadi & Village Industries Board to avail the financial assistance under the Plan Scheme for providing opportunities for SelfEmployment for Educated Unemployed Youths being implemented through DKVIB, as per the scheme guidelines approved by the Govt. of Delhi. The present level of financial assistance under the scheme is to the extent of Rs. 2.00 lacs as loan in individual cases at the rates of interest as fixed by the Govt. from time to time The Delhi Govt. would provide subsidy @ 15% of the project cost subject to a ceiling of Rs.


7,500/ per entrepreneur. The repayment of loan would range from 3 to 7 years after a maximum initial moratorium of 12 months from the date of release of loan.


PRADHAN MANTRI ROZGAR YOJNA(PMRY) Pradhan Mantri Rozgar Yojna (PMRY) for providing selfemployment to educated unemployed youth of economically weaker sections has been in operation since October 2, 1993. The scheme aims at assisting the eligible youth in setting up selfemployment ventures in industry service & business sectors. The scheme intends to cover urban and rural area.

ELIGIBILITY / PARAMETERS: 1. Age: (i) 18 to 35 years for all educated unemployed. (ii) 18 to 45 years for Scheduled Castes / Scheduled Tribes, Exservicemen, Physically Disabled and Women.

2. Educational Qualification: VIII Pass. Preference will be given to those who have been trained for any trade in Government recognized / approved institutions for duration of at least 6 months.

a) Family Income : Neither the income of the beneficiary alongwith the spouse nor the income of parents of the beneficiaries shall exceed Rs. 1,00,000/ per annum. b) Residence: Permanent resident of the area of at least 3 years. (Relaxed for married men in Meghalaya and for married women in rest of the country. For married men in Meghalaya and for married women in rest of the country, the residency criteria applies to the spouse or inlaws). c) Defaulter: Should not be a defaulter to any Nationalized bank / financial institution/coop. bank. Further, a person already assisted under other subsidy linked Govt. schemes would not be eligible under this scheme.


d) Activities Covered: All economically viable activities including agriculture and allied activities but excluding direct agricultural operations like raising Crop, purchase of manure etc. as per the permissible locational parameters prescribed in the Master Plan Delhi2021.

e) Project Cost: Rs. 2.00 lacs for business / service sector and Rs. 5.00 lacs for industry sector, loan to be of composite nature. If two or more eligible persons join together in a partnership, project upto Rs. 10.00 lacs are covered..



Unemployed Youth satisfy the eligibility criteria

laid down under the scheme volunteer to form SHG to set up selfemployed ventures (Common Economic Activity as permissible locational parameters of MPD2021).
_ A Self Help Group may consist of 520 educated unemployed youth.

_ No upper ceiling on project cost.

_ Loan may be provided as per individual eligibility taking into account requirement

of the project. _ SHG may undertake common economic activity for which loan is sanctioned without resorting to onward lending to its members.
_ The subsidy ceiling for Self Help Group is Rs.15,000/ per beneficiary subject to

a minimum of Rs. 1.25 lacs per Self Help Group. _ Required margin money contribution (i.e. subsidy and margin to be equal to 20% of the project cost) should be brought in by the SHG collectively.
_ The exemption limit for obtention of collateral security will be Rs. 5.00 lacs per

borrowal account for projects under industry sector. Exemption from collateral will be limited to an amount of Rs. 2.00 lacs per member of SHG for projects under Service & Business Sectors. Banks may consider enhancement in limit of exemption of collateral in deserving cases.
_ Implementing agencies may decide necessity of predisbursal training for all the

members / majority of the members of the Group. Subsidy & Margin Money: Subsidy will be limited to 15% of the project cost subject to ceiling of Rs. 12.500/ per entrepreneur. Banks will be allowed to take margin money from the entrepreneur varying from 5% to 16.25% of the project cost so as to make the total of the subsidy and the margin money equal to 20% of the project cost. Security: Hypothecation / mortgage / pledge of assets created out of loan amount. No collateral for units in industry sector with project cost upto Rs. 5.00 lacs. (the loan ceiling under the PMRY). For partnership projects under industry sector, the exemption limit for obtention of collateral security will be Rs. 5.00 lacs per borrower account. For units in service and business sector no collateral for project upto Rs. 2.00 lacs. Exemption


from collateral in case of partnership project will also be limited to an amount of Rs. 2.00 lacs per person participating in the project cost.


Rate of Interest & Repayment Schedule: Normal rate of interest shall be charged. Repayment schedule may range from 3 to 7 years after an initial moratorium as may be prescribed. Reservation: Preference should be given to weaker sections including women. Assistance to SC/ST beneficiaries should be targeted in such a manner that they are benefited in proportion to their population in the respective district / State. However, the number of SC / ST beneficiaries should not be less than 22.5% and 27% for Other Backward Class (OBCs) as is currently envisaged in the PMRY. In case SC / ST/ OBC candidates are not available, States / UTs Govt. will be competent to consider other categories of candidates under PMRY. PMRY has been decentralized for the purpose of implementation to 9 districts of Delhi with effect from 1st April 1998 at the level of nine Deputy Commissioners. Application Forms are available free of cost with the respective Deputy Commissioners Office as per the addresses given below. Duly filled in Application Forms with all relevant supporting documents are to be submitted to the Deputy Commissioner of the respective districts where the applicant intends to set up his/ her venture. The interviews by the Task Force Committee will be conducted under the Chairmanship of Deputy Commissioner in their respective office:






Government of India has approved the introduction of a new credit linked subsidy programme called Prime Ministers Employment Generation Programme (PMEGP) by merging the two schemes that were in operation till 31.03.2008 namely Prime Ministers Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP) for generation of employment opportunities through establishment of micro enterprises in rural as well as urban areas. PMEGP will be a central sector scheme to be administered by the Ministry of Micro, Small and Medium Enterprises (MoMSME). The Scheme will be implemented by Khadi and Village Industries Commission (KVIC), a statutory organization under the administrative control of the Ministry of MSME as the single nodal agency at the National level


SMALL AND MEDIUM ENTERPRISES STRATEGIC BUSINESS UNIT :MICRO, SMALL ENTERPRISES (MSE) Introduction of simplified loan proposals forms:MSME-1= For small road transport operators MSME2= For all micro and small enterprises (both manufacturing and services for limits upto Rs 25 lakh) MSME-3= For all micro and small enterprises (both manufacturing and services for limits Rs 25 lakh to Rs 2 crore)


The main objective of my study towards the problem approach is as below: To find out whether the unemployed youth of villages are interested to take agricultural

credit and loans and the bank they prefer for this purpose. To find out which type of loans is mostly preferred by the unemployed youth of villages and the business activity they preferred.
To find out whether they are satisfied with the terms and conditions of granting loans

and the obstructions faced by them.

To find out the level of awareness among the youths of villages regarding various

schemes and programs of government of India.

To analyze the opinion of villagers regarding the strength and weakness of bank of India

and whether BOI organizes any awareness campaign in villages or not.

To analyze the satisfaction level among the youths regarding the repayment schedule. Comparative study of banks that provide more lucidly the Agricultural credit & loans to

the unemployed youth of villages

To analyze whether they are able to earn their livelihood in better manner and their

future perspective. To study the causes for the non repayment of loans.
To find out the areas that needs more attention for better loan management.



This study has been exploratory and descriptive. Data was collected through survey with structured data collection method i.e. a formal questionnaire was prepared with questions in a prearranged format and sequence. In addition to this informal questions were also asked.

Research Technique Questionnaire Survey : The questionnaire survey method was used for data collection to obtain data from the respondents.

Interview Technique : Oral communications were made to respondent about their requirements. The gram vikas adhikari (secretary), gram pradhans were contacted with this regard to gather basic information. I have also undergone to a detail interview with unemployed youths of villages and persons. Research Tool Interpretation is based on percentage analysis. Sampling The sampling technique used in the study is cluster & convenience sampling. Elements Sampling units Villagers. Kuar bazar area of varanasi districts. other related

Period of study conducted May-June, 2011 Sampling size 100


Secondary Data They refer to the data which have already been collected and analyzed Secondary data means data that are already available i.e. by someone else. When the researcher utilizes secondary data, then he has to look into various sources from where he can obtain them. In this case I was certainly not confronted with the problems that are usually associated with the collection of original data. Internet Books Bank officials Primary data Primary data are those that are collected fresh and for the first time and this happen to be original in character. There are several methods of collecting primary data. a) Observation method b) Through Questionnaires c) Interview method d) Through schedules The source for primary data has been the survey conducted by me with the support of officials from BOI.


Data Collection Stage

Stage I Gathering the Information about agriculture credit of BOI Information about various aspects of agriculture credit of BOI was collected and emphasis was given on the need of marketing in the BOI. The basic source was the literatures of BOI and other concerned Bank.

Stage-II Gathering the information about loans given to the unemployed people The personal interviews were conducted with customers about various schemes & policies of BOI in the market and their impact on their development.

Stage III Information Handling The collected information is handed over to our project guide, then a detail discussion took place on the information and final decision is taken whether to further proceed on it or not. Stage IV Data Analysis The data collected about various prospect, is analyzed and a clear picture about the programs and their impact is obtained and it is presented to the top management.

Scope of the Study


The research was conducted only in the kuar bazar area of Varanasi


about various aspects of agriculture credit and loans of BOI and their impact on customers. So cant be represented at national level but can be a helpful tool for further study in this area to students, researchers, academicians etc. This study will also help Varanasi marketing department to improve their marketing system.


This project was mainly concerned with the agriculture credit and loans of BOI in Varanasi districts where imparting any kind of information is quiet difficult due to lack of proper and efficient communication channels, so lack of proper and complete information about the topics covered in this project was one of the main limitations of this project. Other limitations faced during the project were: Accuracy of data depends upon the ability & willingness of the respondents. Unwillingness of respondents to share information. As the primary data about customer satisfaction and customer relations is collected through convenient sampling so the exact market scenario could be different than the analysis shown. Respondents were reluctant to answer questions as they were not aware of the importance of the project and topic. Availability of respondents for questioning was also limited due to summer season. In some cases education level of respondent was a limiting case. Secondary data are available in the scattered manner due to which problem arises in summarization of data. Also the requirements of customers were very much scattered in terms of size & specifications.



AT A GLANCE:As of 2001 India census, kuar bazar had a population of 13,633. Males constitute 57% of the population and females 43%. Kuar bazar has an average literacy rate of 53%, lower than the national average of 59.5%: male literacy is 60%, and female literacy is 43%. This is probably not true, as this (mathematically)implies (solve .60p+.43(1-p) = .53 for p) a highly skewed sex ratio with 59% male and only 41% females in Kuar bazar. In kuar bazar 13% of the population is under 6 years of age.

The study was conducted at Varanasi district .The number of self -help groups were very less as BOI in kuar bazar is a rural branch, the villages covered under kuar bazar branch are1. NIMAICH 2. HAMIRAPUR 3. NINDANPUR 4. KUAR COAT 5. NATHAIPUR 6. TETUA 7. RASULPUR 8. CHAMHAPUR 9. NAYI VASTI 10. HASANPUR 11. BHARTHARA 12. DARAPUR



SCHEMES Bakri palan Suvar palan Bhais palan Motor mechanic Light sajavat Cloth store Stationary store

LOAN AMOUNT Rs. 15,000 Rs.15,000 Rs. 20,000 Rs.15,000 Rs.20,000 Rs.20,000 Rs.15,000




Government ownership of the bank gives cutting edge over private sector bank. Our status as one of the large public sector banks and major player in the industry plays important role in the marketing of deposit products. Wide network of branches gives us platform to reach wide spectrum of customers.

WEAKNESS The Bank is having lack of staff that is causing extra burden on other staff members.
The Productivity of banks new campaign is thus reduced.

Marketing of new products lack required vigor from staff.



Diversified business opportunities provide good scope for expansion. Technological innovations have expanded the horizon of banking services and are presenting numerous opportunities.

Liberalized economy has prescribed business potential for the banking sector and retail is one such area.


Competition is collapsing market share. Other banks have professional BOI should also learn it and use it for business development.

approach and

Customer loyalty cannot be taken for granted. We should develop best relationship with our customers. Internet banking will make the branch network redundant in the urban and metropolitan centers.




1. The survey was conducted to know whether the unemployed youth of

villages have taken the agricultural credit and loans from Bank of India. . Sample size-200











unemployed people of village have taken the agricultural credit and loans

from Bank of India while 48% unemployed youth of villages have not taken any loans.

2. The survey was conducted to know the types of loan that had been taken by the
unemployed youth of villages from the bank.


INTERPRETATION:- Maximum respondents gave the preference to short term loan i.e.66% while 22% have taken the loan for medium term, and only 12% have taken the long-term loan.

3. The survey was conducted to know the purpose for taking the loan.


INTERPRETATION:- With the help of this graph we can see that maximum number of respondents i.e.42% had taken the loan for small/medium enterprise, 26% had taken the loan for farm mechanization, 18% for dairy / husbandry, 12% for poultry/fishery, and 2% for other purposes.


4. The survey was conducted to know the satisfaction level among youths for Bank of


INTERPRETATION:- 46% of the unemployed youths were totally satisfied, 24% were partially satisfied, 18% were partially dissatisfied, while 12% were totally dissatisfied with bank of India PARAMETERS FOR JUDGING THE SATISFACTION LEVEL 1: Lesser loan rate 2: Easy loaning procedures 3: Good customer interaction

6. The survey was conducted to know the channels of information about schemes of



INTERPRETATION:- 46% of the unemployed youth of villages got the information through relatives/friends, 24% through newspapers/TV radio, 18% through Bank of India officials, 14% through gram vikas adhikari, 2% through other sources.


7. The survey was conducted to find out the need of insurance on credited /loaned



INTERPRETATION:- Maximum number of respondents ie 62% strongly agreed for the need of insurance on credited/loaned amount, 12% partially agreed, while 15% strongly disagreed for any type of insurance while 11% partially disagreed


8. the survey was conducted to know the type of campaigns organized by Bank of India..



INTERPRETATION:- 34% of the campaigns were of promotional in nature, while 26% were of educational type, 22% were related to the social issues, 10% were others , and 8% areas were no campaigns organized.


9. The survey was conducted to know the schemes under which the loans had been granted.


KGVS, 19% through KCC, 25% through PMRY, 11% through RGSRY, 3% through


Prime ministers employment generation programme Khadi gram udyog vikas samiti Kisan credit card Pradhan mantri rojgar yojna Rajiv Gandhi swavalaman rozgar yojna


10) The survey was conducted to find out the hurdles faced by the unemployed youth of villages during loaning procedures.


INTERPRETATION- 47% hurdles were faced at the government level, 23% were through bank level, while 30% were at block level


11. The survey was conducted to know whether the youths were satisfied with the

repayment schedule.


INTERPRETATION:- 78% were satisfied with the repayment schedule of bank, while 22% were not satisfied with the repayment schedule of bank.


12) The survey was conducted to find out monthly income of the youths.


INTERPRETATION:- 37% of the youths had a monthly income between 1000-2500, 24% youths had 2500-5000, 19% youths had 5000-7500, 14% had 7500-10000, while only 6% had income above 10000.


13) The survey was conducted to find out the youths willing to expand their business.


INTERPRETATION:- 88% of the youths willing to expand their business activity while 12% were satisfied with their present conditions therefore not interested in further expansion of their business activity.


14) The survey was conducted to find out whether the youths are able to pay installments on time.


INTERPRETATION:- 68% of the youths were able to pay installments on time, while 32% were not able to pay the installments on time.


15) The survey was conducted to find out the problems faced in running business activity.


INTERPRETATION:- 28% of the respondents told that they suffer due to inadequate knowledge, 20% told that they were unaware about the market condition, 14% suffer due to lack of skills, 34% faces problem due to improper guidance, 4% were dishonest.

16) The survey was conducted to find out the specific areas where bank needs more attention.


INTERPRETATION- 26% of the unemployed youths of villages said that bank needs to decrease the transaction time, 17% said that paper work should be reduced, 23% said that repayment time should be increased, 31% said that a proper guidance should be provided to the youths, while 3% said other factors.


Only 52% of the unemployed youths have taken the agricultural credit and loans. in the

kuar bazar region of Varanasi district.

26% of the unemployed youths preferred bank of india in comparision to 32%of state

bank of india. 66% of the unemployed youth of villages preferred short term loans. 42% of the unemployed youth of villages had taken the loan for the establishment of small/medium enterprise, 26% had taken the loan for farm mechanization, 18% had taken the loan for dairy development and animal husbandry, 12% had taken the loan for fishery and poultry purpose while 2% for other purposes.
Only 46% of the unemployed youths were totally satisfied with the terms and conditions

of agricultural credit and loans of bank of india. Only 26% educational campaigns were organized by bank of india Only 18% of the unemployed youth of villages came to know about various schemes of loans through bank of india officials.
62% of the unemployed youths believe that the loaned amount must be insured.

27% of the unemployed youths had been granted loans through PMEGP, 15% through KGVS, 19% through KCC, 25% through PMRY, 11% through RGSRY, while 3% through other schemes. 47% of the unemployed youths had faced the obstruction on the part of government, 23% had faced the obstruction on the part of bank, while 30% had faced the problems at block level. 78% of the unemployed youth of villages were satisfied with the repayment schedule of bank of india while 22% were not satisfied.
28% of the unemployed youths blamed the inadequate knowledge as the hurdle in

running their business activity successfully, 20% says that unawareness about market conditions , 14% says lack of skill to be reason while 34% says the improper guidance is the main cause of failure

26% says that transaction time is the Specific area that needs more attention for increasing the agricultural credit and loans , 17% says its the lethargic paper work, 23% explains it to be the repayment time, 31% says its the lack of guidance from bank, while 3% explains it to be the other reasons.



Only 52% of the unemployed people of villages had taken the agricultural credit and

loan from bank therefore still a huge share of 48% is left unoccupied that needs immediate attention.
Only 18% of the unemployed people of villages had taken the loan for dairy

development and animal husbandry, and only 12% had taken the loan for poultry and fishery purposes hence there is a very vast scope for increasing the loan lending in these fields.
Only 18% of the unemployed people of villages came to know about various schemes of

loan through bank of India officials this shows the lack of interest and incompetent attitude of bank officials and it must be eradicated
62% of the unemployed people of villages had strongly urged the need of insurance

cover on the loaned amount.

Only 34% of the youth had said that the awareness campaign related to promotional

activity were organized hence in order to increase the awareness more educational activity should be organized. .
31% of the unemployed people of villages had said that due to lack of proper guidance

from bank they faced a lot of problems in running their business activity successfully therefore proper interaction among the customers and bank officials should be maintained


Kuar Bazar Branch, Varanasi

1) Have you taken the agricultural credit or loans from Bank of India.

a. YES b. NO

2) Which Bank you gave preference for taking the agricultural credit or loans.

a. BOI b. SBI c. BOB


3) Which type of loan you have taken from bank.


Information to be furnished by the Applicants for Credit Applicant Details of the Age Educational Qualification Present Activity Annual Income (Rs.) Residenti al Address


Sr. No.

Name Applicant

2. Details of agricultural land cultivated by the applicants


Name Revenue Village

of Survey No.


of Irrigated A. G.


Type facility

of Market Value Agri. per acre

Total value of of land Land Agri.


irrigated A . Irrigation

3.Details of crop cultivated by the applicants (Last year or average) Season Name crop of Irrigated AG Unirriga-ted AG Crop cultivation expenses incurred (Rs.) Annual Crop Productio n quintal Value per (Rs.) Total crop received (Rs.) Profit (Rs.) /

of crop value of Income in quintal

4) Purpose for which you have taken the loan. a. For establishing (small/medium) enterprise b. Farm mechanization
c. For dairy development or animal husbandry

d. For poultry & fishery

e. For other employment generation purpose

5) Are you satisfied with the terms and conditions of agricultural credit and loans provided

by bank of india to the unemployed youth of villages?

a. Totally Satisfied

b. Partially satisfied
c. Totally dissatisfied

d. partially dissatisfied Parameters for judging the satisfaction level 1: Lesser loan rate 2: Easy loaning procedures 3: Good customer interaction

6) How you came to know about various schemes of employment generation programmes

of government of india.
a. By relatives/friends

b. News paper/T.V./Radio c. Bank of india officials d. Gram vikas adhikari/gram pradhan e. Other sources
7) According to you is there need of insurance on credited/ loaned amount.

a. Strongly agree b. Agree c. Strongly disagree d. Disagree


Which type of campaigns Bank Of India organizes at your village. a. Promotional activity b. Educational activity c. Social activity d. Other activity e. No campaigns


Under which scheme you have been granted loans. a. PMEGP (prime ministers employment generation programme) b. KGVS (khadi gram udyog vikas samiti) c. KCC (kisan credit card) d. PMRY (pradhan mantri rojgar yojna) e. RGSRY (rajiv Gandhi swavalaman rozgar yojna) f. OTHERS

10). What are the hurdles faced during loaning procedures.


Government level


b. Bank level c.

Block office level

11). Are you satisfied with the repayment schedule of bank of India. a. yes b. no 12). After repaying of your monthly installment of loans and other expenses how much is your monthly income. a. 1000-2500 b. 2500-5000 c. 5000-7500 . d. 7500-10000 e. above 10000 13). Would you like to expand your business activity in future. a. yes b. no 14). Are you able to pay the installment amout of your loan on time. a. yes b. no 15). What are the problems faced by you in running your business activity successfully. a. inadequate knowledge b. unaware about market conditions c. lack of skills d. improper guidance e. dishonesty 16). according to you which specific area needs more attention regarding agricultural credit and loans a. transaction time b. paper work

c. repayment time d. guidance from bank

e. others

Name of Farmer. Village District . Main occupation. Name of the bank .





- Credit deposit ratio -Profit and loss account - Number - Nonperforming assets - Outstanding - National Bank for agriculture and rural development - statutory liquidity ratio -Micro finance - Reserve Bank of India - Bank of Baroda - Bank of India - State Bank of India - Strenth,weakness,Opportunity and Threat -Self help group - kisan credit card


BIBLIOGRAPHY:1. kotlar, PHILLIP: Marketing management, Pearson, New Delhi, 2. payne,







Burlington,2005 3. Cooper R Donald and Schindler S Pamela.: Business Research Methods, Tata McGrawHill publishing companies Ltd., New Delhi, 2006.
4. Kothari, C.R.: Research Methodology: vikash publication, New Delhi.

5. Handbook of Bank of India

WEBSITE 1. 2. 3. 4.

BOIs Annual Report 2010-2011 BOIs Annual Report 2009-2010

BOIs Annual Report 2008-2009 BOIs Annual Report2007-2008



2) BUSINESS TODAY-magazine