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An effort has been made to understand in detail about CORPORATE BANKING. The Corporate banking services has been taken as an example to for the very same reasons. Corporate banking focuses on offering a full range of services to multinationals, large domestic corporate and institutional clients. The need for Corporate Banking services in the present era are not only required by today’s corporate world but also play a very important component as a part of a commercial bank’s services.
TABLE OF CONTENTS Serial No. 1. 2. 3. 4. 5. 6. Contents Corporate Banking State bank of India –History Services of State Bank of India SBI – Corporate Banking Specialised Products Conclusion and Recommendations Page No.
Corporate banking, also called corporate financing, is a specialized branch of finance that deals specifically with corporations and their needs. The job of a corporate banker is to enhance the corporate value of the company--its overall worth, not just income--and to make sure that financial risks are minimal. Managerial finance, which deals with the financial needs of all firms, is a similar but more generalized field. Function A corporate banker or financier is expected to make a variety of long-term and short-term decisions regarding the corporation's financial future. Most short-term decisions involve dealing with cash flow, managing inventory and general questions of credit and debt. Long-term decisions that a corporate banker would be responsible for involve what investments the company will make and what dividends would be paid out to shareholders. Some corporations use specialized investment bankers to design their investment portfolios and raise appropriate capital. Types The various short-term responsibilities of a corporate banker can be grouped together under the heading of "working capital." This involves managing working capital and deciding how to handle the corporation's short-term finances. Meanwhile, the long-term responsibilities can be gathered together under the heading of "capital investment," which involves making decisions related to the corporation's fixed assets and capital structure. Benefits A corporation deals with significantly larger sums of money than individuals or smaller firms, and as a result there are a number of specialized tools and analysis disciplines that have evolved to deal solely with the needs of corporations. Many of these disciplines have limited use outside of the corporate field. Therefore it is a clear benefit to the firm to have someone who is familiar with those tools. Theories/Speculation Risk management is a process that involves measuring what risks the corporation has to take and how to minimize them. Many large firms will have their own risk management teams, but since most financial risk a business is exposed to is a result of corporate financial decisions, it is important for a corporate banker to be familiar with the discipline.
Difference Between Corporate & Investment Banking Corporate & Investment banking is a term used to describe a range of banking and investment products and services delivered to corporate clients, financial institutions, governments, agencies and, in some cases, to wealthy or ‘high-net-worth’ individuals and families. Investment banking includes the development, marketing and trading of a large range of securities and other financial instruments on the world’s financial markets. These include equities, which are stocks or shares, commodities, fixed income or bonds, and currencies. All of these, which are known as ‘asset classes’, can be traded directly or by using derivative instruments such as futures, options and swaps. These instruments can help clients manage their risks and also provide investment opportunities. Contrary to common misconceptions, investment banking does not only encompass capital market activities. It also includes research into macro-economic trends and effects, and detailed analyses of the performance and factors affecting specific industry sectors and individual companies. In addition, investment banking traditionally includes the research and advisory services that banks offer to its clients for their major transactions such as mergers & acquisitions and initial or secondary offerings of their shares. Corporate banking on the other hand is defined as those products and services that relate to the lending activities between a bank and its clients. This could be a simple secured or unsecured loan, or it could be a highly sophisticated structured finance transaction with many different banks or syndicates involved in the transaction. Cash management and trade finance also fall under the definition of corporate banking. To explain corporate banking in a better manner, I have studied all the services rendered by the State Bank of India in detail.
SBI was the acquirer as its affiliate. SBI acquired the Bank of Cochin in Kerala. the State Bank of Travancore. which is India's central bank. Five years later. The bank had been the Dukan Pichadi. a small moneylender. owned by the Maharaja. 1911). The new banks first manager was Jall N.STATE BANK OF INDIA -HISTORY The roots of the State Bank of India lie in the first decade of 19th century. together with its 28 branches. which had 24 branches. In 1985. was established on 2 June 1806. which made eight state banks associates of SBI. already had an extensive network in Kerala . SBI acquired Krishnaram Baldeo Bank. a right they retained until the formation of the Reserve Bank of India. and the re-organized banking entity took as its name Imperial Bank of India. the other two being the Bank of Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July 1843). The next year SBI acquired National Bank of Lahore (est. acquired a controlling interest in the Imperial Bank of India. the Imperial Bank of India became the State Bank of India. The Imperial Bank of India remained a joint stock company. The first was the Bank of Behar (est. On 30 April 1955. All three Presidency banks were incorporated as joint stock companies and were the result of the royal charters. which had 120 branches. in 1975. when the Bank of Calcutta. which had been established in 1916 in Gwalior State. The Presidency banks amalgamated on 27 January 1921. which SBI acquired in 1969. a Parsi. These three banks received the exclusive right to issue paper currency in 1861 with the Paper Currency Act. SBI has acquired local banks in rescues. later renamed the Bank of Bengal. In 1959. 1942). under the patronage of Maharaja Madho Rao Scindia. Pursuant to the provisions of the State Bank of India Act of 1955. Broacha. when the State Bank of Saurashtra merged with SBI. A process of consolidation began on 13 September 2008. The Bank of Bengal was one of three Presidency banks. the Reserve Bank of India. the government passed the State Bank of India (Subsidiary Banks) Act. The government of India recently acquired the Reserve Bank of India's stake in SBI so as to remove any conflict of interest because the RBI is the country's banking regulatory authority.
looking at the vast untapped potential in the hinterland and proposes to cover 100. number of branches. The Bank is forging ahead with cutting edge technology and innovative new banking models. Point of Sale Merchant Acquisition. market capitalization and profits is today going through a momentous phase of Change and Transformation – the two hundred year old Public sector behemoth is today stirring out of its Public Sector legacy and moving with an agility to give the Private and Foreign Banks a run for their money. to expand its Rural Banking base. . It is the only Indian bank to feature in the Fortune 500 list. The bank is entering into many new businesses with strategic tie ups – Pension Funds. Advisory Services. on whole sale banking capabilities to provide India’s growing mid / large Corporate with a complete array of products and services. Private Equity. Mobile Banking.Transformation Journey In State Bank Of India The State Bank of India. General Insurance. It is also focusing at the top end of the market. the country’s oldest Bank and a premier in terms of balance sheet size. structured products etc – each one of these initiatives having a huge potential for growth. Today. It is consolidating its global treasury operations and entering into structured products and derivative instruments.000 villages in the next two years. Custodial Services. the Bank is the largest provider of infrastructure debt and the largest arranger of external commercial borrowings in the country.
. O. It presently has 173 foreign offices in 33 countries across the globe. SBI Factors. The Bank is also in the process of providing complete payment solution to its clientele with its over 21000 ATMs. etc. Network 18 recognized this momentous transformation journey. and has awarded the prestigious Indian of the Year – Business. The bank is also looking at opportunities to grow in size in India as well as internationally. It has also 7 Subsidiaries in India – SBI Capital Markets. SBI DFHI. the Bank is also attempting to change old mindsets. The CNN IBN. Mr. Throughout all this change. With about 8500 of its own 10000 branches and another 5100 branches of its Associate Banks already networked.The Bank is changing outdated front and back end processes to modern customer friendly processes to help improve the total customer experience. attitudes and take all employees together on this exciting road to Transformation. Some of the training programmes are attended by bankers from banks in other countries. With four national level Apex Training Colleges and 54 learning Centres spread all over the country the Bank is continuously engaged in skill enhancement of its employees. In a recently concluded mass internal communication programme termed ‘Parivartan’ the Bank rolled out over 3300 two day workshops across the country and covered over 130. debit cards. to drive home the message of Change and inclusiveness. SBI Life and SBI Cards . mobile banking.forming a formidable group in the Indian Banking scenario. the State Bank of India is undertaking. Bhatt in January 2008. today it offers the largest banking network to the Indian customer. The workshops fired the imagination of the employees with some other banks in India as well as other Public Sector Organizations seeking to emulate the programme. to its Chairman. P. It is in the process of raising capital for its growth and also consolidating its various holdings.000 employees in a period of 100 days using about 400 Trainers. SBICAP Securities. and other electronic channels such as Internet banking.
Correspondent Banking relations with 475 global banks and tie up with 26 Exchange Houses and 5 Banks across Middle East. Mutual Funds and Insurance. Their branches have covered a whole gamut of agricultural activities like crop production . digging of . SBI Term Deposits SBI Loan For Pensioners SBI Recurring Deposits Loan Against Mortgage Of Property SBI Housing Loan Loan Against Shares & Debentures SBI Car Loan Rent Plus Scheme SBI Educational Loan Medi-Plus Scheme SBI Personal Loan Rates Of Interest NRI Services State Bank of India is the bank of choice for Indians wherever they live. Apart from the branches. horticulture . They are the leaders in agri finance in the country with a portfolio of Rs. The product suite for NRIs ranges from Bank Deposits. NRIs can enjoy “anywhere – anytime” banking facilities. 53 dedicated NRI Branches in India. Loans and Remittances to Investments. Online Equity Trading.000 crs in agri advances covering around 80 lac accounts.SERVICES OF SBI Personal Banking State Bank of India offers a wide range of services in the Personal Banking Segment which are indexed here.500 domestic branches. Structured Products. Agricultural Products State Bank of India Caters to the needs of agriculturists and landless agricultural labourers through a network of 8750 rural and semi-urban branches. 173 Foreign Offices in 34 countries. land development and reclamation. 64. plantation crops. The products are designed with flexibility to suit personal requirements. farm mechanization. With its vast network of over 14. there are 428 Agricultural Development Branches (ADBs) which also cater to agriculturists.
Considering that agriculture would continue to be significant driver of Indian economy. rural business is associated with agriculture and allied activities. seed processing industry. and special initiatives. Reduce NPA levels in Agriculture. Focus on micro finance and SHG opportunities (now part of non-farm sector in Rural Business). food processing industry.. tube wells and irrigation projects. Advances are given to borrowers for very small activities covering poorest of the poor to hi-tech activities involving large fund outlays. It also focuses on Agri related SME including setting up of Rice and Dhal mills. processing of agri-products. Achieving 18% target under agricultural advances as required under priority sector norms. investment credit. To give special focus to agriculture lending Bank has also appointed agri specialists in various disciplines to handle projects/ guide farmers in their agri ventures. as may be necessary. forestry. fisheries. etc. renewed focus on infrastructure development. Focus on product development and management. with a view to bridge the urban and rural divide. finance to agri-input dealers. etc.wells. agro-processing and agroexport zones. other high value agriculture segments like horticulture. the trickledown effect of economic growth. piggery and rearing of silk worms. . Focus on Key Corporate and Institutional relationships in agriculture. floriculture & food processing etc. and employment generation in rural areas have led to huge investment by the Government in rural India. construction of cold storages and godowns. sheep-goat. Now we are setting up Agri Commercial Branches (ACBs) which will handle high value agri financing involving large investments. a separate Agri Business Unit (ABU) with a distinct organizational structure has been set up in the Bank and under noted objectives has been created in 2004: Providing focused attention on the banking requirements of the agriculture segment. allied activities like dairy. with the possibilities of rapid growth in emerging areas like contract farming. Traditionally. large and small scale dairy units. poultry. Make agriculture a commercial proposition. Of late however. It envisages lending through corporate partnerships and other large enterprises for commodity financing. emerging opportunities.
RRBs & Lead Bank Department. Indian banks and corporates are able to avail single-window Euro services from the Bank's Frankfurt branch. Product Development and Marketing. Partnership firms . organizing promotional events and for loan sanction. processing. medium and small customers both domestic and international. Monitoring and Market Intelligence. Paris and Frankfurt. short-term financing. International Banking International banking services of State Bank of India are delivered for the benefit of its Indian customers. Corporate Banking SBI is a one shop providing financial products / services of a wide range for large . The services include corporate lending. spread over all time zones. Corporate and Institutional Relationship. They also have an effective Marketing and recovery team in each region with responsibilities for marketing and building relationships with dealers of agri-products.ABU has four departments headed by Deputy General Managers: Agri Business. Proprietary concerns Working Capital finance extended to all segments of industries and services sector such as IT . foreign entities and banks through a network of 173offices/branches in 33 countries as on 05th Mar 2012. collection of clean and documentary credits and remittances. Working Capital Financing Assistance extended both as Fund based and Non-Fund based facilities to Corporate. The Bank has carved a niche for itself in the Euro land with branches located in Antwerp. the world over. merchant banking. Bank's Joint Ventures and Subsidiaries abroad further underline the Bank's international presence. The network is augmented by a cluster of Overseas and NRI branches within India and correspondent links with over 483 banks. monitoring and recovery. handling Letters of Credit and Guarantees. non-resident Indians. loan syndications. Planning.
. renovation etc. Pricing SBI's Prime Lending Rates (PLR) is among the lowest. Deferred Payment Guarantees To support purchase of capital equipments.Term Loans To support capital expenditures for setting up new ventures as also for expansion. Export Credit To Corporates / Non Corporates Strategic Business Units (i) Corporate Accounts Group (CAG) (ii)Project Finance (iii) Lease Finance An exclusive unit providing one s shopping to Corporate A dedicated set up specialized in financing of infrastructure and other large projects Exclusive set up for handling large ticket leases. Corporate Loans For a variety of business related purposes to corporates. Presently Bank has two PLR's SBAR for loans payable on demand and upto one year SBMTLR for loans payable beyond one year.
Corporate Banking entails the following Key Points/aspects: WORKING CAPITAL FINANCING •Assistance extended both as Fund based and Non-Fund based facilities to Corporates . dedicated set up specialised in financing of infrastructure •Prime lending rates •To Corporates / Non Corporates . This could be a simple secured or unsecured loan. •For a variety of business related purposes EXPORT CREDIT STRATEGIC BUSINESS UNITS PRICING •Corporate Accounts Group (CAG) /Project Finance Lease Finance •Exclusive unit providing one stop shopping to Corporates . Partnership firms . Proprietary concerns •Working Capital finance extended to all segments of industries and services sector such as IT •To support capital expenditures for setting up new ventures/expansion/renovation etc. or it could be a highly sophisticated structured finance transaction with many different banks or syndicates involved in the transaction. Cash management and trade finance also fall under the definition of corporate banking. TERM LOANS DEFERRED PAYMENT GUIARANTEES CORPORATE LOANS •To support purchase of capital equipments.STATE BANK OF INDIA -CORPORATE BANKING Corporate banking is defined as those products and services that relate to the lending activities between a bank and its clients.
The Corporate Banking Group and the National Banking Group are the primary delivery channels for corporate banking products. Complete Range of Products and Services The SBI offers an exhaustive range of financial products and services that answers any business or market circumstance. The others are the Project Finance unit and the Leasing unit. Its team of highly skilled and experienced product specialists helps to forecast and structure complex transaction requirements. The Corporate Banking Group consists of dedicated Strategic Business Units that cater exclusively to specific client groups or specialize in particular product clusters. It is committed to understanding the finest nuances of business objectives. to meet the most sensitive specificities of each client and each business context. Foremost among these specialized groups is the Corporate Accounts Group (CAG).PROFILE KEY POINTS : Complete Range of Products and Services The SBI Edge The SBI’s powerful Corporate Banking formation deploys multiple channels to deliver integrated solutions for all financial challenges faced by the corporate universe. . focusing on the prime corporate and institutional clients of the country’s biggest business centers. on a nationwide platform. The National Banking Group also delivers the entire spectrum of corporate banking products to other corporate clients.
The SBI Edge Commanding unsurpassed respect and legacy in the Indian financial expanse. its vast network--the world’s largest—ensures delivery channels of unmatched reach. While the bank is strongly positioned to structure financial packages that anticipate the changing business environment. the SBI is committed to offering you financial solutions that extract maximum value from business and market situations. both in India and abroad. .
1. set up exclusively to cater to the specialized banking needs of top corporate clients of the country.Fundbased & feebased •Timely.SBI's Proactive Response to Emerging Market Needs CAG is Strategic Business Unit of SBI. CORPORATE ACCOUNTS GROUP (CAG) CAG •SBI's Proactive response to emerging market needs •A Symbol of excellence •One point contact CAG . Created in the year 1995. Globalization & Liberalization of the Banking Industry.A PERFECT STRATEGIC FIT •Market leader image •Focussed attention •Flexible & Customer . comprehensive and assured delivery •Competitive pricing •Highly skilled credit expertise KEY POINTS CAG .friendly credit policies •Structured Products . It was the direct outcome of SBI's structural reorganization in the light of Deregulation. CAG's'' mission is to: MISSION OF CAG Focus on top corporate clients Establish itself as the most professional outfit of its kind in the country Render world class and cost effective financial services Evolve new products on a sustained basiscustomised to the changing needs of the corporates Stay ahead of competitors .
One point contact Account Management Teams aid clients in securing any product from any of our various associates and subsidiaries as listed below: For leasing requirements through our Leasing SBU Large Scale Project Finance through PF SBU Capital Market Requirements through SBICAPS Treasury and Investments through SBI GILTS and SBI SECURITIES Receivables factoring through SBI Factors Ltd. CAG offers an array of customer specific products like Cash Management Product.A Symbol of excellence Quality Relationship Banking Exclusive. CAG . Calcutta. leading to quickest response time in the industry.CORPORATE GROUP . Offer of wider and sophisticated products Apart from a variety of core credit products including structured finance and multi-purpose short term corporate loan.CAG . and other subsidiaries of SBI. MID. highly skilled Relationship teams of dynamic and motivated personnel. Delayered Credit process Only two stage credit process consisting of appraisal and assessment by the Relationship team and sanction by the Credit Committee/Central Board. Chennai and Ahmadabad. SBI Gilts Ltd. New Delhi.. Treasury & Forex products and Merchant Banking products in association with SBI Capital Markets Ltd. each attending to a select group of top Corporates providing a one-stop-shop for financial services presently at Mumbai.
controlled through MCG regional offices located at 10 most prominent business centers. foreign exchange. MCG serves Mid Corporate customers at other business centers through off-site model controlled by Sales Hubs and involving Relationship Banking and Centralized Credit Processing facilities. Mid Corporate Group continue to play a major role in India's economic development. The MCROs are headed by General Managers under whom the Branches of the Group function. In addition to the specialized branch network. Kolkata. The Chief General Manager (MCG) is in charge of Mid Corporate Regional Offices (MCROs) at Ahmedabad.CORPORATE GROUP The Mid Corporate Group takes care of Mid-sized corporates. Hyderabad. Managing Director and Group Executive (MC). New Delhi and Pune. MID. The Mid Corporate Group is headed by the Dy. The majority of Mid Corporate customers is located in about 50 business centers. The Bank’s Mid Corporate Group offers a wide array of client focused products and services to take care of overall banking requirements of the Mid-Corporate clients. Chennai. Bangalore. Indore.2. . Mumbai. derivatives and trade finance the Mid Corporate Group provides customized solutions to meet the entire financial requirements of midcorporate clients. with annual turnover of Rs 50 crores and above and / or enjoying credit facilities in excess of Rs 10 crores either as working capital or Term Loan with the Bank. Equipped with a talent pool of teams well versed in credit. Chandigarh. and is serviced by MCG's 64 specialized branches at all major centers.
term loans etc.Core Credit Products: Advances: Apart from usual credit products like cash credit. Authorized branches in Mid-Corporate Group accepts excise/other tax receipts. Derivatives: Treasury Department at Corporate Centre provides consultancy for Derivatives to Mid Corporate accounts to hedge various business risks. . Government Business: Trade Finance Products: Cash Management Product (CMP) Cash Management Products are available for collections and payments for all Mid Corporate accounts.. Supply Chain Financing: Supply Chain Financing services are available on eplatform to the Vendors and Dealers of Mid Corporate accounts. Trade Finance Products like LC & BG are available for Mid Corporate accounts with competitive rates. Technology Products: eTrade SBI for handling trade finance transactions by customers from their offices. Forex Competitive exchange rates are offered for Export and Import transactions. net-banking for cash-flow management etc. competitive interest rates are offered under CP Linked WCDL. RTGS. MIBOR linked WCDL and LIBOR linked FCNB. NEFT for handling remittances. Construction Equipment Loan: Line of credit for financing the requirement of existing construction companies to purchase new machines / equipments / vehicles for execution of construction projects / standard construction equipments.
Base years or longer in exceptional Rate (BR) upwards. monitoring/TRA agent etc. RBI Defined LIBOR Post shipment . Medium Term Loans 5-7 Same as above . The global presence as also the well spread domestic branch network of SBI ensures that the delivery of your project specific financial needs are totally taken care of. SBI brings considerable expertise in engineering financial packages that address complex financial requirements Project Finance SBU is well equipped to provide a bouquet of structured financial solutions with the support of the largest Treasury in India (i. Stand-alone loans. PROJECT FINANCE Project Finance Strategic Business Unit: A one-stop-shop of financial services for new projects as well as expansion. Expertise Being India's largest bank and with the rich experience gained over generation. Cap & . Lead role in many projects Allied roles such as security agent. cases Packing Credit. Synergy with SBI caps (exchange of leads. Forfeiting linked and Market Determined External Commercial LIBOR linked Borrowings(ECBs) which include Syndicated loans. diversification and modernization of existing projects in infrastructure and non -infrastructure sectors .e.3. joint syndication etc Purpose Working Capital Type of Loan Cash Credit facility Pricing Based on credit risk rating of the Company designed on the lines of internationally accepted models. SBI's). ranging from our Base Rate (BR) upwards. International Division of SBI and SBI Capital Markets Limited. Rupee Loans Project & Capex loans Export Credits Foreign Currency Loans Projects Work. joint attempt in bidding for projects. Buyers' Credit and Seller's Credit.
Dedicated group with sector expertise Panel of legal and technical experts Procedural ease Standardized information requirements Credit appraisal/ delivery time period is minimized Competitive pricing. engineering. auto components. The recent transactions undertaken by PF-SBU include a wide range of projects undertaken by the Indian Corporates. educational Institutions. textiles.Areas of in house expertise (in appraising projects) in infrastructure sector as well as noninfrastructure sector. Proven ability to arrange/syndicate loans. health industry Why Project Finance SBU? Since its inception in 1995 the Project Finance SBU has built-up a strong reputation for it's indepth understanding of the infrastructure sector as well as non-infrastructure sector in India and we have the ability to provide tailor made financial solutions to meet the growing & diversified requirement for different levels of the project. Pulp & papers. . Wide branch network ensuring ease of disbursement. chemical & pharmaceuticals. What's in it for corporate clients? Single Window Solution Professional team Appetite for large value loans. mining. other natural resources Ports and airports Telecommunications Non-infrastructure sector: Manufacturing: Cement. steel. Infrastructure sector: Road & urban infrastructure Power and utilities Oil & gas. Services: Tourism & hospitality.
50 crores from SBI. The commercial wing of PF SBU deals with projects wherein.50 crores and SBI Term Loan Rs. the cut off will be project cost of Rs. The proposed share of SBI in the term loan is more than Rs. The minimum proposed term commitment is of Rs. 100 crores in respect of Services sector). In case of projects in Road sector alone. . the minimum project cost is Rs. 200 crores (Rs. 25 Crores.50 crores.Eligibility The infrastructure wing of PF SBU deals with projects wherein the project cost is more than Rs 100 Crores. respectively.
capacity expansion at existing manufacturing units. In general. managing internal cash flows. construction ventures or other infrastructure projects. Funded facilities include cash credit. funding production and marketing operations. SBI’s working finance products comprise a spectrum of funded and non-funded facilities ranging from cash credit to structured loans. to meet the different demands from all segments of industry. providing cash support to business expansion and carrying current assets. Capital intensive business expansion and diversification as well as replacement of equipment may be financed through the project term loans. Project finance is quite often channeled through special purpose vehicles and arranged against the future cash streams to emerge from the project. Non-funded instruments comprise letters of credit (inland and overseas) as well as bank guarantees (performance and financial) to cover advance payments. The loans are approved on the basis of strong in-house appraisal of the cost and viability of the ventures as well as the credit standing of promoters. supporting supply chains. trade and the services sector. project finance covers Greenfield industrial projects.4. demand loan and bill discounting. Apart from this. Demand loans are considered also under the FCNR (B) scheme. PRODUCTS AND SERVICES (A) INDUSTRIAL SECTOR Working Capital Finance SBI offers working capital finance to meet the entire range of short-term fund requirements that arise within a corporates day-to-day operational cycle. Project Finance The SBI has formed a dedicated Project Finance Strategic Business Unit to assess credit proposals from and extend term loans for large industrial and infrastructure projects. bid bonds etc. . project term loans for medium sized projects and smaller clients are delivered through the CAG and the NBG. The SBI working capital loans can help a company in financing inventories.
usually for payments for capital goods. The bank’s corporate term loans are generally available for tenors from three to five years. SBI corporate term loans can have a bullet or periodic repayment schedule. implementing early retirement schemes and supplementing working capital. leveraging specific cash streams that accrue into your company. as befits the exact requirement of the client and the risk context. turnkey contracts etc. Again. with the option of switching the currency denomination at the end of interest periods. synchronized with your specific needs. The DPG is a standby credit guaranteeing deferred payments. SBI corporate term loans may carry fixed or floating rates. The Bank’s expert credit crew gauges the applicant’s particular fund requirements and evaluates the company’s credit worthiness. as required by the client. these rates will be linked to the bank’s prime lending rate.Deferred Payment Guarantees SBI can extend deferred payment guarantees to industrial projects for obtaining imported equipment. lease contracts for instance. . This will help you take advantage of global interest rate trends vis-à-vis domestic rates to minimize your debt cost. to fit the multi-layer financial requirements of large and long-gestation projects. The repayment mode may be linked to the cash accruals of the company. technology upgradation. Structured finance can be a combination of funded and non-funded facilities as well as other credit enhancement tools. R&D expenditure. Corporate term loans can be structured under the FCNR (B) scheme as well. repaying high cost debt. factoring in the cash flows generated by it. Structured Finance SBI structured finance involves assembling unique credit configurations to meet the complex fund requirements of large industrial and infrastructure projects. Corporate Term Loan The SBI corporate term loans can support your company in funding ongoing business expansion.
. across the span of the country. domestic and international. SBI has firm relationships across the financial map of the world. the corporate gets credit for a duration equaling the tenor of the loan. Equipment Leasing & Loan Syndication The SBI has deployed a dedicated Strategic Business Unit for lease financing that is richly experienced in arranging lease contracts for procuring expensive equipment for your project or plant. thus helping you sustain a seamless business flow along the arteries of the enterprise. that match the large credit requirements of infrastructure projects. SBI’s syndication desk can assemble large loan packages involving a ring of reputed financial entities. Dealer Financing SBI extends financial support to the corporate distribution networks. enabling smoother liquidity management. The SBI leverages its vast network of relationships to arrange syndicated credit products for corporate clients and industrial projects. Also. SBI commands formidable expertise in engineering financial packages that address complex requirements with minimum risk. Further. Channel Financing Channel financing is an innovative finance mechanism by which the bank meets the various fund necessities along your supply chain at the supplier’s end itself. On the other hand.000 branches and this enables it to deliver the financial solution at your suppliers’ doorsteps. SBI has the world’s largest banking network of over 9. this type of financial solutions allows the corporate negotiate a better price with dealers. With its rich experience and strong reputation. making it practically a cash sale. Dealer financing may be extended in the bill discounting form or simply as cash credit.SBI advantage in structured finance: Being India’s largest bank and with the rich experience that it brings with it. which can be leveraged to structure solutions that may necessitate the participation of several credit agencies. by providing both working capital finance and term loans to select dealers of identified companies. SBI arranges lease agreements as standalone contracts or as part of a structured package. This gives dealers to leverage their business relationship with major Corporates to avail low cost credit. Channel finance ensures the immediate realization of sales proceeds for the SBI client’s supplier.
Prepayment Term Loan: Maximum 1% p. Cash Credit: Repayable on demand. Repayment Term Loan: Maximum 5 years.a. renewal every year. Other expenses are to be borne by the borrower. . 80 % of the cost of the vehicle will be financed. with monthly rests and for Cash Credit.75% p. Where body building is not required. Eligibility Profit making Corporates/Non-corporates (surface transport operators) owning more than 10 wellmaintained vehicles (including the proposed). on the pre-paid amount. Purpose To finance new trucks/tankers/trailers/tippers/luxury buses including takeover of existing similar loans from other banks/institutions. subject to a maximum of 20% of the original limit may be sanctioned for repair of the vehicle. Rate of Interest For Term loans. for the residual period. 11. Quantum of finance Minimum Rs. inclusive of excise duty. starting two months after disbursement. Cash Credit 80% of the Receivables.a.a. with monthly rests. An additional Term Loan limit. 10 lacs Maximum Rs.50% p. 10 crores. 8. Repayment will be in Equated Monthly Installments (EMI). Margin 20% Term Loan 100 % of the cost of the chassis.(B) TRADE AND SERVICES SECTOR. on or after the 3rd year if the loan account is regular.
similar to an overdraft secured by a charge on current assets that meets the frequent cash requirements of your trading cycle. The bank purchases the bill of exchange your company receives against a product sale. . land or other physical assets required during the growth and expansion of the company. machinery. Applicability Metro/urban/semi-urban centers. Cash Credit for Traders SBI cash credit can be in the form of a running account. and will be determined on the basis of market interest rates as well as the credit rating of the borrower. Collateral i) At least 50% of the loan amount ii) Personal guarantee of promoters and two third-party guarantors. The extent of discounting would amount to the interest calculated till the payments for the original sale are realized. Insurance As per Banks guidelines. at a discount. thus doing away with the delay in realizing the receivables. Term Loan for Asset Acquisition The specialized product has been designed to help you purchase plant.Security Primary Hypothecation of vehicles financed as well as book debts. Bill Finance The bank’s bill finance product helps the Client to bridge the fund gap between the date of sale of products to the receipt of payments.
the bank’s informed trade finance crew can provide you with sophisticated credit and trade information and market knowledge. Backed by the SBI’s strong reputation. Further. Bank Guarantees The SBI guarantees the creditworthiness or the business capacity of its clients through its financial and performance guarantees. both domestic and international. . helping you extract more value from business.Letters of Credit The SBI offers Letters of Credit to facilitate your purchases of goods in trading operations. The bank’s vast network of branches and correspondent banks enables your enterprise to sustain a seamless flow of business on a wide platform. you will be able to build better trust in trade and forge business relationships faster.
SBI FAST ensures optimization of collections and payouts while ensuring predictability in the cash flows. SBI FAST also offers File upload facility on our web based portal and provides complete Host to Host facility (a secure. controlled processes and customized MIS. Day-0. Day-1. as mandated. . CASH MANAGEMENT PRODUCT . to the client's main account at the pooling centre the same day as the proceeds are cleared. Depending on the clearing practices prevailing at the various centres (i.SBI FAST Brief Introduction STATE BANK OF INDIA provides cash management services to Corporate Clients under the brand name SBI FAST (Funds Available in Shortest Time). SBI FAST eliminates the inherent delays of the traditional funds transfer mechanism and enhances liquidity to ensure optimum planning and utilization of funds. Convenient collecting locations across the country with pooling facility at any of our branches as per client’s choice. quick transfers. SBI FAST ensures getting Funds in time.e. seamless file transfer facility) FEATURES & BENEFITS CENTRALIZED CONTROL OF CASH INTEREST COST REDUCTION ON BORROWINGS ENHANCED LIQUIDITY CASH FORECASTING & SCHEDULING EFFECTIVE CONTROL OVER DISBURSEMENTS SBI FAST Cash Management Services Offerings 1. which are physically connected to our central hub at Mumbai. easy disbursements.5. Credit is afforded. account reconciliation. or Day-2). Collections: a. Local collections (cheques/drafts etc) Collection of instruments tendered at various CMP collection centres.
Clients can use the account for crediting local and outstation collections as well as for meeting payments and the residual balance at the end of the day swept to the main account. Cash pick up facility from client’s end available at most major centres d. Outstation cheques collection Outstation Cheques can also be deposited at our CMP Cell branches and we afford Guaranteed Credit facility with credit available on Day 1 to Day 7. Collection of instruments in General/MICR Clearing. b. Centralized Reconciliation Support. Cash collection: Facility of Cash Deposit at our CMP Cell branches on CMP software which facilitates automatic pooling of funds with MIS. c. No correspondent arrangements. . Collections are handled exclusively through our own network and hence cost effective. A nominal limit is required to be set up to take care of returns. SBI is the acknowledged leader in the collection services. Uncleared funds Option of credit against Uncleared Instruments presented in General/MICR or High Value clearing offered selectively at Bank's discretion. Outstation cheques drawn on our own branches are paid the same day at very concessional charges. e. Client is not required to open any account at the Centre from which this facility is availed. drawn on local branch and drawn on other local SBI Branches. Swept balances can be swept back to the respective accounts by reverse sweep at the beginning of next day. Balance sweep Transfer of day-end-balances in collection accounts maintained at various CMP Centres across the country to the pooling account. Instruments can be deposited at the collection centers either by their dealers / distributors / representatives or through couriers as per the arrangement.
Daily Credit forecast reports through E-Mail. Daily location-wise/product-wise presentation/credit/return reports provided to the Corporate Office through E-mails. SIP/Premium etc. Invoice no and amount received. Electronic collections 1) Direct Debit For Collection of invoice payment from Dealers. h. through E-Mail/ Floppy/CD-ROM as required. for the client over debits. maintained at CMP centres transferred to the main account at the end of the day. The facility dispenses the use of allocated limits and thereby ensures better control. Uncluttered/Pure MIS is our USP since the product is operated entirely through SBI’s own network. for easier and speedier reconciliation. Payment can be pulled from any account at any of our CBS (12. Mandate of Account holders required. compatible with the clients accounting system. where drawls are permitted up to a pre-fixed daylight limit. MIS is generated giving Dealer Name. Customized MIS Daily presentation/credit/return reports provided to the representative/dealer at the local centre. which is validated by us.500). Debit transfers Debit Balances in operating accounts. g.f. Customized weekly/fortnightly/monthly consolidated reports in soft-form. . Funds received through RTGS/NEFT modes are credited to the Corporate pooling Account. 2) RTGS/NEFT Receipts Dealer codes are set up by the corporate.
2. Any NEFT enabled Bank anywhere. Payment file upload facility available through SBI CMP Portal / Host to Host Connectivity d. Rent. Direct Credit Intra-Bank of SBI for electronic payment that uses ' Core Power '. Facsimile signature enabled up to Rs. Payment file upload facility available through SBI CMP Portal / Host to Host Connectivity c. salary.2. Banking. Electronic Clearing Scheme Electronic mode of payment at all 72 ECS centers and across India through NECS for banks on corp. Minimum Transaction Amount Rs. National Electronic Fund Transfer Inter Bank Product . Competitive market related rates Payment file upload facility available through SBI CMP Portal / Host to Host Connectivity b.0 lacs.0 lacs. pension to a large number of investors/ share holders/ employees/ ex-employees.0 lacs.Settlement through RBI. dividend. Can be used for payment for Purchases. Incentives and Salaries etc. Real Time Gross Settlement Inter Bank Product .Settlement through RBI. Payment file upload facility available through SBI CMP Portal / Host to Host Connectivity. Used for amount less than Rs.500 & growing). Payments a. Settlement online & available between CBS branches (Over 12. Provision for direct despatch to the beneficiary from our office. Useful for payment of interest. Settlement on the same day or next day. Printed with forwarding letter also. Payment file upload facility available through SBI CMP Portal / Host to Host Connectivity .5.2. e. Drafts Meets Bulk Drafts requirement on day '0'. Settlement on the day of transaction.
f. Dividend Warrants Payable at par at all 12500 plus branches Validation of Instrument No. Printed with customized forwarding letter. Payment file upload facility available through SBI CMP Portal / Host to Host Connectivity g. ECS – Across all 72 RBI/SBI/Other Bank Centres. RTGS/NEFT – Across all RTGS/NEFT enabled banks branches.5 lacs. Regular paid / unpaid status provided .10 lacs. Payable at all CBS branches of the Bank. Provision for direct despatch to the beneficiary. Dividend Warrants All electronic and paper modes handled with widest reach. Direct Credits – Across all branches of SBI. Maximum amount per cheque Rs. Drafts issued at any of the 12500plus branches. & amount at the time of payment. Multi City Cheques Client's facsimile signatures affixed for amount up to Rs.
Benefits of the SBI cash management product Ensures a comfortable liquidity position within the corporation always and significantly bring down transaction time and cost. the clients cost centers at various locations can have a daily limit with the SBI’s local branch which can be swept automatically into your main account located at your corporate center.SPECIALIZED PRODUCTS Cash Management Product The bank offers a totally technology-driven cash management product. Channel Financing Channel financing is an innovative finance mechanism by which the bank meets the various fund necessities along the company’s supply chain at the supplier’s end itself. Cash collections can be pooled at these centers at competitive rates. based on the satellitelinked SBI FAST (for Funds Available in the Shortest Time) platform that connects 120 centers spread across the country.000 branches and this enables it to deliver the financial solution at your suppliers’ doorsteps. On the other hand. more efficient and better-controlled cash circulation can actually create profit opportunities for the company. the corporate gets credit for a duration equaling the tenor of the loan. the quicker. Further. Channel finance ensures the immediate realization of sales proceeds for the SBI client’s supplier. SBI has the world’s largest banking network of over 9. making it practically a cash sale. across the span of the country. thus helping the client to sustain a seamless business flow along the arteries of the enterprise. The company will be better placed to forecast its cash positions and schedule related financial transactions accordingly. . enabling smoother liquidity management. Further.
However. variable repayment programme can also be considered based on the cash flow of the company Others The loan may be disbursed in several tranches. having credit rating of SB-1 to SB-8 (new model). . Linked to the Base Rate of the Bank as per credit rating of the company.00 crores.3.Construction Equipment Loan (CEL) Line of credit for financing the requirement of existing construction companies.100. Tenure Upto 4 years Repayment: In monthly installments. subject to minimum 10% of the sanctioned amount for any tranche.00 crores to Rs. within a period of maximum one year from the date of sanction depending on requirement of equipments / machinery / vehicles within the specified time frame. to purchase new machines / equipments / vehicles for execution of construction projects / standard construction equipments. Quantum and Pricing Rs.
Corporate banking focuses on offering a full range of services to multinationals. If we look at it from the corporate angle then the banks need to speed up their procedures and thus enabling fast functioning of the work.CONCLUSION AND RECOMMENDATIONS The availability of funding for working capital purposes is much in the news at present. transactional and electronic banking product developments and a well. the best way to present to them for credit purposes and the likely timetable – they need to start planning further in advance and understand that increased preparation is likely. According to the banks they need the companies to have credit worthiness and clean chit on their financial records. Corporate banking reflects bank’s strength in providing corporates clients in India. The corporates also need to pay off their obligations on time which would help them to create a good impression on the banks and make it easy for them for future borrowings . investment banking and markets (CIBM) structure. Corporate banking services are an integral part of the corporate. It is seen that the corporates feel that the private banks are rigid in their system and don’t make concessions considering the urgency of the situation. Potential borrowers requiring finance need to plan much further in advance for forthcoming refinancing while lenders have to operate within strictly imposed compliance and risk parameters. a wide away of commercial. It can be concluded that the banks help corporate in financial needs thus enabling them to run smoothly &effectively. large domestic corporate and institutional clients. Borrowers looking to refinance or obtain additional finance need advice as to the appetite of the banks for lending. large domestic corporate and institutional clients.integrated approach to relationship management. Hence it is suggested that the company maintain their financial performance according to the rules and regulations. which focuses on offering a full range of services to multinational.