EXECUTIVE SUMMARY This study has been primarily conducted to study the different deposit schemes of State Bank

of India. This study endeavor to collect the information regarding deposits, their types, interest rates and the purpose of holding deposits by the customer and about the working of the staff members of the SBI, MCC Branch Davangere.

So it is very important to check whether deposits yield the expected returns to the investors, it is obvious as this point of that a question strikes to our mind as to why only some deposits give good returns.

There may be many factors which contribute for yielding returns. The following are factors which may have contributed to the higher returns. Less fees and expenses, conservative(less risk fund manager), use of hedging techniques, fund managers prediction or forecasting of securities movement ability.

So in the above context the first point seems to be more appropriate answer to the question as to why only the Deposits of SB


INDUSTRY PROFILE: Human being is always in need of money for his survival either for his personal use or for business purpose, so, it is always not possible for him to arrange money from his own sources. On that time, he seeks to borrow from banks, co-operative society, pawn broker etc, among all these sources he prefers to borrow from banks as the consideration of availability of funds, terms and conditions. The word bank is derived from the word “baneus” or “banque” from the French language which is known as bench as banking in the earlier days was done by sitting on the bench. The history of banking can be traced to Europe from the middle ages. Earlier banking was limited to the exchange of money. According to some others the name bank is derived from the German word “bank” which means “a joint stock fund or common funds sources from the public to finance the media”. On account of the multi various activities of the modern banks it has been found very difficult to define exactly the word bank. However various attempts have been made to define the term banking, bank and essential characteristics of bankers. A BRIEF HISTORY OF BANKING Banking activities were sufficiently important in Babylonia in the second millennium b.c. that written standards of practice were considered necessary. These standards were part of the Code of Hammurabi the earliest known formal laws. Obviously, these primitive banking transactions were very different in many ways to their modern-day counterparts. Deposits were not of money but of cattle, grain or other crops and eventually precious metals. Nevertheless, some of the basic concepts underlying today’s banking system were present in these ancient arrangements, however. A wide range of deposits was accepted, loans were made, and borrowers paid interest to lenders. Similar banking type arrangements could also be found in ancient Egypt. These

arrangements stemmed from the requirement that grain harvests be stored in centralized state warehouses. Depositors could use written orders for the withdrawal of a certain 2 BIET-MBA PROGRAMME, DAVANGERE

quantity of grain as a means of payment. This system worked so well that it continued to exist even after private banks dealing in coinage and precious metals were established The modern-day banking activities can be traced to the practices in the Medieval Italian cities of Florence, Venice and Genoa. The Italian bankers made loans to princes, to finance wars and their lavish lifestyles, and to merchants engaged in international trade. In fact, these early banks tended to be set up by trading families as a part of their more general business activities. The Bardi and Peruzzi families were dominant in Florence in the 14th century and established branches in other parts of Europe to facilitate their trading activities, Both these banks extended substantial loans to Edward III of England to finance the 100 years war against France. But Edward defaulted, and the banks failed. Perhaps the most famous of the medieval Italian banks was the Medici bank, set up by Giovanni Medici in 1397.The Medici had a long history as money changers, but it was Giovanni who moved the business from a green-covered table in the market place into the hall of a palace he had built for himself. He expanded the scope of the business and established branches of the bank as far north as London. While the Medici bank extended the usual loans to merchants and royals, it also enjoyed the distinction of being the main banker for the Pope. Papal business earned higher profits for the bank than any of its other activities and was the main driving force behind the establishment of branches in other Italian cities and across Europe. Much of the international business of the medieval banks was carried out through the use of bills of exchange. At the simplest level, this involved a creditor providing local currency to the debtor in return for a bill stating that a certain amount of another currency was payable at a future date often at the next big international fair. Because of the prohibition on directly charging interest, the connection between banking and trade was essential. The bankers would take deposits in one city, make a loan to someone transporting goods to another city, and then take repayment at the destination. The repayment was usually in a different currency, so it could easily incorporate what is essentially an interest payment, circumventing the church prohibitions. An example shows how it worked. A Florentine 3 BIET-MBA PROGRAMME, DAVANGERE

As free banking quickly spread to other states. banks incorporated under these state laws had the right to issue their own bank notes. The goldsmith would then issue a receipt for the deposit. Five years after the Declaration of Independence. A key development often credited to the London goldsmiths around this time was the adoption of fractional reserve banking. At first. they could issue more receipts than they had metal in their vault. In London. This legislation allowed national banks to issue notes and placed a tax on state issued bank 4 BIET-MBA PROGRAMME. This led to a multiplicity of notes many of which proved to be worthless in the (all too common) event of a bank failure. With the civil war came legislation that provided for a federally chartered system of banks. During the 17th and 18th centuries the Dutch and British improved upon Italian banking techniques. Forced to find a way to make a living. But eventually. DAVANGERE . and by 1794. New York adopted the Free Banking Act. the first chartered bank was established in Philadelphia in 1781. since not all of the depositors would demand their gold and silver simultaneously. the civil war had resulted in the demise of the goldsmiths traditional business of making objects of gold and silver. the bank would then loan out the 40.000 pence in three months in the banks London office. problems associated with the system soon became apparent. For example. Banks became an integral part of the US economy from the beginning of the Republic. and have the means to safely store precious metal. In six months. By the middle of the 17th century. At first. bank charters could only be obtained through an act of legislation. in 1838. there were seventeen more.4 percent.bank would lend 1000 florins in Florence requiring repayment of 40. they turned to accepting deposits of precious metals for safekeeping. these receipts circulated as form of money. the goldsmiths realized that. the bank makes 11. But. It is also interesting to note that a double-entry bookkeeping system was used by these medieval bankers and that payments could be executed purely by book transfer.000 pence to be repaid in Florence at a rate of 36 pence per florin in three months.1 percent that an annual rate of 23. which allowed anyone to engage in banking business as long as they met certain legal specifications.

In order to keep the profit percentage high the banks started giving the auxiliary or subsidiary services to its customers besides the basic functions of deposits and lending. exchange of currency etc. DAVANGERE . These national bank notes came with a federal guarantee. which protected the noteholder if the bank failed. The deposits are accepted at the lower rate of interest and lended at the higher rate of interest. This new legislation also brought all banks under federal HISTORY OF BANKING IN INDIA 5 BIET-MBA PROGRAMME. offering the facility of safe deposit lockers. Difference in interest rate would be the case of profit or expenses for the banks. For providing such services the banks were charging nominal fees from the customers and the customers were happy to pay the fees and utilize such services as both the creation and the risk of such transactions were passed on to the bankers. These subsidiary services such as remitting the money from one place to another. supervision.notes. CHARECTERISTICS AND IMPORTANCE OF BANKING The primary functions of the banker are to accept the deposits from the persons who have surplus money and lending the same to the needy persons. Day to day with the emergence of the new banks and due to the severe competition the banks were not able to earn the profits and maintain their profit margin with their primary functions of accepting the deposits and lending the loans. accepting the articles for safe custody.

DAVANGERE . bank of Bombay (1840). the first joint stock bank was the bank of Hindustan established at Calcutta in 1770. Without a sound and effective banking system in India it cannot have a healthy economy. The other joint stock bank established at that time were the bank of Bengal (1806). the bank was wound up in 1872.” Besides the normal commercial functions they were also performing certain central banking finance in their respective region. Today the Indian banking system is one of the developed commercial banking systems in the world. and the banking was mainly vested in the hands of the money lenders. 6 BIET-MBA PROGRAMME. In 1899 ouch commercial bank was established it was the first pure Indian joint stock bank it was followed by the Punjab national bank (1894). The most striking is its extensive reach. In fact. All these banks were amalgamated in 1921. It is no longer confined to only metropolitans or cosmopolitans in India. The earliest bank on the western line was established at madras at 1683.The development of modern banking in India started with the banking activities which were undertaken by the English agency houses at Calcutta and Bombay which combined banking with trading. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. Indian banking system has reached even to the remote corners of the country. Growth of the banks was very slow during the first half of the 20th century as the Indian commercial banking system had to pass through a series of financial aims. the bank were called “presidency bank. This is one of the main reason of India's growth process. It was taken over by the government and was renamed as state bank of India. the people’s bank (1901) and so on. It is only after the independence the Indian commercial banking system has made the rapid progress. For the past three decades India's banking system has several outstanding achievements to its credit.

These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks. Canara Bank. was set up in 1894 with headquarters at Lahore. Bank of Baroda. Indian Bank. an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. During the first phase the growth was very slow and banks also experienced periodic 7 BIET-MBA PROGRAMME. Bank of India. Between 1906 and 1913. though conservative. In 1865 Allahabad Bank was established and first time exclusively by Indians. Today. The first bank in India. Not long ago. the journey of Indian Banking System can be segregated into three distinct phases. was established in 1786. Central Bank of India. Next came Bank of Hindustan and Bengal Bank. Money have become the order of the day. Now it is simple as instant messaging or dial a pizza. PHASE1 The General Bank of India was set up in the year 1786. Reserve Bank of India came in 1935. DAVANGERE . They are as mentioned below: Early phase from 1786 to 1969 of Indian Banks Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms. and Bank of Mysore were set up. The East India Company established Bank of Bengal (1809). he has a choice. Punjab National Bank Ltd. Gone are days when the most efficient bank transferred money from one branch to other in two days. Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. From 1786 till today.The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of the 14 major private banks in India. mostly Europeans shareholders. New phase of Indian Banking System started with the advent of Indian Financial & Banking sector reforms after 1991.

1969: Nationalization of 14 major banks. it nationalized Imperial Bank of India with extensive banking facilities on a large scale specially in rural and semi-urban areas. During those day’s public has lesser confidence in the banks. major process of nationalization was carried out. 14 major commercial banks in the country was nationalized. 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. DAVANGERE . Phase2: Government took major steps in this Indian Banking Sector Reform after independence. Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th July. As an aftermath deposit mobilization was slow. 1969. This step brought 80% of the banking segment in India under Government ownership. 23 of 1965). 1955: Nationalization of State Bank of India. 1961: Insurance cover extended to deposits. 1959: Nationalization of SBI subsidiaries. The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country: 1949: Enactment of Banking Regulation Act. mostly small. Mrs.failures between 1913 and 1948. Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with seven more banks. Indira Gandhi. To streamline the functioning and activities of commercial banks. There were approximately 1100 banks. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central banking authority. In 1955. the Government of India came up with The Banking Companies Act. It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions of the Union and State governments all over the country. funds were largely given to traders. 8 BIET-MBA PROGRAMME. Moreover. It was the effort of the then Prime Minister of India.

the foreign reserves are high. The financial system of India has shown a great deal of resilience. the capital account is not yet fully convertible. Time is given more importance than money. The working of social control policy revealed that the credit target for the agriculture and small scale industries were being fully met and even exceeded but it was argued that the social control of banks without nationalization provides no guarantee that the direction 9 BIET-MBA PROGRAMME. This is all due to a flexible exchange rate regime. Efforts are being put to give a satisfactory service to customers. The entire system became more convenient and swift. under the chairmanship of M Narasimham. Phase3: This phase has introduced many more products and facilities in the banking sector in its reforms measure. The country is flooded with foreign banks and their ATM stations. 1975: Creation of regional rural banks. In 1991. and banks and their customers have limited foreign exchange exposure. a committee was set up by his name which worked for the liberalisation of banking practices. Prohibition of illegal activities. Restriction of loan to directors. 1980: Nationalization of seven banks with deposits over 200 crore. It contains important provisions such as. Social Control Over Bank: In the year 1968 social control provisions were impound on the banking company. Phone banking and net banking is introduced. Government takeover of bank. • • • • Reconstitution of board of directors.1971: Creation of credit guarantee corporation. DAVANGERE . It is sheltered from any crisis triggered by any external macroeconomics shock as other East Asian Countries suffered.

Bank of Baroda 5. Canara Bank 7. Allahabad Bank 11. The Central Bank of India 3. 14 major Indian commercial banks having aggregate deposits of not less than 50 crores were taken over by the government of India through an ordinance caused. United Bank of India 8. United Commercial Bank 6. DAVANGERE . Syndicate Bank 12.issued by the RBI would be faithfully carried out by the commercial banks under the “scheme of social control”. Dena Bank 9. 10 BIET-MBA PROGRAMME. The Punjab National Bank 4. Some banks did try to help the small farmer and small industrialists but the end result was inadequate and unsatisfactory. Indian bank 14. NATIONALIZATION OF BANKS: On July 19th 1969. Bank of India 2. Union Bank of India 10. “Banking Companies Acquisition of 1969” The 14 Major Commercial Banks Are 1. Indian Overseas Bank On 15th April 1980 the government has nationalized 6 more banks having the deposits of 200 crores or more They are. Bank of Maharashtra 13.

DAVANGERE . This was against the principle of Indian constitution which demanded deduction of disparities in income and wealth. Especially in the rural sector. small towns and lower income groups. Oriental Bank of Commerce 5. Vijaya Bank The nationalization of commercial banks constitutes an important landmark in the banking history of the company as a result more than 90% of the banking came under the direct control of the government. The broad objectives of the nationalization of banks were framed to avoid the following crises. Corporation Bank 3. they are responsible for the lopsided development. Those who are able to determine the pattern of association and investment of bank finance according to their interest of convenience. Punjab and Sindh Bank 6. Moreover the banks have shifted the savings of some states and directed those to the other states. Thus. New Bank of India 4. As the ownership and control was in the few hands it lead to the concentration of power and disparity of income in a country. 2) Failure to mobilize the resources: Commercial banks have failed to mobilize the resources of the community. 1) Ownership and control in few hands: The Indian commercial banks were controlled by a very small number of shareholders. 3) Resources utilized by the director: The savings of the general public were used by the director to promote their personal interest as to provide loans to those business connections in which the directors 11 BIET-MBA PROGRAMME. Andhra Bank 2.1.

5) Indifference to the needs of agriculture: Agriculture was completely ignored by the commercial banks. As a result of opening the new branches the average population served per bank office was around 65000 in 1969 has come down to 11. Branch Expansion: Branch expansion gained much importance after commercialization of major commercial banks. expansion of credit for the development purpose and certain other neglected sectors.000 in 12 BIET-MBA PROGRAMME. Such a policy of the bank went against the policy of government for the encouragement of small scale units.were interested. The number of branches have gone up 834 in June 1969 to 6528 at the end of the march 1992 that is the number of branches have increased by more than 500% during the last two decades. This is the main reason for the failure of the planning in the agriculture sector and consequently for the failure of general planning. deposit mobilization. funds for the small scale industries and agriculture. 6) Misuse of funds: The funds of the commercial banks were not used for holding the essential goods instead they were used for speculation purposes i. DAVANGERE . the banks were giving the loans for the anti social elements who were able to get the funds for the large project through the exploitation of shortage of essential goods. 4) Discrimination against the small business units: The commercial banks failed to provide assistance to small scale units. The rise in the price level was due to the activities of the anti social elements that had the support of the banks for their activities.e. That means the funds of the commercial banks were not utilized for the promotion of the agriculture and the industrial sector. Progress of the nationalized banks: The major achievement of the nationalized banks was in the field of branch expansion.

The annual rate of the growth of the deposits has varied from the high of 23% during 1993/94 to a low of 15.00. small scale industries and small retail trade accounted for only 14% of the commercial bank credit. Along with this the share of rural deposit to the total deposits developed from 3% in 1969 to above 15% presently indicating the share of rural population.02.55. The aggregate deposits of the commercial banks have gone up from rs. The new business areas includes leasing. the banks also took up externally new activities which in the earlier period were considered as foreign beyond the scope of the Indian banking. In June 1969 the priority sectors including agriculture.000 population indicating greater availability of banking facilities to the public at large. 8 offices to 1.1992 i. DAVANGERE . Undoubtedly the growth has been rapid but it is not been sufficient when compared to the average population served per bank office in developed countries which varies between 2000 and 3000 so.4636 crores in 1969 to 2.e. Expansion of Credit: Along with the deposits the flow of the total credit has also reorder the market rise.e.3599 crores in June 1969 to rs. Indian banks have still a long way to go in terms of their average and extension of banking facilities. neutral fund etc. This proportion has gone upto 37% In June 1992bbalong with the fast expansion o the branch network. Bank credit has gone up from rs.550 crores in July 1993. up by about 44 times.i.1. one of the important objectives of bank nationalization was channilise the flow of credit to the priority sectors and the banks have made the considerable progress in this direction. Expansion of activities: There has been the dimensional expansion in activities.3% in 1990/91. Deposit Mobilization: There has been rise in the rate of deposits mobilization during the last 2 decades.179 crores in 1993. Since the nationalization of the commercial banks have given up their traditional aim of maximizing profit and they have come to recognize the major instrument of development 13 BIET-MBA PROGRAMME. Since.

To security and trained staff offering the advice to small borrowers and farmers. i. To assist other primary lending agencies. and for inspection of the end use of the loan. • To examine the facilities for marketing the agriculture produce and industrial production storage and ware housing space and the linking of the credit with the marketing in this districts. who are primarily dependent on the money lenders.effort. To survey the number of commercial and industrial units and other establishments which do not have bank accounts. It has also introduced the differential interest rate scheme under which the public sector banks are giving loan at the concessional rate of interest to the weaker sections of the society. The nationalization of banks introduced the lead bank scheme under this scheme all the districts of the country are allotted to some banks or the other. • • • To survey the facilities for storing of the fertilizers and other agriculture imports and repairing and servicing of the various equipments used. The main functions of the lead bankers were: • • To survey for the resources and potential for the anking development in the district.e. DAVANGERE . who have no tangible security to offer but who can improve the economic condition through the financial assistance from the bank. Factors That Influence the Choice of Banks: Recognition: 14 BIET-MBA PROGRAMME.

This involves certain procedure for confirmation. Otherwise they have to wait in their office hours to finish off the work in the banks.The recognition of a bank institute counts a lot for the customer. The flexible hours of working in the afternoons help the office going customers to a large extent. Rapid access to the critical information and the ability to act quickly and effectively will distinguish successful banks in the future. Starting with the reconciliation of inter branch terms action and 15 BIET-MBA PROGRAMME. reputation matters a lot. While choosing financial institution and in the matter of money. At the same time banks are facing increasing competition from non banking financial corporations. Working hours: The working hours. DAVANGERE . Locker facility: The customers owing lockers at bank are provided with the facility to operate their lockers on their own. Reputation: A long customer to a particular bank helps tend to influence the new customer. convenient to the customers is one of the factors influencing the level of satisfaction of the customers in the banking industry. He feels secured with a recognized institution. Computerization: Even though the concept of computer is a new concept to the Indian banking system advances in technology are allowing delivery of banking products and services conveniently and effectively than ever before thus creating the new base of competition. the customer in general does not want to take risk in case of service of an organization. Computerization in commercial banks has indeed traveled a long way it is growing by leaps and bounds. This proves to be very helpful in times of emergency. Every time a person approaches a bank for operating the lockers it involves some time it should be seen that a customer is not have been waiting for the long time.

whole MIS reports on the selective basis. day end consolidation and accounting of transactions.. the interface to ATM is provided and supports ‘anytime’ banking with a wide range of functions like cash with drawl and deposits. information of ATM cards and so on. It allows the user to access the account information over a secure line. In an online ATM interface. To take care of posting and updating of customers accounts at the end of the day through batch processing. ATM’s can be connected either on line or off line.providing. computerization was confined to the bank head offices alone for quite sometime. demand drafts. Internet banking: Internet is another service delivery channel. statement request and message to bank. mainly as an aid to house keeping. 16 BIET-MBA PROGRAMME. In coming years it plans to allow ordering a DD. viz. transfer. ATM service can be supported to both the local and inter branch. Request for cheque books. DAVANGERE . Computers made things easy and in a satisfying manner both for the bank and for the customers. Some banks went a step further to introduce. ATM’s: ATM’s are the future banking. In the SECOND PHASE. balancing of books. Tele banking: It provides round the clock service to its customers. customers module along with bank office computerization. The customers can check on the last few transactions that have taken place online account. and renewal of deposits can be captured. computers came to the branches in the term of the branch office computerization. inquiry. request cheque books and stop payment and even transfer of funds between the accounts. even in the rural areas banks are utilizing the service of the computers. but the transition is in the first phase in this areas. It supports both online inter face and ATM network.

Credit cads: It is provided for the credit worthy customers. Users are provided with a card, on producing of which, their signature is accepted on bills in shops and establishments participating in the scheme. The banks thereby guarantee to meet the bill and recover from the card holder through a single account presented periodically. In some, users also are required to pay a regard subscription for the use of services as well. An extension of scheme allows the repayment of large sums over a period at interest.


The origins of State Bank of India date back to 1806 when the Bank of Calcutta (later called the Bank of Bengal) was established. In 1921, the Bank of Bengal and two other Presidency banks (Bank of Madras and Bank of Bombay) were amalgamated to form the Imperial Bank of India. In 1955, the controlling interest in the Imperial Bank of India was acquired by the Reserve Bank of India and the State Bank of India (SBI) came into existence by an act of Parliament as successor to the Imperial Bank of India. Today, State Bank of India (SBI) has spread its arms around the world and has a network of branches spanning all time zones. SBI's International Banking Group delivers the full range of crossborder finance solutions through its four wings - the Domestic division, the Foreign Offices division, the Foreign Department and the International Services division. The SBI was formed in 1955, through nationalization of imperial banks in India. The imperial bank of India has bee formed by the amalgamation of three existing presidency banks. With the nationalization of imperial bank in India, all its assets and liabilities were transferred to the state bank of India. It was converted into SBI on 1/07/1955 on the recommendations of the committee for All India Rural Credit Survey, headed by Shri. A.D. Gorwala (the committee recommended the establishment of one strong, integrated, state sponsored, state partnered commercial banking institution). At that time SBI had three circles, Bombay, Calcutta and Madras besides a central office at Bombay, SBI was the first bank to set up as the public sector. With a view to inculcating transparency in banking transactions and for providing information to customers, the bank launched the citizens charter in the form of the code of fair banking practices together with the general terms and conditions of service, the code reflects the bank’s commitment to provide service of the highest order and services a document of self-discipline. Appropriately named, “towards excellence”, the code is the banks tribute to its customers in the golden jubilee years of India’s independence.


The SBI has, over the years, richly verified its status as flagship of Indian banking; the bank has pioneered innovative measures and contributed significantly to the growth of the Indian economy. It has been taking new initiatives with the changing economic environment and is poised to establish itself in the new millennium as a premier Indian financial services group with a global perspective and world class standards of efficiency. The SBI’s powerful corporate banking formation deploys multiple channels to deliver integrated solutions for all financial challenges faced by the corporate universe. The Corporate Banking Group and the National Banking Group are the primary delivery channels for corporate banking products. The Corporate Banking Group consists of dedicated Strategic Business Units that cater exclusively to specific client groups or specialize in particular product clusters. Foremost among these specialized groups are the Corporate Accounts Group (CAG), focusing on the prime corporate and institutional clients of the country’s biggest business centers. The others are the Project Finance unit and the Leasing unit. The National Banking Group also delivers the entire spectrum of corporate banking products to other corporate clients, on a nationwide platform. State Bank of India is the premium commercial bank of the country and among its strengths, the following would merit attention. • The largest commercial bank in the country with branches spread all over India, besides having presents in all the time zones of the world covering several countries. • As the largest financial institution In India, SBI is well positioned to capture growth in India’s dynamic banking market and is seen as a macro economic proxy for the Indian economy. • The bank along with its non-banking subsidiaries has emerged as a financial services supermarket offering the entire gamut of financial services including investment banking, housing finance, factoring, project finance, asset management primary dealership, securities trading, credit card, gold banking, insurance, etc. The subsidies have been built into highly focused, efficient and tech-savvy organization


Agri-Business Unit. • The bank has developed an excellent in-house staff training infrastructure including a College.which works closely with the customer relationship groups in order to cross-sell products building on Group synergy. DAVANGERE . we will offer excellence in services to those abroad as much as we do those in India. Government Business Unit. an Academy an Institute for Rural Development and an institute for Information Management and Communication Technology. • Separate business units viz. MISSION: We will be prompt and proactive with our customers. Psegment business unit and SME Business unit created for focused attention to respective segments. we will go beyond the call of duty to make our customers feel valued. SBI is the only bank in India to be ranked among the top 100 banks in the world and also among the top 20 banks in Asia in the annual survey by “The Banker”. we will imbide state pf art technology to drive excellence. we will create products and services that help our customers achieve their goals. VISION AND VALUES OF STATE BANK OF INDIA VISION: My SBI: First in customer satisfaction. we will speak the language of young India. we will be in service even in the remotest part of our country. Efforts are continuously made to improve the motivation and morale of the bank’s employees through on-going training and on-site initiatives. MISSION. transparent and ethical. We will respect our customers and fellow associates we will be knowledge driven. • SBI is an excellent brand name that is synonymous with trust and security. We will learn and we will share our 20 BIET-MBA PROGRAMME. VALUES: We will always be honest.

f) One director is to be appointed by the reserve bank. The shares are held by the reserve bank. e) One of the directors to be appointed by the central government.20 crores which has been divided into 20 lakhs shares of Rs. b) Two managing directors are to be appointed by the central board with the approval of central government. we will nurture pride in India. insurance companies and the general public. No less than two of them should have special knowledge in the working of co-operative institutions and of the rural economy. d) Eight directors are to be appointed by the central government I consultation with the reserve bank to represent territorial and economic interests. We will do everything we can to contribute to the community we work in. DAVANGERE .learning. 100 each. We will never take the easy way out. c) Six directors are to be elected by the private shareholders. the break up of a central board is given below: a) A chairman and vice president are to be appointed by the central government in consultation with reserve bank. 3) Subsidiary banks: 21 BIET-MBA PROGRAMME. ORGANIZATION: The organization of the SBI can be discussed under the following heads: 1) Capital: The SBI has an authorized capital of Rs. 2) Management: The management of SBI is under the control of a central board of directors consisting of 20 members.

22 BIET-MBA PROGRAMME. during the year.2277.The state bank of India has the following six Associate Banks (ABs) with controlling interest ranging from 75% to 100%. providing value added services to clientele. DAVANGERE . The combined net profit of these banks increased by 12% over the previous year to reach Rs. 1.86% 4502 Objectives: The main objectives of state bank of India are given below. 2. In crores) Deposits Loans Investments Total Assets Return on Assets No. State Bank of Bikaner and Jaipur (SBBJ) State Bank of Hyderabad (SBH) State Bank of Indore (SBIr) State Bank of Mysore (SBM) State Bank of Patiala (SBP) State Bank of Travancore (SBT) The six ABs have a combined network of 4502 branches in India which are fully computerized and 2410 ATMs networked with SBI ATMs. 4. 6. Deposits and advances grew by 19% and 22%. 5. The combined Net NPA ratio of all ABs was at 0.61% as on 31st March 2008.69 crores. of Branches 234168 178376 75147 268285 0. 3.The highlights of performance of the six ABs for the year 2007-08 are as follows: (Rs. respectively.

It acts as the banker’s bank.e. rediscounts the bills of exchange of the commercial banks and provides remittance facilities to the commercial banks. As an agent of the reserve bank. DAVANGERE . FUNCTIONS: 1) Central Banking functions: The SBI acts as an agent of the reserve bank in all these places where the latter does not have its branches. It also acts as a clearing house for the commercial banks. 2) To encourage and mobilize the savings by operating branches in the rural and semi-urban and to promote rural credit. it collects money and makes payments on behalf of the government and manages public debt. 3) To extend financial help for the establishment of licensed warehouse and cooperative marketing societies. With the only difference that. 23 BIET-MBA PROGRAMME. unlike other commercial banks in country. It receives deposits from and gives loan to the commercial banks. The main objectives of the State Bank are: 1) To act in accordance wit the broad economic principle of the government. 2) Ordinary banking functions: The SBI performs all kind of commercial banking functions. 5) To provide remittance facilities to banking institutions. it takes into consideration and responds progressively to the small scale industries particularly in the rural areas of the country.The state bank of India has been established to operate on the normal commercial principle. 4) To provide financial help to small scale and cottage industries. the State Bank performs the following functions: • • It acts as the government bank i.

DAVANGERE . 3) Other functions: The SBI also performs the following other functions • • • • It buys and sells gold and silver It acts as agent of co operative banks It under rights issues of stocks. promissory notes.• • It receives deposits from the public It gives loans and advances against eligible securities including goods. bills of exchange. BOARD OF DIRECTORS 24 BIET-MBA PROGRAMME. It draws bill of exchange and grants letter of credit payable out of India. shares. debenture and other securities in which it is authorized to invest. immovable property or documents of title. debenture etc. fully paid share of companies.

6. Rajiv Kumar Shri Arun Ramanathan Smt.K. Salahuddin Ansari Dr.P.(Mrs.) Vasantha Bharucha Dr. 5.Central Board of state bank of India (As on 05th December 2008) Sr. 4. of SBI Act. 12. 11. Choksi Shri S. 3. Shyamala Gopinath Sec. 7. Sridharan MD & GE(A&S) Dr. Venkatachalam Dr. Shri O. Mohd. 8. Bhatt Chairman Shri S. Ashok Jhunjhunwala Shri Dileep C. DAVANGERE . No. 9. Deva Nand Balodhi Prof. Bhattacharyya MD & CC&RO Shri R. 2. 1955 19(a) 19(b) 19(b) 19(c) 19(c) 19(c) 19(d) 19(d) 19(d) 19(d) 19(e) 19(f) DEPOSITS INTRODUCTION: 25 BIET-MBA PROGRAMME. 10. Name of Director 1.

which along will ensure the steady growth and success of the bank.Deposits are the main source of funds for commercial banks. two of the chief functions of a banker are borrowing and lending of the money. but in the case of banking business. Banking is essentially a service oriented industry and unless the customers are satisfied that the banker is a friend. commerce. and he will not part with his money. which play a vital role in the economic life of the country through their assistance to trade. small scale industries. there is hardly any business on the large scale. which is carried on entirely with the funds of its proprietors. every employee should therefore take keen interest in canvassing as much of deposits as possible. The relationship between a banker and his customers is ordinary that of creditor and debtor. Bank as a Borrower: It may be safely be said that in the modern times. Hence. philosopher and guide the service in the bank is good. call for the vigorous efforts towards saving mobilization. if a banker 26 BIET-MBA PROGRAMME. industry and agriculture. The volume of deposits with the bank indicates not only the confidence the public responses in it but also its ability to assist the economic activities and growth and development in the area of operation. the borrowing is essential for the simple reason that . the expanding credit needs of the priority sectors of the economy such as agriculture. the relative positions being ascertained from the state of the account of the customer. it is of paramount interest that the banks should make continuous efforts to attract as much of deposits as possible. exports etc. Hence. DAVANGERE ..

Fixed deposit account. This is particularly true for the banks in India. the profits from lending do not form a large portion of their total profits. debentures and cash certificates. issues directives from time to time.. banks earn their part of profits from exchange. is by no means very popular with the commercial banks. he must borrow funds at the rate lower than those at which they are lend of course . 3. issuing bank notes and drawing the bills of exchange and bonds. In order to void unhealthy competition among different banks. 2. debentures and cash certificates. the higher the rate of dividend declared. the RBI has given the power to fix the deposit interest rates. The major part of their profits is earned by the employment of funds deposited with them. No bank can pay interest on deposits in excess of the rates prescribed by the RBI. Forms of Borrowings: Bankers borrow money by receiving deposits. In order to attract customers the banks offer attractive facilities to different types of deposit account holders. the RBI for this purpose. the main source of the supply of the borrowed funds is in the form of deposits. As the note issue function is generally the monopoly of the central bank of the country and the issue of bonds. in case of almost all the lending of the commercial banks. DAVANGERE . 27 BIET-MBA PROGRAMME. But. Deposit Account: Deposit account is one of the important sources of bans funds. commissions. etc. Current account.is to earn more than the mere interest on its capitalism. However the RBI in its directives provides for offering higher rates by smaller banks so as to enable them to compete with the bigger banks. It is therefore found generally that the smaller percentage of paid up capital to the deposits of a bank. Deposits schemes of SBI: 1. But in any case both the maximum and the minimum rates of interest are fixed. Savings deposits/ savings bank account.

Balance in the amount earns interest at rates advised by the reserve bank of India from time to time. account or “saving deposit account” or other account by whatever name called which is subject to the restrictions as to the number of withdrawals permitted by the branch during any specific period. Account: Savings bank account is intended for savings for the future “savings deposits” shall mean a form of demand deposit which is a deposit account whether designated “savings account” or S. This type of account is intended for the person who can save small sum of money. 10. Special term deposits. Liquid term deposits. Long term floating rate deposit scheme. Senior citizen deposit scheme. 7. allots an account number and direct the customer to fill a pay in slip and submit to the clerk for the initial account to be deposited and to remit the same to the cashier. signature card to the clerk.. 8. There are no restrictions on the number and amount of deposit that can be made on any day. 1) S. SBI gold deposit scheme.B. The bank pools the small savings of a large number of people and make them available as loans and advances to trade. Opening and operation of savings bank account: The customer gives the filled savings bank opening form.B. The bank receives a large volume of m0oney through savings bank account from a wide range of people. 6. The cashier accepts the cash and sends back the pay in slip to the clerk. photograph and specimen. The clerk posts all the details in the register and prepares a pass book and cheque book which are sent to the officer for the final 28 BIET-MBA PROGRAMME. 11. Saving plus. Multi-option deposit scheme. industry etc. 9.4. Recurring deposit account. 5. The clerk verifies all the details and if in order. DAVANGERE . The facility for the withdrawal by the cheque is also allowed subject to certain restrictions.

In case deposit is by cheque.a. Then the amount is entered in the savings bank ledger and pass book is also updated. frequent withdrawals are not allowed and interest is generally allowed on the monthly balance. Rate of interest: 3.perusal and approval the pass book and cheque book is then handed over to the account holder. Usually the banks allow the cheque facility in case if the depositor maintains a minimum balance in his account. The cashier accepts the cash and entry is made in cash receipt book then the pass book and pay in slip is passed onto the clerk. Closing: The customer must give the closing letter. the clerk enters the amount in the ledger. The cashier pays the cash and the amount paid is entered in cash payment book. The pass book and all the balance cheque leaves to the clerk. supervisor check the entries made in the ledger and officer initializes in the pay in slip and the ledger folio that the withdrawal is conformed. When an account holder wishes to withdraw money by cheque he needs to present only the cheque leaf. the pass book is updated. The clerk calculates the remaining amount in customers account. the deposits can either by the cheque or by cash to the cashier. DAVANGERE . He asks the customer to fill a withdrawal form or a cheque leaf to take back the remaining amount. the cheque is sent for collection and the procedure is completed on realization. Withdrawal: The account holder gives the pass book and the withdrawal form to the clerk. Deposit: The deposits are mostly for small accounts and are accepted by the banks to encourage persons of small means to make savings. the officer checks the pay in slips and the ledger entry and finally gives the pass book to the account holder.50% p. enters the amount in the cash register. the amount is posted in the ledger and the pass book is updated and the ledger is 29 BIET-MBA PROGRAMME.

the banker also takes the specimen signature of the depositors. Opening and operation of fixed deposit account: The depositor has fill in an application form where he mentions the amount of deposits. A fixed deposit receipt is then issued to the depositor acknowledging receipt of the sum of money mentioned there in. the banker also takes the instructions regarding payment of money on maturity of deposit. Here there is no restriction on the number of withdrawals.checked by the officer for approval. 3) Fixed deposit account: A fixed deposit account is one. He marks that particular account number is terminated and so on and so date. which is subject to the variation from Rs.1000 to Rs. the period for which the deposit is to be made and the name/ names in which the fixed deposit receipt is to be issued. which is accepted for a specified period. the bank does not pay any interest on current account. The larger the period higher the rate of interest. i. Any amount may be deposited to this account and withdrawn from this account. the deposits are accepted for the period ranging from 14 days to 5 years or more. whether payable jointly to either or survivor etc. A customer is not permitted to withdraw the amount before the expiry of the fixed period. Payment of interest: 30 BIET-MBA PROGRAMME. It also contains the rate of interest and date on which the deposit will fall due for payment. DAVANGERE . In case of the deposits in joint names. 2) Current Account: A customer can open a current account by making an initial deposit.e. The rate of interest is higher depending upon the period of deposit.10000 the bank opens the account only after making enquiry about the financial position of the customer. and this type of account is suitable for traders and businessman.

4) Recurring deposit account: Recurring deposit accounts are meant for the people who have regular monthly income and are intended to encourage the habit of savings among the depositors on regular basis. the payment of the amount due under the receipt/duplicate receipt can be obtained from the bank by filling in an indemnity bond. whereby the customer gets the benefit of compound interest.It is usually paid on the maturity of the fixed deposit. In case of recurring deposit account. DAVANGERE . The interest to his fixed deposit account every quarter earns further interest in the subsequent period. the banker credits the amount of interest to the customer savings or current accounts at his request. Lost of fixed deposit receipt: In the event of a fixed deposit receipt lost. 5) Money box deposits: 31 BIET-MBA PROGRAMME. These days’ banks have stated a normal scheme of investment plans. Cheques against the fixed deposit: No cheques can be drawn against a fixed deposit in the absence of any agreement the position holds good even in cases where the deposits has matured unless the customer makes such arrangement or gives instruction to the bank to transfer the amount to his savings or current bank account. The bank should make a note of this fact on the fixed deposit ledger for further guidance. the bank may pay the interest to the depositor every 3 or 6 months. But. and the total amount with the interest is paid to him on the maturity of the deposit. the depositors deposit a fixed sum of money for an agreed period and at the end of the specified period he will get back the amount deposited together with the interest accrued thereafter.

Partial withdrawals are permitted and the interest rate as applicable will be paid while the balance amount continues to earn at the contracted rate of interest. Now the gold which is kept idle with the customers can now earn the interest. The salient features of the scheme are: • • • • • • Gold is accepted in the form of bar/jewellery or coin form. The other features of the deposit are as applicable as in the case of recurring deposit account.The amount of the deposit is flexible. 7) SBI gold deposit scheme: SBI accepts the gold for deposits. Liquidating facility of loan in rupees against gold deposits. four or five years. three. Minimum quantity: . Type of deposit: 32 BIET-MBA PROGRAMME. 8) Multi option deposit scheme: Purpose: To provide the liquidity to term deposits and a host of other convenient facilities. it can be opened in single or joint names. Core amounts of Rs.1500 the period of deposits can be one. 6) Liquid term deposits: The amount of the deposit has to be in multiples of Rs. non residents.100 with the minimum amount being Rs.200gms gross. Transferable by endorsement or delivery. two. Maturity period 3 to 7 years. Eligibility: Individuals including the minors of age 10 years and above. Option with the depositors of cash repayment. DAVANGERE .1000 can be chosen with the option of depositing ten times the core amount.

b) Savings bank cheques for withdrawing the amount it need not be in the multiples of Rs. 10000 and above in multiples of Rs.The facility can be obtained in case of term deposit in conjunction with savings bank or current account.1000.1000 through savings bank account without attracting any penal rate of interest. Overdraft: The facility of overdraft in current account is permissible at normal rate of interest for overdraft against term deposits. which are published from time to time. b) Rs. c) The remaining amount in the multi option deposit will continue to earn interest at contracted rate Deposit receipt/pass book: 33 BIET-MBA PROGRAMME. c) Minimum balance of Rs.5000 and above in multiples of Rs. Withdrawal: The facility of withdrawals is permissible: a) In units of Rs. DAVANGERE .1000 to be maintained in savings bank in addition to deposit placed under multi option deposit scheme.1000 for new accounts. STDR. Period of deposit: 1 to 5 years Amount of deposit: a) Rs. Rate of interest: As applicable in terms of interest rate structure for TDR.1000 for subsequent deposits.

An acknowledgment of deposit will be issued as record of deposit. e) Pension funds. 2) Safe custody facility available at free of cost. 34 BIET-MBA PROGRAMME. b) Hindu undivided family. 9) Long term floating rate deposit scheme: Purpose: To provide the depositor an option to invest in long term maturity but at a floating rate of interest so that the customer can have a long term portfolio with an opportunity to to gain in any upward movement in interest rates. f) Insurance companies. 4) Nomination facility available on all accounts. DAVANGERE . Passbook: A statement showing value of deposit including the accrued interest would also be issued quarterly. Who can deposit: The following segment of customers can subscribe to the scheme: a) An individual or more than one individual in the form of ‘Former or Survivor’ or either or any of the survivor or by any natural / legal guardian on behalf of a minor child. Other facilities/features: 1) Extension of maturity is permitted. c) Trust. 3) Accounts can be closed pre maturely on request as per rules. 5) The application form filled in and signed by the depositor contains all the clauses to Facilitate availing of overdraft or withdrawal facility thereby saving the depositors from the trouble of visiting the branches for this purpose. d) Company/firm.

h) Non resident Indians. upward or downward. Transferability: The deposit receipt will not be transferable. Nomination facility: Available in case of individuals only and not for joint accounts and other depositors like HUF. DAVANGERE . 50 basis point above base rate for deposit for 10 years. Tax treatment: The interest earned under the long term floating rate deposit scheme will be subject to the provision of income tax rules related to the tax deduction at source. company/firm etc. Rate of interest: 1) The rate of interest for a deposit of 3 years and above will be the base rate and be automatically applicable. i) Regional rural banks. 4) The float in interest rates can be either way i. Tenure: The tenure of the deposit will be 8 years or 10 years.e.. trust.g) Pensioners. The interest applicable will be • • 25 basis point above base rate for deposit for 8 years. 3) Calculation of interest will be done on the simple interest basis. (Any change in the differential specified above the base rate will not be applicable to the existing deposits) 2) The depositor will be paid interest at quarterly intervals from the date of issue of deposit certificate. Joint account facility is available only for individuals. 35 BIET-MBA PROGRAMME.

e. Premature withdrawal: Permitted subject to certain conditions. Eligible applications: Senior citizens i.10000 and thereafter in the multiples of Rs. Minimum amount of Rs. residents with age of 60 years or above on the date of acceptance of deposit.Loans and advances: The depositors may avail rupee loans against the security of their deposits in accordance with the applicable guidelines as in the case of banks other fixed deposit receipts.1000. Tenure of deposit: 1 year or above. Proof of age: 36 BIET-MBA PROGRAMME. DAVANGERE . 10) Senior citizen deposit scheme: Purpose: To provide a term deposit scheme with the differential rate to senior citizens. Rate of interest: Deposits for 1 year up to less than 3 years 1% above the applicable rate of interest. Deposit for 3 years and above 0.75% above the applicable rate of interest. Type of deposit: Term deposit/special term deposit.

In the absence of a specific option. DAVANGERE .25 (at present) would apply in each instance except where the threshold balance of the customer Is Rs. The threshold amount would necessarily have to exceed Rs. A nominal charge of Rs. 11) Savings plus: Purpose: To provide an automatic facility to high net worth savings bank customers for their excess funds in savings bank account to be invested in term deposits on an ongoing basis. and 36 months only.10000 the customer has to choose a threshold amount beyond which the system would create the fixed deposits.Passport/ pension payment order/ school leaving certificate/ voter identity card/ driving license/ life insurance policy/ ration card/ age certificate issued by village sarpanch or chief medical officer of the district. Minimum balance in the account Rs. depending on availability of funds over the chosen pre fixed threshold limit.10000 ( and in multiples of Rs. The customer would be free to change both the threshold balance as well as the maturity period of the TDR’s’/ STDR’s at any time. All TDR’s/ STDR’s will be 0pened for maturities of 6. Eligibility: Individuals including minors aged 10 years and above and NRI’s in single or in joint names. TDR’s / STDR’s will be automatically opened for a minimum amount of Rs.1000) in any one instant.25000 or more. the deposits will be opened for 6 months by default. Rate of interest: 37 BIET-MBA PROGRAMME. 12.10000. The interest or the maturity proceeds of term deposit will only be credited to the linked savings plus accounts. For savings plus accounts the usual savings bank passbook will be issued. 24.

25 8.50 2 years to less than 1000 days 9.25 5.f Revised rate w.50 7. Interest rate for deposits of Rs.e.e.50 4.50 An overdraft limit or a demand loan facility is not available.2009 4.50 38 BIET-MBA PROGRAMME.12.00 1000 days 10.75 8.50 8.e.00 181 days to less than 1 year 8.a.75 9.00 1001 days to less than 3 years 9.00 1 year to less than 2 years 9.25 91 days to 180 days 7.50 4.75 4.00 3 years to less than 5 years 9.25 5 years and up to 10 years 9. One Crore (% p.f 01.00 8.75 1-1-2009 3.25 6.2008 15 days to 45 days 4.Interest on balances in savings plus accounts will be same as applicable to savings bank account and will calculated and applied in the same manner. w.25 4. 1 Crore and above.01.) Duration Existing Rates Revised Rates w.50 8. One crore and above Duration Existing rates w. DAVANGERE .e.75 46 days to 90 days 5. Loan facility: Interest rates: Interest Rates for Deposits below Rs.00 Note: Term deposits for maturity period of "7 days to 14 days" will continue to be accepted for amounts of Rs.f 7 days to 14 days 15 days to 30 days 31 to 45 days 29-11-2008 3.f 01.

25 8.50 7. DAVANGERE .00 8.75 8.00% below the rate applicable for the period deposit has remained with the Bank.50 Premature Payment of Term Deposits: Interest to be paid on premature withdrawal of term deposits at 1.50 9. MCC Block Davangere.25 7.00 7.00 9. Statement of the problem: 39 BIET-MBA PROGRAMME.50 8. STATEMENT OF THE PROBLEM Title of the Project: Analysis of bank deposits performance with reference to SBI.46 to 90 days 91 to 180 days 181 days to 270 days 271 days to less than 1 year One Year & above 7.

This is more so when RBI is trying to leave the interest rates to be determined by the market force as against the earlier years. the profitability or the margin of the banks will always be under pressure. How best the deposit portfolio of the bank is structured.The study is basically concerned to the following statements and these statements are the part of the main statements “Analysis performance of the deposits with reference to SBI” • • Unless the said problems are addressed to the banks. People take the facilities provided by the Bank and some of customers become the main defaulters against their loans. annual reports and dairies regarding the bank profile about the deposits. where RBI used to regulate the interest rates etc. Scope of the study The study is applicable only to the SBI MCC Block in Davangere city the study is concerned about the type of deposits in SBI Bank and the rules and procedures followed by the Bank. DAVANGERE . this area requires to be continuously reinvented by innovative methods. So deposits are very important aspect now a day. Methodology A discussion was made with the branch manager about the type of deposits. The information was collected from the bank records. analytical books. To know the staff member and bank performance with regard to deposits. Source of the data: 40 BIET-MBA PROGRAMME. journals were used for conceptualization. Objectives of the study: • • • Analysis of the existing deposit schemes of the bank To study the procedure and rules of the deposits. periodicals. brouchers. Davangere is a city which is famous for the commercial activities.

The study is based on the information obtained from the bank officials. DAVANGERE . The study is limited to the MCC Branch of Davangere.Primary data: Primary source of data includes interaction with officials of the bank. 2. ANALYSIS AND INTERPRETATION 1) Trend analysis of saving bank account Year March 07 March 08 Amount in Lakhs 684. Limitations of the study: 1.00 863. manual books and bank dairy.42 41 BIET-MBA PROGRAMME. The period of study is limited. Secondary data: Secondary source of the data includes bank annual reports. 3.

684. The total amount of SB deposits has been increased by 26% 42 BIET-MBA PROGRAMME.Amount in Lakhs 863. there has been growth of Rs. it has been increased to Rs.42 – Rs. 179.42 Lakhs. Therefore.42 684 = 26.23 30 25 Percentage 20 15 10 5 0 1 Series1 Interpretation It would be interpreted that.00 = Rs.42 lakhs.42 900 800 700 600 500 400 300 200 100 0 684 March 2007 March 2008 Amount M arch 2007 Year March 2008 Calculation of percentage growth from the last year Rs. 863.00 lakhs and in March 2008. 684. 179. 863. In March 2007 the total amount of SB deposits were Rs. DAVANGERE .40 ∴ Percentage of growth = 179.23 _ 26% ∼ 26.

2) Current A/c Year March 07 March 08 Amount in Lakhs 92.32 90 = 89. 170.00 = Rs.32 Amount in Lakhs 180 160 140 120 Amount 100 80 60 40 20 0 March 2007 Year March 2008 92 170.00 170. DAVANGERE .32 ∴ Percentage of growth = 80.32 March 2007 March 2008 Calculation of percentage growth from the last year Rs. 90. 80.24% _ 89% ∼ 43 BIET-MBA PROGRAMME.32 – Rs.

There has been growth of Rs.32 Lakhs in current account deposits.32 lakhs in 2008. It could be interpreted that there has been the growth of 89% over the last year.80.00 lakhs which has been increased to Rs. 90.32 90 80 70 60 1 Amount 50 40 30 20 10 0 1 Growth Interpretation The total amount of account deposits in 2007 was Rs. DAVANGERE . 44 BIET-MBA PROGRAMME. 170. 80.

3) Term deposits Year March 07 March 08 Amount in Lakhs 64 593. 529.24 Am ountin L akhs 64 March 2007 593. 593.24 ∴ Percentage of growth = 529.24 64 = 826. 64 = Rs.24 – Rs.24 March 2008 Calculation of percentage growth Rs. DAVANGERE .93% _ 827% ∼ 45 BIET-MBA PROGRAMME.

24 Lakhs in March 2008.00 lakhs.24 lakhs.826. 593. The total amount of term deposits has been increased by 827% 46 BIET-MBA PROGRAMME. It has been increased to Rs. DAVANGERE . 64. 529.93 900 800 700 600 Amount 500 400 300 200 100 0 1 Growth Interpretation It would be interpreted that the total amount of term deposits in 2007 was Rs. There has been the increase of Rs.

10 Amount in Lakhs 636. 636. 177.4 ) Special term deposits Year March 07 March 08 Amount in Lakhs 459.459.58% _ 39% ∼ 47 BIET-MBA PROGRAMME.10 ∴ Percentage of growth = 177.00 = Rs. DAVANGERE .00 636.10 – Rs.1 700 600 500 400 300 200 100 0 March 2007 March 2008 459 March 2007 March 2008 Calculation of percentage growth Rs.00 = 38.10 459.

636. 177.00 lakhs which has been increased to Rs. DAVANGERE .39 40 35 30 Percentage 25 20 15 10 5 0 1 Series1 Interpretation It would be interpreted that the total amount of special term deposits in march 2007 was Rs.10 lakhs There has been the growth of 39% in special term deposits. There has been increase of Rs. 459.10 lakhs in march 2008. 48 BIET-MBA PROGRAMME.

19 3. DAVANGERE .5) Other term deposits Year March 07 March 08 Amount in Lakhs 7 Amount in Lakhs 7.81 7 6 3.19 ∴ Percentage of growth = 3.81 – Rs.00 = Rs. 3.73% _ 84% ∼ 49 BIET-MBA PROGRAMME.81 5 Amount 4 3 2 1 0 March 2007 March 2008 March 2007 March 2008 Calculation of percentage growth Rs.00 3. 3.81 = 83.7.

84 90 80 70 60 Percentage 50 40 30 20 10 0 1 Series1 Interpretation The total amount of other term deposits i.. 50 BIET-MBA PROGRAMME. recurring deposits in March 2007 were Rs. DAVANGERE . 7. 3.00 Lakhs which has been decreased to Rs. Therefore.e.19 lakhs. 3. There has been the decrease in the total deposits by Rs. it would be interpreted that there has been the decrease of other term deposits by 84%.81 lakhs in March 2008.

DAVANGERE .08 lakhs ∴ Percentage of growth = 1338.00 = Rs.00 = 102.6) Comparative analysis of deposits of SBI (MCC BLOCK) Year March 07 March 08 Amount in Lakhs 1306. 2644.46% _102% ∼ 51 BIET-MBA PROGRAMME.00 2644.08 – Rs.08 3000 2500 2000 Amount 1500 1000 500 0 March 2007 March 2008 1306 March 2007 March 2008 Calculation of percentage growth Rs.08 1306. 1338.08 Amount in Lakhs 2644.306.

B. current. It would be interpreted that there has been the growth of total deposits by 102% 52 BIET-MBA PROGRAMME. 1338.08 lakhs. 1306 lakhs which has been increased to Rs. special TD’S other deposits in march 2007 was Rs.102 120 100 80 Percentage Series1 60 40 20 0 1 Interpretation It would be interpreted that the total deposits i.e.08 lakhs. The aggregate of S. DAVANGERE . There has been the growth of deposits by Rs. 2664.

85 – Rs. 37. 82.38 March 2007 March 2008 Calculation of percentage growth Rs. DAVANGERE .85 90 80 70 60 Amount 50 40 30 20 10 0 March 2007 March 2008 45.38 = Rs.45.56 _83% ∼ 53 BIET-MBA PROGRAMME.47 45.38 = 82.38 82.7) Profits Year March 07 March 08 Amount in Lakhs 45.47 lakhs ∴ Percentage of growth = 37.85 Amount in Lakhs 82.

DAVANGERE .47 lakhs It would be interpreted that the total profits has been increased by 83% over the last year.83 90 80 70 60 Percentage 50 40 30 20 10 0 1 Series1 Interpretation The total profits has been increased by Rs. 37. 54 BIET-MBA PROGRAMME.

REASONS FOR THE GROWTH OF DEPOSITS: Deposits are the main source of funds for commercial banks. DAVANGERE . 4) Availability of various schemes: The banks provide various schemes such as current a/c. The Bank offers a variety of products to cater 5) Growth in banking sector: There has been tremendous growth in the banking sector in the recent years the banks have now reached even the remotest part of the country and have been functioning effectively. It has 6 affiliates and It has been functioning with 5000 branches and 5542 ATM’s all over the country. which play a vital role in the economic life of the country through their assistance to trade. commerce. 3) Attractive rates of interest: Banks offer attractive rates of interest on their various deposits. to all sections of society. 2) Safety: The deposits in the banks are considered to be safer as they are owned by the Government. 55 BIET-MBA PROGRAMME. The rate of default of the repayment of the principle and interest is very low in case of the nationalized banks. This interest Rates are reviewed periodically according to the market conditions and are subject to the regulations of RBI. businessman etc. industry and agriculture the reasons for the growth of deposits in the recent years are: 1) Good Name: The SBI is one of the most trusted banks in the country. special term deposits etc to meet the needs of the varied people such as senior citizens.

On-line channel enables customers to access their account information and initiate transactions on a 24*7. boundary less basis. 56 BIET-MBA PROGRAMME. DAVANGERE .6) Volatility in the stock market: The stock market is very volatile and due to the concern of the safety of the principle by the depositors they prefer bank deposits as they are the safest and they provide the normal rate of interest. with the help of internet banking most of the transactions can be done without actually visiting the bank premises. 3308 branches are extending INB service to their Cash and Clearing has been extended to individual retail customers. 8) Internet banking: Today the customers can open their account with fewer difficulties and can operate easily. 7) Faith: The customers have great amount of confidence and trust in case of their principle amount and interest in case of bank deposits and they are ready to part with their money even at the lower rate of interest basically for the purpose of safety.

• It would be interpreted that the total amount of term deposits in 2007 was Rs. The aggregate of S.e. 177. 80. it would be interpreted that there has been the decrease of other term deposits by 84%. It would be interpreted that there has been the growth of total deposits by 102% 57 BIET-MBA PROGRAMME.00 lakhs which has been increased to Rs. 7. • The total amount of other term deposits i. it has been increased to Rs.00 lakhs and in March 2008. there has been growth of Rs. 1338.B. There has been the increase of Rs. recurring deposits in March 2007 were Rs. Therefore.32 lakhs in 2008. There has been the growth of deposits by Rs.24 lakhs. 90.00 lakhs. In March 2007 the total amount of SB deposits were Rs.81 lakhs in March 2008.e.. There has been increase of Rs. The total amount of SB deposits has been increased by 26% • The total amount of current account deposits in 2007 was Rs. special TD’S and other deposits in march 2007 was Rs. There has been growth of Rs. term.00 Lakhs which has been decreased to Rs. There has been the decrease in the total deposits by Rs. current. DAVANGERE . 1306 lakhs which has been increased to Rs.08 lakhs. • It would be interpreted that the total deposits i. 863.10 lakhs in March 2008.24 Lakhs in March 2008.FINDINGS • It would be interpreted that.10 lakhs There has been the growth of 39% in special term deposits. 3. The total amount of term deposits has been increased by 827% • It would be interpreted that the total amount of special term deposits in March 2007 was Rs. Therefore. 170. 179. It has been increased to Rs.08 lakhs. 3. 64.42 lakhs.00 lakhs which has been increased to Rs. 636.42 Lakhs. 2664. 459. 529. 593.19 lakhs. It could be interpreted that there has been the growth of 89% over the last year.32 Lakhs in current account deposits. 684.

83 lakhs in 2008 and there has been the tremendous increase in case of term deposits. the deposits in 2007 were Rs.SUGGESTIONS: The SBI MCC BLOCK was established in the year 15-10-1992.2286 lakhs and Rs.46 lakhs which has increased to Rs. Some of the suggestions with regard to the study conducted to the SBI MCC Branch Davangere are: • • • Bank should take the measure to create the awareness about the types of deposits in the bank and must introduce the other type of deposits.1306 lakhs and profits were Rs. 58 BIET-MBA PROGRAMME.000 with the total staff strength of 10 employees.e. As the other term deposits shows the decreasing trend the bank must take the keen interest regarding other term deposits. it covers the area which has a population of 6.20. The bank must focus on the potential customers. DAVANGERE . The branch has been functioning effectively the deposits and the growth of profits ahs been increased in 2008 as compared to the year 2007 i.

it takes into consideration and responds progressively to the small scale industry particularly in the rural areas of the country. It has been taking new initiatives with the changing economic environment and is poised to establish itself in the new millennium as a premier Indian financial services group with a global perspective and world class standards of efficiency.CONCLUSION As finance student I would like to conclude that the State Bank of India maintains the stability of all deposits to enhance the substantial growth. The SBI is an largest commercial bank in the country and operates effectively even in the remotest part of the country with the help of its various fellow bankers and has different schemes of deposits to meet the varied needs of the customers through the 5000 branches and ATM’s all over the country. over the years. industry etc. the bank has pioneered innovative measures and contributed significantly to the growth of the Indian economy. The State Bank of India has been established to operate on the normal commercial principle. richly verified its status as flagship of Indian banking. With the only difference that. DAVANGERE . It creates the pools together the small savings of a large number of people and makes them available as loans and advances to trade. The SBI has. finance for land mortgage and ware housing finance. 59 BIET-MBA PROGRAMME. The SBI gives assistance to various co-operative sector and allied institutions in the form of general facilities. finance for marketing and processing. unlike other commercial banks in country.


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