Jaypee Business School

A constituent of Jaypee Institute of Information Technology University

A- 10, Sector 62, Noida (UP) India 201 307 www.jbs.ac.in

Corporate Internship Report
Internship Report submitted as a partial requirement for the award of the Dual Degree Management Program

Arihant Jain 05104728 DDM 2005-10 E-mail:arihant74@gmail.com

Corporate Internship Supervisor Name: Anshul Dhamija (Relationship manager) Contact details: 9999108620 Mailing Address: anshul.dhamija@ingvysyabank.com

Faculty Supervisor:Ms. Sujata Kapoor Start Date for Internship: 1st June 2009 End Date for Internship: 25th July 2009 Report Date: 31st July 2009

Self Certification by the Intern

I hereby certify that I Arihant Jain have successfully completed my internship with “ING Vysya Bank” in the month of June‘09 from (1 June to 25 July). This is also to certify that this report is an original product and no unfair means like copying etc have been used for its completion.

Arihant Jain Signature Date


Certificate from the Corporate Internship Providing Organization
This is to certify that Mr…. has successfully completed his/her internship with us in the month of ----------’09 from (mention start and end date). We wish him/her all the best for all his/her future endeavors.

Name of the Supervisor: Signature: Date:


No task is a single person effort, same is with this project. Thus I would like to extend my sincere thanks to all those people who helped me in accomplishing my project. I owe my project success to all faculty members, especially our Director Prof. Ravi Shanker, for providing me wonderful opportunity and guidance. I would like to extend my special gratitude to Ms. Sujata Kapoor and Mrs. Kanwal Anil my faculty supervisor for providing excellent supervision for the successful completion of this project. This project provided me a platform to increase my knowledge and empowered me with a better understanding of concepts in the real world scenario. And last but not the least special thanks to ING Vysya which accepted me in spite of my inexperience in the field and gave me the opportunity to work and learn with them. My special thanks are also to my Corporate Internship Supervisor Mr. Anshul Dhamija (Relationship Manager) who guided and helped me in completing this project inspite of his busy schedule.


Abstract 7 3 Internship Organisation’s Profile visà-vis its competitors Industry Analysis 8-28 4 29-46 5 Financial Statement Analysis Detailed study on the Marketing.Table of Contents S. No. Operations and Finance & HR functions OR Details of the specific field based project assigned during the internship 47-60 6 61-75 7 Project . Topic Page Number 1 Corporate Internship Objectives App no of pages ( not to be included in report) 6 2 Corporate Internship.Conclusion & Recommendations My Take Away – Key Learning’s 76 8 77 9 Annexure & References 78 5 .

To understand the business and competitive environment of ING Vysya Bank. 4. obtain knowledge & awareness of the functioning of various departments of the corporate and its environment which is utmost necessary for the success of the budding managers. To get a feel of corporate life and its functioning & understand various interaction styles. 3. To study the Business Banking Department of ING Vysya Bank and its practices. 2. 6 .Jaypee Business School Objectives of the Corporate Internship The purpose of Corporate Internship for a minimum time of 8 weeks is to connect theory and practice. To analyze and understand the financial position of ING Vysya Bank viz – a – viz competitors. To facilitate in testing what I have learnt in the foundation courses in the first year. The basic objectives of the summer internship programme for the MBA students are: 1. 5.

The client is Sahib Textiles. market cap have also gone up from the previous years. Anshul Dhamija.25 crore. He assigned me my mentor who was the relationship manager of the business banking division of ING Vysya Mr. And out of those 15 I converted 1 myself with the help of my mentor. the net profit margin. After checking there balanced sheet. I gave his case to my mentor. be it the capital adequacy ratio. All the ratios are showing vast improvements. Apart from that I worked on real projects. who finally approved his loan. profit and loss account statement and there last six month bank account. What is the pressure that each employee faces each day. From 10 to 1 pm I use to do cold calling. Uday Choudhary. On the second week I was assigned to do cold calling. what are the important documents needed to get the sanction letter. They needed a working capital of 4. They make ladies suits. The financials of ING Vysya is in a very healthy stage. Anshul Dhamija. In the first week he gave me two files of the company which he himself completed. 7 . I was working in a professional working environment with professional working people. There total assets. On a daily routine . who were my boss. I would thank them to give me such a immense opportunity to work with them. Reading those files I learnt how banks give loans. The client that I converted was Sahib Textiles. The key learning that I learnt was the fact that I saw the real corporate world. This internship also helped me make new friends like Mr. After meeting them I used to come back to my office and had to report to my mentor. Working on the real time project made me learnt how to read a bank statement. On the first day I met the branch manager of the bank Mr. It was a business banking department and it was located in Karol Bagh. I also learnt how to communicate with different types of clients. learned how banks gives business loans to there customers. I was given a data of another private bank. After lunch I used to meet all those people who have approved and would like to meet me. This was my real learning.ABSTRACT I did my summer internship in ING Vysya bank. All of the financial ratios has done better than the previous years. Uday Choudhary and Mr. my time was divided. In my whole internship I made 15 customers who gave me time to meet them. They make ladies suits.

small businesses. insurance and asset management. ING group originated in 1990. ING services its retail clients in these markets with a wide range of retail-banking. from the merger between Nationale – Nederlanden NV (the largest Dutch Insurance Company) and NMB Post Bank Group NV. The company followed suit by changing the statutory name to “ING Group N. the newly formed company called “Internationale Nederlanden Group”. 8 . large corporations.COMPANY PROFILE ING Vysya is the joint venture between ING & Vysya ING Group ING’s mission is to be a leading. Combining roots and ambitions. families. Since 1991. ING is one of the 20 largest financial institutions worldwide and in the top-10 in Europe.  Over 1.  Based on market capitalization.”.V. global.  ING is the number one financial services company in the Benelux home market. providing a wide array of Banking. insurance and asset management services in over 50 countries.20. institutions and governments.  ING Group is a global financial services company of Dutch origin with 150 years of experience. client-focused.000 employees work daily to satisfy a broad customer base: individuals. ING has grown from a Dutch company with some international business to a multinational with Dutch roots. innovative and low-cost provider of financial services through the distribution channels of the client’s preference in markets where ING can create value. Market circles soon abbreviated the name to I-N-G.

Hungary. Taiwan. Central Europe and South America they provide life insurance. ING is a top-5 provider of retirement services and life insurance. they are the top property and casualty insurer. but also with a primary focus on the Benelux countries. an Internet and direct marketing concept with which ING is rapidly winning retail.  Mutual fund. Vysya Bank Vysya bank came into existence in the year 1930. Mexico and Chile. arrangements of non-wage benefits. the company differentiates itself from other financial service providers by successfully establishing life insurance companies in countries with emerging economies. such as Korea. When the team of visionaries came together to found a bank that would extend a helping hand to those who weren't privileged enough to enjoy Banking services. Poland. Vysya Bank opened its very first branch and started its operations from Bangalore city . 9 .With a span of time it gained its strong existence in south India. In Canada. The Bank made rapid strides to reach the coveted position of being the number one private sector Bank.  ING Direct is a leading direct bank with over 11 million customers in nine large countries. In the growth markets of Asia.  Furthermore. It’s been a long journey since then and the Bank has grown in size and stature to encompass every area of present-day banking activity and has carved a distinct identity of being India's Premier Private Sector Bank.  Life insurance.e.  ING distinguishes itself internationally as a provider of ‘employee benefits’.  In the United States. such as pension plans for companies and their employees  Another specialization is ING Direct. i. In their wholesale banking activities they operate worldwide. ING Vysya group in India In India ING Vysya is into following areas of services: Banking.

And more than three million satisfied customers. ING of Dutch origin. only multiplies the credibility. profitability resulting in improved performance for the Bank to translate into higher returns. to all the stake holders. would also greatly enhance productivity.ING Vysya Bank CORPORATE STATEMENT ING Vysya Bank will be an entrepreneurial integrated financial services institution where innovation and transformation are the way of life.000 people. The pride of this global identity.12000 crores. the back up of a financial power house and the status of being the first Indian International Bank.24 billion euros.  Bank has an extensive network with almost 450 branches.  Strong and loyal client base in corporate.  It has net profit of 9. a premier Bank in the Indian Private Sector and a global financial powerhouse. during Oct 2002. BANK PROFILE ING Vysya Bank Limited is an entity formed with the coming together of erstwhile. trade and retail segment. Bank has an asset base of 1313 billion euros. serving over 85 million customers across the globe.  With total business turnover of over Rs. the presence of the group in over 50 countries. 10 .8%. Vysya bank ltd.  And has a network of more than 5000 ATM’s. employing over 1. The immediate benefit to ING Vysya Bank ltd was the pride of having become a member of global financial services giant.  Is also a part of bankex an index launched by BSE. not only across the country but also across the globe.20. Further.  It has capital adequacy of 9.

ING Vysya Mutual Fund  It aims to provide practical and secure investment opportunity to retail investors.2800 crores plus fund house.ING Vysya Bank deals in following area of Banking  Corporate Banking  Commercial Banking  Treasury management  Retail Banking  Rural Banking  Private Banking ING Vysya life insurance  The company offers entire range of life insurance plans to meet all the financial needs of an individual.  And Rs. saving and investment.protection.  Operating in 15 cities. BUSINESS ACTIVITIES CARRIED OUT BY ING VYSYA The various products offered by ING Vysya bank are 1) ACCOUNTS AND DEPOSITS 2) Current accounts 11 .  And assets worth Rs 100 crore.  With sum assured of almost of Rs 800 crore.  With 50 branches across the country.

This is in addition to a range of other attractive benefits.000 p. as well. ING Advantage Current Account gives you the power of inter-city banking with a single account and access to more than 300 cities. your business regularly requires you to receive and send funds to various cities in the country. issue and encash cheques. anywhere.50 lakhs p. ADVANTAGE CURRENT ACCOUNT: In today's fast-paced world. • • • 12 . From personalized cheques that get treated at par with local ones in any city where we have a branch. to Free collection (if instruments are lodged directly) of outstation cheques (payable at branch locations).3) Saving accounts 4) Term deposits 5) DMAT accounts CURRENT ACCOUNT The various sub-products in current account which ING Vysya gives are • ORANGE CURRENT ACCOUNT: In today's fast-paced world. anywhere. for remittance up to Rs. make balance enquires and ask for mini statements anytime.a. COMFORT CURRENT ACCOUNT: ING's Comfort Current Account lets you save as much as Rs. your business regularly requires you to receive and send funds to various cities in the country. ING Orange Current Account gives you the power of inter-city banking with a single account and access to more than 200 cities. 60. our priority services have become the benchmark for banking industry GENERAL CURRENT ACCOUNTS: With ING Vysya general current account you can access your account anytime. to free inter-city funds transfers of up to Rs. Withdraw and deposit cash.m. 25 lakhs..

SAVING ACCOUNTS The Savings accounts are primarily meant to inculcate a sense of saving for the future and take care of individuals day to day banking requirements. CUMULATIVE DEPOSITS: With ING cumulative deposits you can invest small amounts of money that ends up large saving on maturity TAX ADVANTAGE DEPOSITS: TAD is eligible for tax exemption under section 80C of the income tax act 1981. The deposit is in the form of fixed deposit or reinvestment form of 5 year duration. The Savings Accounts also help individuals to handle their financial transactions through a systematic banking channel. The rate of interest will be according to the 5 year interest rate which will be declared by RBI from time time. These accounts are meant to help individual customers protect their money. With ING your money will not only be secured but will earn a good interest. The various products in saving accounts are • • • • • • • • ORANGE SAVING ACCOUNT ADVANTAGE SALARY ACCOUNT FREEDOM ACCOUNT GEERAL SAVING ACCOUNT SOLO SAVING ACCOUNT SARAL SAVING ACCOUNT ING FORMULA SAVING ACCOUNT ASPIRA CORPORATE SALARY SOLUTION. The ING Demat Account offers you a secure and convenient way to keep 13 . most settlements happen through Demat (Dematerialisation of securities). This increases the safety as customers need not carry physical cash with them. • DEMAT ACCOUNT With practically all trading being conducted electronically. TERM DEPOSITS The various term deposits are • • • FIXED DEPOSITS: If you believe in the long term investments and wish to earn long term interest on your deposits. than invest in ING fixed deposits. AKSHAYA DEPOSITS: your deposit with interest will be reinvested every quarter to earn a higher yield.

2) BUSINESS LOAN –RENT: The Mpower rent allows loans against the security of your receivables. 5 lakhs upto Rs. without the hassle of handling physical documents that get mutilated or lost in transit. specially customized for Small & Medium Business Enterprises. Contractors. Commission Agents and Transport Operators as well as practicing professionals like Doctors. Lawyers. partership firms. ING Vysya Bank presents a unique banking loan. Shop owners.CGTSI: 14 . Consultants.track of your shares and investments. Retailers. 3) BUSINESS LOANS (SMALL SCALE INDUSTRIES). 2) LOANS • • • • HOME LOAN HOME EQUITY LOAN NRI LOAN MODEL POLICY 3) NRI SERVICES • • • • • • RUPEE SAVING ACCOUNT RUPEE CURRENT ACCOUNT RUPEE FIXED DEPOSITS ACCOUNTS FOR RETURNING INDIANS FOREIGN CURRENCY DEPOSITS MI REMIT 4) CARDS • • • • DEBIT CARDS CREDIT CARDS REMMITANCE CARD REWARD CARD SMALL AND MEDIUM ENETRPRISES 1. propietry concerns. These loans are available for Small Business Entrepreneurs. Women Entrepreneurs and any others with a credit requirement ranging from Rs. tructs and registered bodies who will meet the eligibility criteria will be able to secure fast finance . Individuals. BUSINESS LOANS – MPOWER BUSINESS LOAN: Small business entrepreneurs often encounter problems regarding finance. how much you've bought and sold over a period of time. public and private limited companies. 50 lakhs.

including Information Technology and / or Software industry are eligible.ING is one of the member lending banks for CGTSI. domestic business houses and prime public sector companies. However. trade and transactional services. industry benchmark service levels and strong customer orientation. In addition the guarantee fee payable to CGTSI would be debited to the account. A well-integrated approach to relationship management and innovative product development helps the bank achieve the above. The bank has made significant inroads into the formal banking consortia of a number of Indian companies including multinationals. along with a host of conveniences to give you maximum value and benefits. ING Ltd offers loans of up to Rs 25 lakhs to SSI units under CGTSI at competitive interest rates without any collateral security and / or third party guarantee. if you had more time. while your MPower Business Account works hard. CGTSI: credit gurantee fund trust for small scale industries. transactional and electronic banking products. 4) MPOWER BUSINESS ACCOUNT: MPower truly empowers you to create the business empire of your dreams. foreign exchange and cash management. The offerings take into account a client's risk profile and specific needs. The various offerings by the bank in the wholesale banking services are 1) CASH MANAGEMANT SERVICES 2) CORPORATE AND INVESTMENT BANKING: The 'C&IB' manages Relationships with large Corporate in both the private and public sector. Treasury Services. to name a few. the primary focus of the group is to market the bank's products and services to the client base. apart from also 15 . Minimum Loan Amount: No Minimum Amount Maximum Loan Amount: Rs 25 lacs Eligibility: The SSI units engaged in activities like manufacturing. quite like you would personally do. including Lending Products. The bank offers a wide array of client-focused corporate banking services. Cross Border Products from ING Group. you are now free to focus on other business needs. It is a working capital account that enriches small and medium business enterprises by making optimum use of your banking facility. Fee Based Products. Thus. and meeting the day-to-day needs of your business. processing or SSSBEs. based on our superior product delivery. WHOLESALE BANKING Wholesale Banking is a reflection of ING's ability to provide its corporate clients in India a full range of commercial. including working capital finance.

FINANCIAL MARKET 16 . BFIG's clientele includes scheduled commercial banks i. origination of ECB mandates. including cross sell of Products and Services to Retail Customers of our Corporate Clients and their Employees. It also provides Commercial Banking Services with specific focus to Industries. relating to Diamond & Textiles. C&IB Group is organized on a regional basis with relationship managers covering:    Western Region and Eastern Region out of Mumbai. private and foreign banks. some select large co-operative banks and other financial intermediaries including mutual funds. Term Loans. Guarantees and certain structured finance products. asset buyouts and sell downs. also markets the bank's Products. nationalized. 4) EMERGING CORPORATES: The "EC" manages relationships with business units engaged in Manufacturing. and Northern out of Delhi 3) BANKS AND FINANCIAL INSTITUTION GROUPS: "BFIG" works with renewed focus on the financial intermediaries in the country. distribution of debt/loans. The major areas of thrust for the group are fund mobilization both onshore as well as offshore. The wide range of products comprehensively meets the business requirements with special focus on Export Credit. insurance companies and housing finance companies. Sales of Cross Border Products of ING Group and other ING entities in India are also marketed. cash management services. The group also seeks to build relationship with banks that are not present in the country but the relationship can be leveraged for trade and guarantee business.cross selling the bank's retail Products and Services. Non Fund based limits like Letters of Credits. The group also crosses sells products of ING Vysya Life Insurance and ING Vysya Mutual Funds. Processing and Services sector. trade finance related transactions. Southern Region out of Bangalore. distribution of ING products to Indian banks and cross sell of financial market / asset management / insurance products etc. capital market services.e. Chennai and Hyderabad. "EC". regular Working Capital Finance.

we play a key role in the Asset Liability Management and ALM strategy. FX Swaps. Delhi. small and medium enterprises as well as individual needs. The ALM team manages the banks statutory and investment portfolios. The offering in ING financial are: 1) MARKET MAKING AND TRADING: The Market Making unit provides competitive prices on all major currency and interest rate products to the client facing Financial Market Sales teams as well as to other market participants. 2) ASSET LIABILITY MANAGEMENT: The ALM unit of Financial Markets plays a pivotal role in the formulation and implementation of the bank's Asset Liability Management strategy. tools for analysis and access to research from the ING Group. The product range includes the Indian Rupee.ING Financial Markets. Bangalore and Chennai to keep us closer to our clients. The sales teams use some of the most advanced pricing systems so as to be able to structure and price across a wide range of products. To our corporate and institutional clients. we offer a comprehensive range of products for transactions and risk management needs through the sales desks at Mumbai. The Sales team is geographically distributed across offices in Delhi. It is also responsible for managing liquidity and interest rate risk and plays an active role in the management of Transfer Pricing within the bank. Our highly qualified relationship managers offer the most appropriate solutions for these needs drawing on the knowledge and expertise within the ING Group. 17 . The Financial Markets business is driven by a highly qualified and knowledge driven team that brings together a deep understanding of local and global markets as well as complex financial products. Bangalore & Chennai. Within the bank. The sales team is supported at each location by information systems providing comprehensive and up-to-date market information. We also draw from the robust product and pricing capabilities of the ING Group and its various desks across the world to offer the best solutions for our clients. Supported by state-of-the-art systems and the capabilities of the ING Group. Corporate Debt and most Rupee Interest Rate benchmarks including the Overnight Index Swaps and MIFOR. 3) FINANCIAL MARKET SALES: Financial Markets Sales team offers solutions to clients for their varied risk management needs. ING is one of the largest and most competitive price makers in Indian Rupee. all major currencies. Financial Markets unit is an active market maker on most rupee interest rate and currency products. Appropriate market timing and efficient execution is a key to product delivery in Financial Markets. The Trading team is driven by knowledge. Government of India Securities. based out of Mumbai is a leading player in the Indian Financial Markets providing one of the widest ranges of products for large corporate. we offer competitive pricing and efficient execution across markets and a comprehensive suite of products. Strong client relationships acquired over the bank's 75 years of service in the Indian markets augment our understanding of customer needs and risk management requirements. focus and discipline and seeks to find value across various permitted assets and instruments for the bank's proprietary account. Mumbai.

The term loans are categorized in these segments. apart from helping in product structuring based on both client needs and market opportunities.To aid this the Sales team is supported by a niche Structuring desk that. helps in efficient execution of mandates. • • • • • • • • • • • Poultry Dairy Wells Pump sets Tractors Plantation crops Horticulture crops Rural housing Rural godowns Micro finance institutions Swarjogar credit card. 2) SHORT TERM LOAN: short term loan are categorized into following segments • • • • KISSAN credit card Working capital loan to poultry Gold loans for agriculture Produce loans against warehouse receipts 18 . AGRICULTURE AND RURAL BANKING 1) TERM LOAN: ING have identified rural banking as products and services.

ORGANISATIONAL STRUCTURE ING Vysya Bank follows a 3-tier structue The regional offices are given more powers and jurisdiction so as to enable them to act quickly. Structure of a Bank Branch 19 .

20 .From the structure we can see how the functional relationship works in a branch. It indicates the communication flow in the branch with well-defined accountability on the part of the employees’ roles. He structure also explains the reporting authority for each cadre of the employees.

and nil for freedom Fee for non maintenance of quarterly average balance Statement of account Rs.D.2.5. then Rs.000 for savings account and Rs. Rs.600 for Quarterly free. Rs. Rs.799 Rs.150 there after. free for gold savings account.COMPERATIVE ANALYSIS OF ING VYSYA BANK’S SAVING ACCOUNT WITH OTHER BANKS SAVING ACCOUNT 1) ING VYSYA V/S YES BANK FEATURES NO.5 per 1000 for gold savings Rs.50 1000 for for amt amt up up to to Min Rs.Rs 2 per 1000 for 21 . and Quarterly free for both. account.Rs. 4 free for on cirrus for freedom orange . unlimited free account Regular debit card holders limited from ING Vysya Free for first year. gold saving account.100000 for gold savings savings account.1.300 for Average quarterly account balance account Rs.5 account and Rs.000. account.149 for savings Unlimited free on all the banks in India.10. gold savings account.10.000.000 on orange. Rs. monthly e-statement free ATM usage (if asked for).un Rs.799 Gold debit card D.600 per quarter account and Rs.50 then Rs.50 per per 1000 for savings 50. OF PRODUCTS ING VYSYA Two: account orange and freedom YES BANK savings Two: savings account.2.

O. Rs.5. Rs. free monthly e-statement free per 22 . OF PRODUCTS ING VYSYA Two: account orange and ICICI BANK savings Three: category A.2000 for B. and Free physical statement qtr otherwise Rs. Average quarterly account balance Fee for non maintenance of quarterly average balance Statement of account account Rs. 5 free for savings account and 10 free for gold savings account. account.amt greater than 50.5000 for A. B freedom and C.100 per qtr for C.750 per qtr for A & B and Rs.200 per month for physical form. Free estatement per month.000 Pay order (P.1000 for C.600 per quarter Quarterly (if asked for). and nil for freedom Rs. Rs. and Rs. Branch transaction Free for both the account holders per year 5 transactions transactions savings Personalized books Balance enquiry Free Free cheque Free free per year Free for for gold are savings account and 10 account 2) ING VYSYA V/S ICICI BANK FEATURES NO.000 on orange.) Same as above.

D.25 with non 3) ING VYSYA V/S HDFC BANK FEATURES NO. to Rs. books of 25 for leaves each free in a Rs. Rs. holders .10.20/month same for with cash non account.000 Free for both Rs.50/ thousand.10000 2 payable at par cheque quarter.000. limited from ING Vysya Free for first year then Rs.50 the products.000.ATM usage 4 on free cirrus for for freedom Rs. freedom savings plus & savings 23 . OF PRODUCTS ING VYSYA Two: orange account and HDFC BANK savings Three products: regular.2 per thousand per rupees or part thereof.2.2.Rs 2 per 1000 for of Rs.50/additional cheque book Balance enquiry Free of 25 leaves.un partner banks.10 with partner banks.60 orange for account Regular debit card D.50 1000 for for amt amt up up Rs.Rs. Rs.150 per annum. min Personalized books cheque Free of subject Rs. to subject to a minimum 50.30 to and max of Rs. partner banks & Rs. unlimited free withdrawal & and Rs.99 per annum for all Rs.50 Branch transaction amt greater than 50.

100 plus taxes Rs.50 1000 for for amt amt up up to to Rs.000 on orange. Quarterly statements monthly e-statement free Collected ATM usage 4 on free cirrus for for freedom sent by post First 4 withdrawals free of cost from any cirrus account.000 Pay order (P.(I have comparative product that is option 1 Average quarterly Rs. and nil for freedom Rs.5.150) for amt greater than 50000 Same as above.) Rs.10.D.50 for amt up for to amt Rs. unlimited free account Regular debit card D.000.5000 Rs.un orange network ATM limited from ING Vysya Free for first year then Rs.50 per 1000 or part thereof (Min Rs.account max.50 per 10000.000. Rs. account balance Fee for non maintenance of quarterly average balance Statement of account Quarterly (if asked for). Free 3 free in the qtr & Rs. holders .2.) Branch transaction Same as above. 2. Free for both 24 . Rs. each of which are further taken divided into option 1 and 2. Rs. free and Monthly statements to be from branch.600 per quarter of regular savings acc.750 per qtr.O.150 per annum.Rs.75 greater than 10000 and up to up 50000. 60 per additional on of nonMin (cash transaction maintenance balance 50.Rs 2 per 1000 for amt greater than 50.

25 .2 per leaf for regular Free usage of HDFC bank for leaves free pm for plus.6000 for plus. 300 200 leaves free pm for trade. plus. Rs. Rs.5 per cheque leaf for GCA and free others PAP cheque books.1200 trade.10000 for regular GCA.4000 pq for OCA.40000 CA. Rs. ATM usage Free usage of ING Vysya.deposit/withdrawal) Personalized books Balance enquiry Free cheque Free Free. & Rs.5 per leaf on non maintenance balance Free of Min COMPERATIVE ANALYSIS OF ING VYSYA BANK’S CURRENT ACCOUNT WITH OTHER BANKS SAVING ACCOUNT I) ING VYSYA V/S HDFC BANK FEATURES Number of products Average balance ING VYSYA Three: general.45 on withdrawal from ATMs.2. & Rs. Rs. trade.750 for Fee for non maintenance of AQB Rs. 100 leaves free pm for premium and Rs.900 for premium and Rs.25000 for premium.100000 Rs. premium.1500 pq for ACA. Rs.100000 for orange CA Rs.10000 for general CA. Four: advantage and orange HDFC plus. Statement of account Issue of cheque book regular. and regular quarterly Rs. Rs.750 pq for Rs. Free once in a month Free once in a month (physical or e-mail) Rs.50000 for advantage Rs. for for trade. & for Rs.

25/. charges @ DD Amount Up to Rs.50.100.25/-.000 Rs. 25/-. 50.50/1000 with a min Free in the manner as of Rs. free up to cumulative value of 50 lkhs pm then same is followed as in GCA. Above Free Rs. charges @ Rs. Above 30 Free for all debit card Transfer account (intercity) D.100.000 and up to Rs.per DD for plus.000 charges Rs. free up to 50 lkhs per month then charges as per schedule for rest. Above 50 transactions. 50. premium and DD Amount Up to Rs. amount.000. 100.000 charges Rs.50.O.000- schedule on the greater Rs.per DD for trade. 40/per DD.other banks Issue of international Free for 1st year. for 100. for stated above. 26 . Above Rs.150 Free for first year there after from to one Free for all other Free as per schedule for GCA.5 per payment in case of GCA.000Rs. in case of ACA and for Free up to 30 DDs per transactions.40/. Above Rs. Rs. OCA free up to 200 lkhs then charges as per Free up to 50 DDs per month.Free Charges for PAP cheque payments for regular. Rs.000and up to Rs.0.per DD.D/P. 25/. month. Above Rs.

50000 for advantage Rs.5 per cheque leaf for ATM usage GCA and free others Free usage of ING Vysya.25 for all 2) ING VYSYA V/S YES BANK FEATURES Number of products Average balance ING VYSYA Three: advantage and orange YES BANK 200 and CA 500. Rs. Rs. CA quarterly Rs. Information not available.4000 for the respectively Rs. and Rs. there after from to one Free for all other Rs. Statement of account Issue of cheque book Free once in above products a Free once in a month.2 per leaf for CA 25 rest.10000 for general CA.150 Information not available. month(physical or e-mail) Rs.75000. Rs. Rs. & Rs. Four: CA 25.750 pq Fee for non maintenance of AQB for the above products.2000.OCA free up to a cumulative value of 200 lkhs pm then same is Balance enquiry followed as in GCA. Rs.25 lakhs per month subsequent 0.200000 CA.25000.1500 pq for ACA. Rs.50 per Rs. Rs. & Rs.500000 orange CA Rs.1500. GCA. Rs.1000.4000 pq for OCA.2. and respectively general.100000 for for Rs. Rs. CA 75.15 for all Rs.1000 for CA 25. Rs.45 on withdrawal from Issue of other banks international Free for 1st year. Rs.50 for and unlimited free for the debit card Transfer account (intercity) 27 .

1. Min. DD:2 Free Per Month Min-Rs.100 Max-Rs. free up to 50 lkhs per month then charges as per schedule for rest. Rs.75 Max.Rs. and D.Rs.1000. PO: 2 Free Per Month Subsequent 0.5000 Month part subsequent there of in case of ACA and for subsequent schedule on the greater for CA 75.0.100 Max-Rs. MinRs.1000 or part there of Min. Free as per schedule for GCA. 5 Free Per Month Rs. 5 Free Per Month.1000.50/1000 with a min Free unlimited of Rs. Subsequent 0.50 month per subsequent Rs.50 per rs.75 MaxRs.5000 for CA 75 and free for the Charges for PAP cheque payments rest.Rs. for OCA free up to a 28 . free up to cumulative value of 50 lkhs pm then same is followed as in GCA. Rs. 5 Free Per amount.5000 for CA 25.5000 for CA 200 and free for CA 500.1000 or Min.lakhs per 0. OCA free up to 200 lkhs then charges as per unlimited for the rest.75 per Rs.5 per payment in case of GCA.75 per Rs.D/P.1.100 Max-Rs.Rs.75 per rs.5000 for CA 25.1000 for CA 75.O.

Each has its own dedicated target market. Few of them work in rural sector while others work in both rural and urban.15 for all Information not available. The banks in India are 29 .cumulative value of 200 lkhs pm then same is Balance enquiry followed as in GCA. Each group has its own benefits and limitation operating in India. BANKING INDUSTRY ANALYSIS STRUCTURE BANKS IN INDIA: In India banks have separated in different groups. Many of them are catering in cities. Some of them are of Indian origin while others are of foreign origin. Rs.

30 .

with assets expected to reach US$1 trillion by 2010. Players are becoming increasingly customer-centric in their A approach. The country’s middle class accounts for over 320 million people. focusing on the expansion of retail and rural banking. rising income levels. In correlation with the growth of the economy. An expanding economy. “The banking industry should focus on having a small number of large players that can compete globally rather than having a large number of fragmented players. The Indian banking Industry is in the middle of an IT revolution. which has resulted in innovative methods of offering new banking products and services. “Indian banking industry assets are expected to reach US$1 trillion by 2010 and are poised to receive a greater infusion of foreign capital.” says Prathima Rajan. Banks are now realizing the importance of being a big player and are beginning to focus their attention on mergers and acquisitions to take advantage of economies of scale and/or comply with Basel II regulation. middle class.GROWTH TRENDS The Indian banking market is growing at an astonishing rate. and technological innovations are all contributing to this growth. analyst in Celent's banking group and author of the report. increased standard of living." 31 . and affordability of banking products are promising factors for continued expansion.

One is communication and connectivity and other is Business process reengineering. 32 . The entry of foreign banks resulted in a paradigm shift in the way banking was done in India. integrated and secure payment and settlement system for the financial service sectors. so that they could retain there customer base. popularizing electronic clearing services (ECS) and integration of RBI-EFT scheme with funds transfer schemes of bank. introduction of centralized fund management system (CFMS) are significant milestones in this regard. a wide area satellite network (WAN) using VSAT(very small aperture technology) was jointly set up by Reserve Bank of India and Institute for Development and research for banking in1999. INFINET. transmission. Information technology enables sophisticated product development. better market infrastructure. During the fourth phase important initiatives were taken with regard to improve the banking system. efficient. The arrival of foreign banks and private banks with there superior state of the art technology pushed the Indian banks to adopt latest technology in market. Substantial progress has been made for developing a modern. and retention of electronic data to be treated as a valid proof in the court of law The Reserve Bank of India has assigned priority to the up gradation of technology in the banks. INFINET which was initially comprised only public sector banks was opened for participation by other categories of members. Modernization of clearing and settlement system through MICR based cheque clearing. implementation of reliable techniques for control of risks and help the financial intermediaries reach geographically distant and different market. Information technology has been used under two different avenues in banking.TECHNOLOGY IN BANKING In the six decades of independence banking has evolved in four different phases. The information technology act 2000 has given legal recognition for creation. In India banks as well as other financial entities entered the world of information technology and with Indian financial network(INFINET).

At the base of all the interbank message transfers using the INFINET is the structured financial messaging system (SFMS). This could enhance the risk management capabilities of banks. 33 . All the interbank messages will be stored and switched to central hub at Hyderabad while the intra bank messages will stored in the bank gateway. It would serve as a secure communication carrier with templates for intra and interbank messages in a strict message format that will facilitate straight through messaging. The centralized fund management system (CFMS) which would enable banks to obtain account wise and centre wise position of their balances has been implemented in a phased manner from November 2001. Information technology has immense untapped potential in banking. Strengthening the information technology in banks could improve the effectiveness of asset liability of banks. Building up of a related data base would strengthen and enhance the forecasting of liquidity of banks at the branch level. Security standards of SFMS will match the international standards.The coverage of electronic clearing services has been significantly effective to encourage non paper based fund and develop a centralized facility for effective payment. The scheme for electronic fund transfer operated by the reserve bank has been augmented and now it is present in 13 cities. Membership of INFINET has been opened to all the banks in addition to those in the public sector banks.

RBI act. To protect banking confidentiality 5. Advocates of Basel II believe that such an international system can help protect the international financial system from many types of problem that arise should a bank or a series of banks collapse. In practice Basel II attempts to accomplish this by setting up rigorous risks and capital management requirement designed to ensure that the banks hold capital reserves appropriate to the risks the banks exposes itself to through its investment and lending practices.to reduce the risk of disruption resulting from Adverse trading conditions for banks causing multiple or major bank failures 3. Basel II norms. Systemic risk reduction -. Subsequently it was changed to Banking regulation act on 1/3/66.to reduce the risk of banks being used for criminal Purposes. and the emphasis. laundering the proceeds of crime 4. Generally speaking this rules says that the greater the risk the bank exposes itself. Avoid Misuse of Banks -. Credit allocation -.e. The purpose of Basel II norms is to create international standards that banking regulators can use when creating regulations about how much capital does banks needs to put aside to guard against the types of financial and operational risks banks face.to reduce the level of risk bank creditors are exposed to (i. the Banking regulation act 1949. The most common objectives are 1. BASEL II NORMS Basel II is the second of the Basel accords which are recommendation on the banking laws and regulations issued by banking committee on banking supervision. the greater the capital bank requires to safeguard its solvency and overall economic stability. e. Negotiable Instruments act. Prudential -.to direct credit to favored sectors 34 .LEGAL/ REGULATORY ISSUES RELATED TO BANKING Banks works under various legal frameworks most important of them are.g. OBJECTIVES OF BANK REGULATION The objectives of bank regulation. vary between jurisdiction. BANKING REGULATION ACT 1949 The banking regulation act was passed as banking companies act and it came into force in 16/3/49. to Protect depositors) 2.

As a result of this. MINIMUM REQUIREMENT Requirements are imposed on banks in order to promote the objectives of the Regulator. giving directions. This section of the article describes general principles of bank regulation throughout the world. MARKET DISCIPLINE The regulator requires banks to publicly disclose financial and other information. imposing penalties or revoking the bank's license. SUPERVISIORY REVIEW Banks are required to be issued with a bank license by the regulator in order to carry on business as a bank.GENERAL PRINCIPAL OF BANK REEGULATION Banking regulations can vary widely across nations and jurisdictions. and depositors and other creditors are able to use this information to assess the level of risk and to make investment decisions. The most important minimum requirement in banking regulation is Minimum capital ratios. and the regulator supervises licensed banks for compliance with the requirements and responds to breaches of the requirements through obtaining undertakings. 35 . the bank is subject to market discipline and the regulator can also use market pricing information as an indicator of the bank's financial health.

1860. RBI would derive supervisory comfort in case of banks which are members of the Board. it would function as an independent and autonomous body. RBI constituted the Committee on Procedures and Performance Audit of Public Services under the Chairmanship of Shri S. 36 . the Reserve Bank also decided to extend financial support to the Board by way of meeting its full expenses for the first five years. After in depth study at the grass root level the Committee concluded that there was an institutional gap for measuring the performance of banks against a bench mark reflecting the best practices (Code and Standards). Therefore. to ensure that banks evolve comprehensive codes and standards for fair treatment of customers of banks It is necessary to have an independent watch dog to ensure that banks deliver services in accordance with such codes and standards. independent and effectively monitors and enforces the compliance of such Codes and Standards.S. the Committee recommended setting up of the Banking Codes and Standards Board of India broadly on the lines of Banking Codes and Standards Board functioning in U. It is necessary to ensure that the institutional mechanism is autonomous. Reserve Bank has agreed to lend it financial support for a limited period. The Banking Codes and Standards Board of India has been registered as a separate society under the Societies Registration Act. It is an independent banking industry watch dog to ensure that the consumer of banking services get what they are promised by the banks.Tarapore (former Deputy Governor) to address the issues relating to availability of adequate Banking Services to common man. Therefore. The mandate to the Committee included identification of factors that inhibited the attainment of best customer services and suggesting steps to improve the quality of banking services to individual customers. This was to enable the Board to reach its economic critical mass that will make it truly independent in its functioning and take a view on any bank without its existence coming under any threat. On its part.K. In November 2003. in the public interest.BANKING STANDARDS Recognizing that it is necessary. To ensure that the Board really functions as an autonomous and independent watchdog of the industry. In substance. the Board has been set up to ensure that common man as a consumer of financial services from the banking Industry is in a no way at a disadvantageous position and really gets what it has been promised. The Banking Codes and Standards Board of India is not a Department of the RBI. The Committee felt that in an effort to continuously upgrade the package of services that banks offered to their customers there was a need of benchmarking of such services.

THE PRODUCT MIX: The banks primarily deal in services and therefore, the formulation of product mix is required to be in the face of changing business environmental conditions. The changing psychology, the increasing expectations, the rising income, the changing lifestyles, the increasing domination of foreign banks and the changing needs and requirements of customers at large make it essential that they innovate their service mix and make them of world class. Against this background, we find it significant that the banking organizations minify, magnify combine and modify their service mix. PRODUCT PORTFOLIO: The bank professionals while formulating the product mix need to assign due weight-age to the product portfolio. By the concept product portfolio, emphasis is on including the different types of services/ schemes found at the different stages of the product life cycle. The portfolio denotes a combination or an assortment of different types of products generating more or less in proportion to their demand. The quality of product portfolio determines the magnitude of success. It is excellence of bank professionals that help them in having a sound product portfolio. We find the composition of a family sound, if members of all the age groups are given due place. Like this, the composition or blending of a service mix is considered to be sound, if well established and likely to be profitable schemes are included in the mix. The bank professionals are supposed to perform the responsibility of composing the same. An organization with a sound product portfolio gets a conducive environment and successes in increasing the sensitivity of marketing decisions. If the banks rely solely on their established services and schemes, the multidimensional problems would crop up in the long run because when the well established services/schemes would start saturating or generating losses, the commercial viability of banks would of course, be questioned. It is in this context, that we find designing of a sound product portfolio essential to an organisation. We can’t deny that the product portfolio of the foreign banks is found sound since they keep their eyes moving. The innovation, diffusion, adoption and elimination processes are taken due care. The public sector commercial banks need to innovate their service and this makes a strong advocacy in favour of analyzing the product portfolio. THE PRICE MIX In the formulation of product mix, the pricing decisions occupy a place of outstanding significance. The pricing decisions or the decisions related to interest and fee or commission charged by banks are found instrumental in motivating or influencing the target market. The Reserve Bank of India and the Indian Banking Association are concerned with the regulations. The rate of interest is regulated by the RBI and other charges are controlled by the Indian Banking Association. To be more specific in the Indian setting, we find this component of the marketing mix significant because the banking organizations are also supposed to sub serve the interests of weaker sections and the backward regions. The public sector commercial banks in particular are supposed to play developmental role with societal approach. It is natural that this specific role of the public sector commercial banks complicates the problem of pricing.


Pricing policy of a bank is considered important for raising the number of customers vis-à-vis the accretion of deposits. Of course, there are a number of factors to influence the process but it is also right to mention that the key role in the entire process is played by the Reserve Bank of India. To be more specific when we find a number of domestic and foreign banks working in the Indian economy, the Reserve Bank of India bears the responsibility of making the business environment conductive. The non-banking organizations and foreign banks have been found attracting customers by offering to them a number of incentives. The potential customers or investors frame their investment plans in the face of pricing decisions made by the banking organizations. While formulating the pricing strategies, the banks have also to take the value satisfaction variable into consideration. The value and satisfaction can’t be quantified in terms of money since it differs from person to person, keeping in view the level of satisfaction of a particular segment, the banks have to frame their pricing strategies. The policy makers are required to be sure that the services offered by them are providing satisfaction to the customers concerned. The pricing decisions may be to bit liberal, if the potential customers are found shifting to the non-banking investments. In this context, it is pertinent that pricing is used as motivational tool. The banking organizations are required to frame two-fold strategies. First, the strategy is concerned with interest and fee charged and second, the strategy is related to the interest paid. Since both the strategies throw a vice-versa impact, it is pertinent that banks attempt to establish a correlation between the two. It is essential that both the buyers as well as the sellers have a feeling of winning as shown in figure.

The RBI has to be more liberal so that the public sector commercial banks make decisions in the face of changing business conditions. There is no doubt in it that the commercial banks bear the responsibility of energizing the social marketing, they are also supposed to bear the social costs. It is also right that the foreign banks have been found making the business environment more competitive. These emerging trends necessitate a close look on the pricing problem. The policy makers find it difficult to bring a change since the regulations of the RBI make things more critical. The expenses are not regulated by the RBI and the banking organizations are forced to increase the budgetary provisions. The sources of revenue are regulated which complicates the 38

task of bank professionals. This makes it essential that the Reserve Bank of India, the Government of India and the banking organizations thing over this complicated issue with a new vision.

PROMOTION MIX In the formulation of marketing mix the bank professionals are also supposed to blend the promotion mix in which different components of promotion such as advertising, publicity, sales promotion, word-of-mouth promotion, personal selling and telemarketing are given due weight age. The different components of promotion help bank professionals in promotion the banking business. Advertising: Like other organizations, the banking organizations also us this component of the promotion mix with the motto of informing, sensing and persuading the customers. While advertising, it is essential that we know about the key decision making areas so that its instrumentality helps bank organization both at micro and macro levels. Finalizing the Budget: This is related to the formulation of a budget for advertisement. The bank professionals, senior executives and even the police planners are found involved in the process. The formulation of a sound budget is essential to remove the financial constraint in the process. The business of a bank determines the scale of advertisement budget. Selecting a Suitable vehicle: There are a number of devices to advertise, such as broadcast media, telecast media and the print media. In the face of budgetary provisions, we need to select a suitable vehicle. The latest developments in the print technology have made print media effective. The messages, appeals can be presented in a very effective way. Making Possible creativity: The advertising professionals bear the responsibility of making the appeals, slogans, messages more creative. The banking organizations should seek the cooperation of leading advertising professionals for that very purpose. Instrumentality of branch managers: At micro level, a branch manager bears the responsibility of advertising locally in his / her command area so that the messages, appeals reach to the target customers of the command area. Of course we find a budget for advertisement at the apex level but the business of a particular branch is considerably influenced by the local advertisements. If we talk about the cause-related marketing, it is the instrumentality of a branch manager that makes possible the identification of local events, moments and make advertisements condition-oriented. Public Relations: Almost all the organization need to develop and strengthen the public relations activities to promote their business. We find this component of the promotion mix effective even in the banking organizations. We can’t deny that in the banking services, the effectiveness of public relations is found of high magnitude. It is in this context that we find a bit difference in the designing of the mix of promoting the banking services. Of course in the consumer goods manufacturing industries, we find advertisements occupying a place of outstanding significance but when we talk about the service generating organizations in general and the banking organizations in particular, we find public relations and personal selling bearing high degree of importance. It is not meant that the banking organizations are not required to advertise but it is meant that the bank executives unlike the executives of other consumer goods manufacturing organizations focus on public relations and personal.


Personal Selling: The personal selling is found instrumental in promoting the banking business. It is just a process of communication in which an individual exercise his/her personal potentials, tact, skill and ability to influence the impulse buying of the customers. Since we get in immediate feed back, the personal selling activities energies the process of communication very effectively. The personal selling in an art of persuasion. It is a highly distinctive form of promoting sale. In personal selling, we find inter-personal or two-way communication that makes the ways for a feed back. There is no doubt in it that the goods or services are found half sold when the outstanding properties are well told. This are of telling and selling is known as personal selling in which an individual based on his/her expertise attempts to transform the prospects into customers. Sales Promotion: It is natural that like other organisations, the banking organizations also think in favour of promotional incentives both to the bankers as well as the customers. The banking organizations make provisions for incentives to the bankers and call this bakers’ promotion. Like this, the incentives offered to the customers are known as customers’ promotion. There are a number of tools generally used in the different categories of organizations in the face of the nature of goods and services sold by them. The gift, contests, fairs and shows, discount and commission, entertainment and traveling plans for bankers, additional allowances, low interest financing and retalitary are to mention a few found instrumental in promoting the banking business. As and when the banking organizations offer new services and schemes, the tools of sales promotion are required to be innovated. This is with the motto of stimulating the new and old customers. An important thing in the very context is the changing needs and requirements of customers/prospects. The bank professionals bean outstanding task of studying the competitors’ strategies which would he them in initiating the process of innovation. Here it is important to mention the promotional incentives to the customers would focus on decisions related to the selection of a tool. There are a number of considerations to streamline the process. The bank professionals are supposed to study the market conditions and make necessary suggestions, specially regarding the incentives. It is a blending process and bank professional have to be sure the whatever the provisions, they make are fulfilled on priority basis. More incentives more efficiency or a vice-versa conditions more efficiency, more-incentives motivate bankers substantially. THE PLACE MIX This component of the marketing mix is related to the offering of services. The two important decision making areas are making available the promised services to the ultimate users and selecting a suitable place for bank branches. The selection of a suitable place for the establishment of a branch is significant with the viewpoint of making the place accessible and in addition, the safety and security provisions are also found important. The banking organizations are not free to open a branch since the Reserve Bank of India regulates the subject of branch expansion but so far as the management of branch is concerned, the branch managers have option to select a place which is convenient to both the parties, such as the users and the bankers. In the Indian perspective, the protection to the bank’s assets and safety to the users and bankers need due weight age. The vulnerable area or regions need adequate provisions to make the branch safe. The management of office is also found


Enriching the job content of employees at all level (by reducing the drudgery of mundane operations and increasing the analytical content of their work). Incentives. the branch mangers are helpless and even the bankers have been found involved in the unfair practices. civic amenities and parking facilities can’t be overlooked. The furnishing. Another important decision making area is related to the offering of services. This helps them in improving the efficiency of even the inefficient people. • • • Having better and cost-effective control over operations. Generation of efficiency is substantially influenced by the quality of human resources. This draws our attention on the behavioral profile of bankers. a must in the fast changing environment. Improving the quality of decision-making. the people management has been include dint he marketing mix of organizations is general and the service generating organizations in particular. the place mix is found to be an important decision making area which requires due attention. inject life and strength to our efficiency but the instrumentality of sophisticated technologies start turning sour if the human resources are not managed in a right fashion. The bank professionals or a branch manager is required to be sure that whatever the promise have been made regarding the quality of services are not distorted. The public sector commercial banks need to assign on overriding priority to the development of quality people majority of the management of the experts have realized the significance of quality people in the development of an organization and the boardrooms are also found changing their attitudes. Not only the public sector commercial banks but almost all the public sector organization and albeit other government departments. The foreign banks and the private sector commercial banks reward for efficiency and at the same time also demotivate the inefficient bankers. deceleration in the rate of overall productivity and profitability or so. of course. inject efficiency and the organizations offering more incentives succeed in motivating the people. The development of human resources makes the ways for the formation of human capital. they need to assign due weight age to the ethical values. The first task before the banking organizations at the apex level is to overhaul the recruitment processes.significant with the viewpoint of making the services attractive. THE PEOPLE Sophisticated technologies. The process of identification and inculcation need to be managed carefully. It is against this background that a majority of the management experts make a strong advocacy in favour of developing quality people and late. of late. The front-line staff are rough and indecent. have been facing the problem of quality people resulting into inefficiency. While fixing criteria for selection. Thus. The RBI and the different public sector commercial banks are required to manage the distribution process intelligently and professionally. The education and training facilities are required to be innovated. no doubt. 41 . If the banking organizations sell the promises it is essential that the end users get the same without any distortion. both at macro and micro levels. The bankers in general and the front-line-staff in particular bear the responsibility of making available the services-promised to the ultimate users without any distortion often a gap is found generated by front-line-staff that makes an invasion on the image of bank.

However. which increases scope for equity withdrawal. It is the rise in confidence which encourages borrowing and consumers to run down savings.  ECONOMY MORE SENSITIVE TO INTEREST RATES With a fall in the savings ratio interest rate changes will have a bigger effect in reducing spending. However. Also. there is always a danger that a falling savings ratio can be a precursor to a boom and bust situation. some people argue a fall in the savings ratio is not a problem. The current account deficit could put downward pressure on the exchange rate in the long term. 42 . A fall in the savings ratio implies that consumer spending is increasing. often this is financed through increased borrowing. but.MACRO vs MICRO ECONOMIC ANALYSIS PROBLEMS FACED BY INDIAN ECONOMY o FALL IN SAVINGS RATIO The savings ratio is the % of income that is saved not spent. Therefore. Inflation has recently gone above 12%  BOOM AND BUST A fall in the savings ratio is usually accompanied by a rise in confidence. it is just a reflection of strong economy and booming housing market. This is now a potential problem in the India. higher rates will not be increasing incomes from savings as much. Therefore this will lead to deterioration in the current account. Inflation will occur when growth is faster than the long run trend rate. EFFECTS OF FALL IN SAVINGS RATIO  HIGHER LEVEL OF CONSUMPTION This results in increase in Aggregate Demand.  BALANCE OF PAYMENT With higher levels of consumer spending. This is because levels of borrowing are higher and therefore a rise in interest rates has a significant impact on increasing interest repayments. there will be an increase in imports. rising Aggregate Demand may cause inflation. The increase in AD will cause an increase in economic growth and lower unemployment.

India’s growing service sector and manufacturing sector would be adversely impacted by a global downturn. o DEPRICIATING INR Surge in crude prices has severely impacted current account deficit of the country. However.o INFLATION Inflation is posing a serious challenge to the economic growth of India. however we believe that the current challenging and uncertain macro-economic conditions does not lead Indian financials into a state of crisis. Japan and the US are entering into recession. interest rates and government finances has the potential to do so. In the last couple of months oil prices have surged by 45% from US$ 100 to US$ 145 (and now back to US$ 115). o RISE IN CRUDE PRICES How global crude prices would behave probably has no easy answers. The WPI inflation rate flared up during the period driven by significant increase in the prices of commodities. primary articles and manufactured products. M3 growth in the economy too continued to remain strong at 20% (in July’08). But continued rise in crude prices and its resultant impact on inflation. IMPACT OF ECONOMIC PROBLEMS ON INDIAN FINANCIALS The current macro-economic conditions are expected to result in o SLOWDOWN IN CREDIT GROWTH o IMPACT ON MARGINS OF BANKS 43 . the Indian stock markets have been hit by the global crisis. India currently imports 70% of its crude requirement. Falling house prices. and lower confidence could lead to a sharp downturn. with the worst still to come. Hence. resulting in pressure on government coffers on back of rising crude prices. o GLOBAL RECESSION It appears that Europe. well above the RBI’s comfort level of 17%. Since Jan’08 onwards.2% to hit a 13-year high of ~12%. inflation in the country has surged by 8. This coupled with the outflow of FII investments has resulted in INR to depreciate sharply against dollar further fueling inflation. Many argue that India’s growth is not so dependent on growth in the West. even though very small part of global crude price increase has been passed on to the Indian consumers. crisis in the financial system. crude price remains the key risk to our positive stance on the Indian financials.

This would curtail consumption. Indian banks’ fundamentals are relatively resilient with better risk management systems. This coupled with elections next year could lead to some postponement of capex plans of corporate. most of the banks had restrained from hiking lending rates despite significant monetary tightening. Significant portion of fixed rate loans would also get re-priced over the period of 12-18 months. leading to negative impact on demand for credit.7%. Given the expected negative impact on credit growth.0% currently and RBI has also discontinued with interest payment on CRR balances. Apart from hiking PLRs. interest rates are at elevated levels and risk premiums have increased. Similarly. The extent of the impact on credit quality would also be bank specific given the loan mix (retail vs. stronger recovery mechanisms (legal provisions) and with adequate capitalization and provisioning. sectors like real estate and SMEs. Many companies where crude forms a key raw material component are expected to get hit more severely. • PRESSURE ON CREDIT QUALITY Higher lending rates are expected to impact credit quality for the banking system. credit profile of corporate loan book and industry wise exposure. dramatically improved asset quality. Further higher rates will not only impact the profitability of Indian corporate but also impact IRRs of various proposed capex projects. 22% in FY08. which would impact economic growth adversely. Till June’08. corporate). Every 50 bps hike in CRR generally negatively impacts margins by ~5 bps.5% in FY07 to ~13% in FY08. SLR Ratio of the system has started rising since mid FY08 and currently stands at 28. retail loan growth has slowed down significantly from 26. where liquidity is tight. which are interest rate sensitive. Indian banks too are exercising caution while lending. banks have resorted to hiking PLRs in July/August by 50-150 bps to preserve their margins. banks are also resorting to reprising (in fact right-pricing) the loans that were sanctioned well below PLRs. 44 . proportion of unsecured lending. the banks tend to regain the pricing power. However on account of recent measures by RBI. This would not only help the banks to adequately price in risks but also help protect their margins. In fact in an environment. Credit growth of 18% in FY09E and 17% in FY10E vs. would face higher delinquencies if interest rates strengthen further by 100-200 bps. • IMPACT ON MARGINS OF BANKS During the past 18 months. As can be seen in the exhibit below.o PREASURE ON CREDIT QUALITY • SLOWDOWN IN CREDIT GROWTH While the rise in interest rates should lead to a moderation in demand for credit. airlines industry) might feel the stress due to the changing macro environment and rise in interest rates. CRR has increased by 400 bps to 9. Higher rates have particularly impacted retail loan growth. Even Certain sectors (like real estate. Risks and uncertainties in the system have increased given the higher crude and commodity prices and its inflationary impact.

a policy of “adequate financing of economic growth and at the same time the time ensuring reasonable price stability”. the need for appropriate adjustment in monetary and fiscal policies to suit the pace and pattern of planned development became imperative. namely: o Raising bank rates o Open market operations and o Variable reserve ratio 45 .. To come out of these problems RBI and ministry of finance and other relevant government and regulatory entities are taking various initiatives which are as follows. and o To control and reduce inflationary pressure in the economy. i.. The monitory policy since 1952 emphasized the twin aims of the economic policy of the government: o Spread up economic development in the country to raise national income and standard of living. OBJECTIVES OF MONITORY POLICY      PRICE STABILITY MONITORY TARGETTING INTEREST RATE POLICY RESTRUCTURING OF MONEY MARKET REGULATION OF FOREIGN EXCHANGE MARKET WEAPONS OF MONITORY POLICY Central banks generally use the three quantitative measures to control the volume of credit in an economy. • RBI MONITORY POLICY With the introduction of the Five year plans. This policy of RBI since the First plan period was termed broadly as one of controlled expansion. RBI helped the economy to expand via expansion of money and credit and attempted to check in rise in prices by the use of selective controls. Accordingly.e. Expansion of currency and credit was essential to meet the increased demand for investment funds in an economy like India which had embarked on rapid economic development.NECESSARY INITIATIVES TAKEN BY RBI & MINISTRY OF FINANCE TO TACKLE ECONOMIC PROBLEMS As most of economists feel that the most horrible problem which India is facing currently is inflation which has crossed 12%..

public borrowing. by themselves. In modern community. governments must simultaneously increase taxes that would effectively reduce private expenditure. They increase the general liquidity of the economy. and inflation can spread from one sector of the economy to another and from one type of goods and services to another. wealth is typically represented by claims in the form of securities. is a sort of public borrowing). tangible. there is no immediate and direct relationship between money supply and the price level. there is need to contract credit. In these circumstances. tax policy has been directed towards restricting demand without restricting level of production. play a useful role in controlling inflation. suggested a programme of compulsory savings. Additionally. and they are very close to being money. Therefore. and diversifying the flow of credit towards the most desirable needs of productive and growth-inducing sector. or near moneys. it is not so simple to control the rate of spending or total outlays merely by controlling the quantity of money. however. in an effect to minimise inflationary pressures. On the other hand. Such near moneys are highly liquid assets. restricting the flow of credit into the unproductive. Deferred pay indicates that the consumer defers a part of his or her wages by buying savings bonds (which. which are redeemable after a particular period of time. It can be cleared noted that during a period of full employment inflation. in conjunction with other measures. a reduction in public expenditure. In fact. inflation-infected sectors and speculative activities. It should be noted that the impression that the rate of spending can be controlled rigorously by the contraction of credit or money supply is wrong in the context of modern economic societies.. As a result. Along with public expenditure. the best course is to resort to credit control.However. Growth requires credit expansion but to check inflation. • FISCAL POLICY Fiscal policy is another type of budgetary policy in relation to taxation. bonds. there are various limitations on the effective working of the quantitative measures of credit control adapted by the central banks and. To curve the effects of inflation and changes in the total expenditure. When there is inflation in an economy. in controlling inflation moderate monetary measures. and an increase in taxes produces a cash surplus in the budget. of course. However. fiscal measures would have to be implemented which involves an increase in taxation and decrease in government spending. Keynes. monetary measures to control inflation are weakened. the size of the disposable income diminishes. as they are called. In a developing economy there is always an increasing need for credit. to that extent. such as deferred pay as an anti-inflationary measure. During inflationary periods the government is supposed to counteract an increase in private spending. For example. also the magnitude of the inflationary gap in regards to the availability of the supply of goods and services. excise duties or sales tax on various commodities may take away the buying power from the consumer goods market without discouraging the level of production. and public expenditure. some economists point out that this is not a correct way of combating inflation because it may lead to a regressive status within the economy. monetary restraints can. the aggregate demand in relation to the limited supply of goods and services is reduced to the extent that government expenditures are shortened. are relatively ineffective. as is normally conceived by the traditional quantity theories. It is known that when more taxes are imposed. etc. this is sometimes called forced savings. In such a encounter. this may lead to a further rise in prices of goods and services. In some instances. Thus. private savings have a strong disinflationary effect on the economy 46 . drastic monetary measures are not good for the economic system because they may easily send the economy into a decline.

without any harmful effects of any kind that are associated with higher taxation. In addition. such as. monetary and fiscal controls may be used to repress excess demand but direct controls can be more useful when they are applied to specific scarcity areas. are relatively scarce. However. this is possible only to a limited extent. Therefore. exports may also be reduced in an effort to increase the availability of the domestic supply of essential commodities so that inflation is eased. In general. The function of price control is a fix a legal ceiling. particularly. • DIRECT MEASURES Direct controls refer to the regulatory measures undertaken to convert an open inflation into a repressed one. which is mainly responsible for inflation. in order to prevent an increase in the circulation of money. antiinflationary policies should involve varied programmes and cannot exclusively depend on a particular type of measure only. beyond which prices of particular goods may not increase. It should be noted that it is only government borrowing from non-bank lenders that has a disinflationary effect. Furthermore. along with price control. depending upon the balance of payments situation. Under price control. 47 . therefore a combination of fiscal and monetary tools can work together in achieving the desired outcome. to make the commodity more available to a larger number of households. public debt may be managed in such a way that the supply of money in the country may be controlled. include devices for increasing savings. Ceilings on wages and profits keep down disposable income and. Anti-inflationary debt management also includes cancellation of public debt held by the central bank out of a budgetary surplus. Rationing has the effect of limiting the variety of quantity of goods available for the good cause of price stability and distributive impartiality. therefore the total effective demand for goods and services. The main function of rationing is to divert consumption from those commodities whose supply needs to be restricted for some special reasons. can be partially offset by covering the deficit through public borrowings. even though there may be a pressure of excessive demand forcing it up. government may have to enforce rationing. A strong savings drive reduces the spendable income of the consumers. inflation is suppressed. Government policy should therefore. When ceiling prices are fixed and enforced. rationing becomes essential when necessities. The government should avoid paying back any of its past loans during inflationary periods. it may be necessary to apply a wage-profit freeze. food grains. Another control measure that was suggested is the control of wages as it often becomes necessary in order to stop a wage-price spiral. Such regulatory measures involve the use of direct control on prices and rationing of scarce goods.and an increase in these is an important measure for controlling inflation. the effects of a large deficit budget. it means prices are not allowed to rise further and so. restrictions on imports may also help to increase supplies of essential commodities and ease the inflationary pressure. Similarly. During galloping inflation. As a result. producers cannot raise the price beyond a specified level. Fiscal policy by itself may not be very effective in combating inflation. On the other hand. such as food grains. In times of the severe scarcity of certain goods.

81 645.29 Mar '07 12 mths Mar '08 12 mths 102.14 1.649.51 48 .67 13.539. how ING Vysya has done financially over the last three years(20052008).263.71 1. and cash flow statement of ING Vysya.39 25.06 394.41 111.32 706.92 Mar '08 12 mths Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities & Provisions Total Liabilities 90.52 1.34 676.60 110.72 90.766.28 15.335.418.78 817.00 901.00 0.231.45 14.67 Mar '06 12 mths Cash & Balances with RBI Balance with Banks.54 1.747.00 0.87 2.65 281.29 16.72 0. profit and loss account.53 4. We will calculate all the financial ratios including the banking ratios also.66 20.442.372.535.53 921.293.286.31 277.73 2.67 109.304.976. to show how ING Vysya fair up against its competitors.262.89 11.47 102.498.90 0.82 429.55 6. BALANCE SHEET FROM THE YEAR (2005-2008) Mar '06 12 mths Mar '07 12 mths 90.00 1.107.FINANCIAL ANALYSIS This section will show.23 14.00 0.06 1.47 0.26 1.87 19.59 843.527.81 681.21 945. To do that I will be using the last three years balance sheet.81 21.23 383.90 90.33 286.17 4. Money at Call Advances Investments Gross Block Accumulated Depreciation Net Block 841.02 293.68 10.920.323.256.55 16.019.

95 Mar '08 12 mths 1.24 794.93 279.39 0.29 90.00 645.539.00 0.57 1.31 1.57 2.00 572.16 37.31 238.17 90.00 5.49 116.412.986.69 139.28 3.06 25.67 10.766.70 38.39 140.47 0.54 0.06 0.in Rs.013.033.65 19.43 190.74 741.90 32. Cr.17 PROFIT AND LOSS ACCOUNT FROM 2005-2008 Profit & Loss account of ING Vysya Bank Mar '06 12 mths ------------------.27 1.20 634.944.182.099.38 248.69 Mar '06 12 mths 859.10 0.680.222.13 100.91 1.00 -34.00 576.20 0.03 Mar '07 12 mths 88.36 3.18 121.98 255.70 1.00 49 .00 18.06 Mar '08 12 mths 154.44 418.561.649.60 -25.51 125.95 0.30 109.401.99 0.06 16.42 2.01 Interest Earned Other Income Total Income Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses 1.Capital Work In Progress Other Assets Total Assets Contingent Liabilities Bills for collection Book Value (Rs) 112.20 229.05 302.10 109.52 1.21 1.25 234.959.91 0.48 170.37 Net Profit for the Year Extraordinary Items Profit brought forward Total Preference Dividend Equity Dividend 9.30 17.00 1.44 173.286.00 15.096.850. ------------------Mar '07 12 mths 1.19 161.403.58 37.462.

21 53.00 0.18 15. The most common ratios that indicate the extent of liquidity or lack of it are 1) CURRENT RATIOS 2) QUICK RATIOS 3) CASH RATIOS 50 .23 -35.00 100. Cr.67 -74.61 1.33 RATIO ANALYSIS LIQUIDITY RATIOS Liquidity ratios measures the ability of the firm to meet its current obligations (liabilities).29 -25. ------------------Mar '07 12 mths 127.44 90.33 1591.17 -26.00 2.37 1123.50 1123.87 468.62 177.76 Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents 21.85 0.55 202.63 308.84 0.01 6.85 0.41 8.53 175.in Rs.00 1.55 64.12 -17.12 15.00 139.52 -202.00 17.00 1.36 CASH FLOW STATEMENT Cash Flow of ING Vysya Bank Mar '06 12 mths ------------------.50 109.10 9.91 18.70 Mar '08 12 mths 251.98 103.38 1593.46 1426.90 286.Corporate Dividend Tax Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) Transfer to Statutory Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt Balance c/f to Balance Sheet Total 0.00 0.78 6.70 3184.84 1114.06 1591.

But in the years 2006-07 and 2007-08 the current ratio of the bank has been improving.66 2006-07 2. NET WORKING CAPITAL RATIOS Net working capital is the difference between current assets and current liabilities. This shows that in 2005-06 the bank was not in the position to pay it current obligations.03 1. For ING VYSYA the current ratios for last three years are. This shows that the bank has higher safety now.42 As a conventional rule current ratios of 2: 1 is considered satisfactory.02 2007-08 2. Looking at the current ratios of ING Vysya we can see that in the year 2005-06 the current ratio was 1. It is considered that the bank having larger NWC has the greater ability to meet its current obligations. because there are more current assets than current liabilities.CURRENT RATIOS Current ratio is calculated by dividing current asset by current liabilities.19 From the table above we can see that the net working capital ratio of the bank has been increasing. which is well below the standard. 51 . as it can pay its current liabilities.66. which shows that the bank is much more secured now. 2005-06 CURRENT RATIOS 1.11 1. Net working capital ratios = NWC Net assets 2005-06 2006-07 2007-08 NWC ratio 1. Current ratio = current asset Current liabilities.

in 2005-06 the bet profit margin of ING Vysya was just 8. The higher the net profit margin is. A low profit margin indicates a low margin of safety: higher risk that a decline in sales will erase profits and result in a net loss 2005-06 NET PROFIT MARGIN 2006-07 2007-08 .7 7.7% but in 2006-07 and 2007-08( 67% and 78%) the NPM has constantly been increasing. However. This 52 . It is difficult to accurately compare the net profit ratio for different entities. The profit margin is mostly used for internal comparison. so that comparison of one with another can have little meaning.PROFITABILITY RATIOS Profitability ratios are used to asses a business ability to generate earnings as compared to expenses over a period over a time. Individual businesses' operating and financing arrangements vary so much that different entities are bound to have different levels of expenditure.87 6.8 As can be seen that from the data. the more effective the company is at converting revenue into actual profit. This number is an indication of how effective a company is at cost control. since such companies are generally subject to similar business conditions. The various profitability ratios that we will use are 1) Return on net worth 2) Interest spread 3) Earning per share 4) Net profit margin NET PROFIT MARGIN Net profit divided by net revenues. the net profit margins are also a good way to to compare companies in different industries in order to gauge which industries are relatively more profitable. The net profit margin is a good way of comparing companies in the same industry. often expressed as a percentage.

INTEREST SPREAD Interest spread is the difference between the average lending rate and the average borrowing rate for a bank or other financial institution. but after that in the year 2006-07 the bank’s ROE/RONW started increasing. If a bank's lending was exactly equal to its borrowings (i.36% was returned in the form of earning. ROE/RONW = net income × 100 Shareholder’s equity 2005-06 RONW 1. deposits plus other borrowing) the two numbers would be identical. It is also called return on equity.e. It reveals how much profit a company generates with the money a equity shareholders have invested.11%). but at the same time its lending is constrained by reserve requirements. It is: interest income ÷interest earning assets) .11% 2006-07 9. bank also has its shareholder's funds available to lend. This shows that the bank is safe and there is lower risk. This means that for each rupee invested by the shareholder’s 9.(interest expense ÷interest bearing liabilities This is very similar to interest margin. 53 . In reality.shows that the bank is converting its revenues into profit. In 2007-08 the bank’s RONW increased to 11%. RETURN ON NET WORTH/RETURN ON EQUITY Return on net worth is used as a measure of a financial institution’s profitability.36% 2007-08 11% As can be seen from the table the return on net worth or return on equity was very less in 200506(1.

BALANCE SHEET RATIOS In banking the two most important ratios that are looked very closely are 1) Capital adequacy ratio 2) Return on assets 3) Loan/advances funds% CAPITAL ADEQUACY RATIO CAR is a ratio of bank’s capital to its risk. In 2006-07 the interest margin came down from the previous year which means the bank didn’t made money as compared to last year. operational risk.24 We can see in the table that the interest margin has been swinging. Banking regulators in most countries define and monitor CAR to protect depositors. which protect the bank's depositors or other lenders. this is an indicator of profitability and proves that the bank is making money.Changes in the spread are an indicator of profitability as the spread is where a bank makes its money 2005-06 INTEREST SPREAD 4. National regulators tracks banks CAR to ensure that it can absorb reasonable amount of loss and are complying with the banking statutory capital requirements. etc. In the simplest formulation.23 2007-08 5. But in 2007-08 the interest margin went to 5. thereby maintaining confidence in the banking system The percent threshold (9% in this case. a common requirement for regulators conforming to the Basel Accords) is set by the national banking regulator. 54 . a bank's capital is the "cushion" for potential losses.51 2006-07 4. 9% is for the existing banks. Capital adequacy ratio is the ratio which determines the capacity of the bank in terms of meeting the time liabilities and other risk such as credit risk.24.

The formula for return on assets is: 2005-06 Return on assets . Banks are financial intermediaries and lend the funds of depositors who themselves do not want to lend in the business directly. The ratio is significantly low as compared to other private banks. Lending of funds to traders.12 11. Calculated by dividing a company's annual earnings by its total assets.2005-06 2006-07 2007-08 CAPITAL ADEQUACY RATIO 9. ROA gives an idea as to how efficient management is at using its assets to generate earnings. enterprises constitutes the main business of banking.13% 2007-08 .52% As can be seen from the table that the return on assets has been increasing as the years have gone by. RETURN ON ASSETS An indicator of how profitable a bank is relative to its total assets.31 From the table it can be seen that ING Vysya has always had the minimum requirement capital adequacy ratio. but it is catching up on it. Sometimes this is referred to as "return on investment". business. LOAN / ADVANCES FUNDS Loans/advances constitute a major chunk of a bank’s assets.05% 2006-07 . 2005-06 2006-07 2007-08 55 . ROA is displayed as a percentage. So in that point it can be concluded that the bank has always been safe. These also yield returns by way of interest income which contributes the largest percentage of bank’s profits.32 10.

40 crores to invest in G-secs. The DCR is calculated by dividing the property's annual net operating income (NOI) by a property's annual debt service. Annual debt service is annual total of your mortgage payments (i. 60 crores to create loan-assets. Both the options have a tendency to push up interest rates in the economy. it can raise yields to make investment by banks in G-secs attractive. And Bank X has only Rs. Consider Bank X which has deposits worth Rs. The more the lending percentage will be the more will be profit. but not your escrow payments). One. DEBT COVERAGE RATIOS Also known as the Debt Service Coverage Ratio (DSCR). The higher the ratio. Yields on G-secs serve as a benchmark for interest rates on other debt instruments. the debt coverage ratio measures your ability to pay the property's monthly mortgage payments from the cash generated from renting the property. thus. what will the government do? After all. the Indian government is the largest borrower in the domestic credit market. The government borrows by issuing securities (G-secs) through auctions held by the RBI. That means Bank X has used deposits worth Rs. If more banks like X have lesser money to invest in G-secs. Or two. it needs to raise money to meet its expenditure. force the RBI to take the securities into its books. Bankers and lenders use this ratio as a guide to help them understand whether the property will generate enough cash to pay rental expenses and whether you will have enough left over to pay them back on the money you borrowed. the higher the loan-assets created from deposits.Loan / advances funds % 73. Only Rs. lend to the government by investing in these G-secs. 40 crores is available for other investments. The government has two options. A 56 . Some experts contend that a high creditdeposit ratio could lead to a rise in interest rates.12 78. The various debt coverage ratios are 1) Credit deposit ratio 2) Investment deposit ratio 3) Cash deposit ratio CREDIT DEPOSIT RATIO It is the proportion of loan-assets created by banks from the deposits received.e. Now. 100 crores and a credit-deposit ratio of 60 per cent.1 81. Banks.3 It can be seen from the table above that ING Vysya’s loan/ advances funds I % terms have been increasing. This is a good data. Because the main profit of loans and advances is to earn profit by way of interest spread. the principal and accrued interest.

Cash consists of cash in the vaults of banks. In India. The regulatory authorities of central banks would like to fix minimal cash ratios and to vary it according to macro policy requirements. pushes up interest rates on the latter. by doing so.18 2006-07 73. higher interest rates. it often tends to pay some interest on the excess cash maintained with it. 2005-06 CASH DEPOSIT RATIO 5. and in banking theory.82 2006-07 6. but still it is on the higher side. This would prompt investors to demand higher returns on debt instruments. So it can bee see that in 2007-08 the debt coverage ratio has been less than 2006-07. A high debt coverage ratio means higher interest rate for the bank. the RBI releases fresh money into the system. In other words. the cash deposit ratio of ING Vysya has been at satisfactory level. 2005-06 DEBT COVERAGE RATIO 69.12 As it can be seen from the data. ``too much money will chase too few goods'' in the economy resulting in higher inflation levels.21 2007-08 70. 57 . But why should interest rates rise if RBI takes G-secs into its books? Because.12 It can be seen from the table that the debt coverage ratio of ING Vysya has been moving up and down. the cash-deposit ratio is a measure of the liquidity of banks' assets.94 2007-08 9. CASH DEPOSIT RATIO Historically. In theory. This is with a view not to hurt the earnings of banks too much in the context of regulatory requirement. and balances with the Reserve Bank of India. Banks like to keep the cash ratio higher than the minimum for various understandable reasons. thus. And it has contantantly been increasing. If the money so released is large. cash does not earn banks any interest but when the RBI moves up the ratio.rise in the former. there is a minimal requirement of 3 per cent for the cash-deposit ratio.

11 23158.COMPARISION WITH KOTAK MAHINDRA Bank Name ING Vysya Kotak mahindra Last price 211 668 Market cap 2165. The various profitability ratios that we will use are 1) Return on net worth 2) Interest spread 3) Net profit margin NET PROFIT MARGIN 2005-06 2006-07 2007-08 58 .45 3065.78 RATIO ANALYSIS OF KOTAK MAHINDRA PROFITABILITY RATIOS Profitability ratios are used to asses a business ability to generate earnings as compared to expenses over a period over a time.8 276 Total assets 31858.70 Net interest income 2239.14 Net profit 188.34 28711.

NET PROFIT MARGIN 17.3 This shows that the interest margin of kotak Mahindra is going up for consecutive years. The reason can be that the bank is earning a good margin in the interest rate. RETURN ON NET WORTH/RETURN ON EQUITY ROE/RONW = net income × 100 Shareholder’s equity 2005-06 RONW 14.2 2006-07 11.55 2006-07 5.06 2007-08 6. That is the difference between the average lending rate and the borrowing rate.12 15.7 As can be seen from the table.65 15. the return of net worth is going down which suggests that the net income generated by the bank is very low as compared to the equity invested. the reason can be that they are not able to convert revenue into net profit. This also shows that the bank is making money. 59 . INTEREST SPREAD 2005-06 INTEREST SPREAD 4.18 2007-08 8.12 As can be seen from the table net profit margin of Kotak Mahindra has been decreasing. That’s the reason the net profit is going down and the net profit margin is showing low.

12 18.BALANCE SHEET RATIOS In banking the two most important ratios that are looked very closely are 1) Capital adequacy ratio 2) Return on assets 3) Loan/advances funds% CAPITAL ADEQUACY RATIO 2005-06 2006-07 2007-08 CAPITAL ADEQUACY RATIO 11. LOAN / ADVANCES FUNDS 2005-06 Loan / advances funds % 95.23 13. This means that the company is not able to earn profit by the way of interest spread.3 The advances% has been decreasing for kotak. The average CAR which national banking regulator has set is 8%. RETURN ON ASSETS The formula for return on assets is 2005-06 2006-07 2007-08 60 .31 The capital adequacy ratio of kotak has been constantly increasing.34 2006-07 90 2007-08 86. This shows that kotak is less risqué.

but it is catching up on it.23 2007-08 96 The credit deposit ratio of kotak mahindra is too much as compared to other banks. The average for all banks is around 66%. the cash deposit ratio of ING Vysya has been at satisfactory level.5 As can be seen from the table that the return on assets has been increasing as the years have gone by. CASH DEPOSIT RATIO 2005-06 CASH DEPOSIT RATIO 6 2006-07 6.4 4. The ratio is significantly low as compared to other private banks.5 2007-08 8. A higher credit deposit means higher interest rate. 61 .Return on assets 3.68 `` As it can be seen from the data.43 2006-07 94. And it has constantly been increasing. DEBT COVERAGE RATIOS CREDIT DEPOSIT RATIO 2005-06 DEBT COVERAGE RATIO 98.6 3.

Following is the list of necessary documents required to log in a case  Duly filled application form.  Provisional financials of last year (if audited is not available)  Bank statement of last six months(through which bank A/c the firm does the maximum banking)  ITR (Income Tax Return) of Promoter/ Property owner. the marketing team of the bank gets the cases on the basis of their references and the data in their hand .After that the marketing will handle over the case to the credit department along with the necessary documents for further process of the case.  Audited financials of last three years.  CIBIL FORM 62 .  Vintage proof.  Sanction letter of prevailing limit (if any). 5) Sanction letter. STEP FIRST: LOGIN OF THE CREDIT FILE In this very first step. 2) To watch out that weather the case is doable or not. 4) Appraisal by the risk department. 3) Preparation of the note.PROJECT CREDIT APPRAISAL PROCESS 1) Login of the credit file.

tangible net worth)  CURRENT RATIO of the company  MPBF (Maximum Permissible Bank Finance) 63 . In this dedupe checkup we do a check out weather there is any overdue or default on the borrower side or not. In this very step the dedupe checkup is to be done. Following are the some of the main parts or ratios on which the bank gives more emphases while to judge that the case is doable or not.  LEVERAGE of the company must have the leverage of 6 according to the bank norms(i.  Counts of credit transactions  Total amount of credit transactions (%of the ratio to turnover)  Counts of debit transactions  Total amount of debit transactions (%to the ratio of expenditure)  Number of INWARD cheque returns  Number of OUTWARD cheque returns  Timely payment of EMI’s and Interest. Once the dedupe checkup is clear the credit team prepare the finspred (software for analyzing the financials) for the case with the help of the audited financials . STEP TWO: DECISION OF GO-NO-GO CRITERIA BY THE CREDIT DEPARTMENT Once all the login documents are completed the process of checking of do ability (GO/NO GO) is done.Once all the documents are completed for log in .e. TOL/TNW total outstanding liability.The case is shown in MIS as a log in by credit department.We can check the track record with the help of the following things.And also check out the track record in the bank statement of client . After preparing the finspread on the basis of certain ratios and track record of bank statement the credit team decides that the case is doable or not.

Detail of Personal guarantee.) . 64 . Once the note is prepared the case is sent to the centralized risk management department (CRMD). NOTE WRITING INCLUDES THE FOLLOWING  Business background  Process of business.the risk department is totally independent from credit department the credit department sent the prepared note to risk department to examine the proposal.Rate of interest (for fund based facility) and rate of commission (for non fund based facility) and processing fee .  comment on financial statement of the company  Future plan of the company and comments on the projection.Amount of Limit to be sanctions . -Other terms & conditions as required. EBIDTA rate.Type of limit to be sanctioned (fund based – CC / OD/ TL/ PC/ WCDL etc & non fund based – LC/BG/For ex limit etc. PAT margin) THIRD STEP: NOTE PREPARATION Once the case is to be approved as doable a set query is send to the marketing team for further movement of case or we can say for the preparation of note In the note the credit team summarizes up all the details of the borrower. DSCR (debt security coverage ratio) in case of term loan  Profitability ratio (like gross profit margin.  Bank statement analysis  Promoters background  Market reference of the client  Industry scenario  Detailed terms & condition of the sanction including: .Detail of security (primary and collateral) .  And other information specific to case to case.

and send a list of query to the credit department. the case is presenting by the credit department along with marking department to the appropriate author for the sanction of the case.STEP FOUR: APPRAISAL BY THE RISK DEPARTMENT In this step the risk department scrutinizes the whole proposal and they bring out the observations. If case is withdrawn for modification for the adding of some information or document. the authority decide to approve / reject or withdrawn for modification. STEP FIVE: SANCTION After the uploading of the case. METHODOLOGY USED Meet the customer Positive Take KYC Documents& Application form Positive Initial Dedupe Check Positive Application Rejected Check the Banking Negative Application Rejected 65 . The credit department along with mark modifies the proposal as required by authority and again uploads the same and discuss with the authority to get it approved or rejected. Once the case got sanctioned minutes are generated. As and when credit department will get a list of query raised by the risk department they replies on the same with help of the marketing department start working on them to solve out the quires along with the help of marketing department. During the presentation of the case various observation are raised by the appropriate sanction author and on the basic of discussion. After solving all the observation the case s uploaded for sanction to the appropriate authority as per the delegation of power by the bank. On the basis of minutes the CAL (Credit Agreement Letter) are prepared and issued to customer.

Positive Audited Financials Test Application Rejected Deviation Check P ositive Application Rejected Internal verifications Decision on disbursal of loan Approval By ZCC Application Rejected Positive Discussion on terms & conditions on loan to be sanctioned between client& bank Not accepted by the customer The credit appraisal process at ING Vysya bank The credit appraisal process at ING Vysya bank is considered very thorough and conservative the bank undertakes the above steps to complete the credit appraisal process. if the RM are 66 . Meet the client: The bank has appointed various Relationship managers( RM) and executives who find the clients with credit requirements for their business. 1.

4. the bank tries to check the existing performance of client with the other banks. Deviation check: The bank after checking the financial soundness of the company goes for the verification of the deviation check of policy compliance. 2. if any in case of major deviations the case is presented in front of the zonal credit committee. The financial viability of the company is checked on various parameter as mentioned. KYC documents as mentioned in the policy guidelines are Know your customer(KYC) the customer can be best known with his financials and other vintage proofs mentioned in the requirement list. their decision stands the final verdict on the approval f the case. 3. Internal Verification: The bank through its various sources makes a complete thorough investigation of the handling of business of the clients. Take KYC Documents& Application form: The RM after the first course of interaction with the client asks for the various document required to appraise the project.satisfied with the client and its expectation with the bank the case goes to the regional office for a complete check and evaluation. Then this is also a deviation and if there is over utilization of the limit on all the days then this calls for accountability by the client. Check the Banking: The first thing the bank checks is the banking of the existing limit account if any. Audited financial test: The bank under takes a complete check of financials as mentioned in the requirements. and in case more number of inward returns due to in-sufficiency of funds. these audited financials are put in finspread software of the bank and then projections are made on the basis of financials and then various profitability ratios are analyzed and the financial soundness of the company is analyzed. The bank also checks the client in RBI defaulter list. 9. Initial Dedupe Check: This is better known as initial de-duplication checks in this the bank checks the credit reporting of the client whether he holds any over-dues etc. 8. 5. Decision on disbursal of loan: When the case is presented to risk department it analyses the variety of risk involved in the sanctioning of loan if it crosses the parameters 67 . this enables the bank to make sure that the client is not forging with the financials of the company. 6. 7. Approval by ZCC: If the credit limit is below Rs5oo lakhs then the approval is sought by Zonal head of the business banking and if the amount exceeds the above stated amount then the case is first discussed by ZCC and is then presented on ECC(electronic credit committee) depending upon the policy compliance failed by the client.

then the possibility of disbursal of loan declines then the ZCC makes its final approval on the limits required by the client and the limit deserved by the client. when the client agrees on all these terms then only the case reaches the sanctioning stage. Discussion between client &Bank on approval: The banks proposes its terms and conditions to the client and the amount of loan that is approved to the client at what rate of interest and what proportion of collateral is kept by the bank. 10. the bank makes it final way to the approval of the loans. PROJECT DETAILS: 68 .

Date of sanction: 23-06-09 Limits valid till:-30-06-10 BORROWER BACKGROUND  Sahib Textile Pvt Ltd has been promoted by the Sahib group and was incorporated in July 1994. The fabric is also purchased through brokers.f 01-04-07. merchandising of fabrics. dying and printing as and if required and sells to same customers. Currently the company is engaged in the wholesale trading of fabrics. wholesale and retail of fabrics and have maintained a good financial track record of profits and turnovers. Calcutta and Bombay. Limit requirement: Rs. M/s SDM Fabrics was enjoying working capital limits in tune to Rs. Ltd. Before merger. Sahib Textile Pvt. Ltd. Other jobs like dyeing or printing on grey fabric are done on job work basis. Earlier the company was engaged in doing embroidery job mainly for its sister concern M/s SDM Fabrics Pvt.e. Ltd. Only embroidery work to be done on fabrics is done by Sahib Textile P Ltd.0 lacs from IVBL. Crepes. 425. The Sahib group of companies/concerns is engaged in manufacturing of embroidery cloth. Jacquards. Gurudwara Road.e. Karol Bagh. Now the same is being extended to M/s Sahib Textiles Pvt. WEA Laxmi Palace Hotel Building. Type of Firm: Private Limited Company Kind of business: Manufacturing & Wholesale trading of fabrics Established in: July 1994. Other jobs like dyeing or printing on grey fabric are done on job work basis After merger the company procure the material from the same suppliers. 110005 is owned by the company. which got merged in Sahib Textiles Pvt.       69 . Woven and Embroidered fabrics etc under the registered trademark of "TACFAB".Company name: Sahib Textiles Pvt. presently consisting of two firms/companies is engaged in the business of wholesale trading of fabrics for the last 40 years under the registered trademark of Tacfab. Ltd purchases fabrics in SDM Fabrics Pvt. The Sahib Group. get it embroidered and other job works i. Embroidery work was being done on fabrics by Sahib Textile P Ltd. The company is into wholesale trading of ladies dress material like Georgette. Ltd from textile mills in Surat.425 lacs. Ltd w. The registered office of the company is located at 6/65.

Narela Road.77 sq. with a carpet area of 5377. Mumbai: Building 13Ab. DIRECTOR BACKGROUND  Surjit Singh: aged about 63. Kundli. This place is also being used as BRANCH OFFICE of the company. is the Managing Director of the company. yards owned by the company. Chandni Chowk owned by the directors. He is a prominent member of the society and is the chairman of two well-known public schools in Delhi. Surjit Singh is well supported by his sons. Both have more than 10 years of experience in the industry. Manufacturing unit of the company is located at Khasra No 74. The directors have combined net-worth in excess of Rs. Mumbai. Katra Subhash. details for which is given below: Sanjay Gandhi transport Nagar: This place is used as packing and selling point. located at Sanjay Gandhi Transport Nagar. Kurla Andheri road. He has been associated with the family business for the past 12 years. all 3 are at Kundli. He has experience of about 40 years in this line of activity. Harjot Singh and Mr. Shalimar Bagh.     The goods are then packed and sold from all these centres. is also the director of the company. 1000 lakhs. After embroidery and other job works like dying or printing. Harjot Singh. The company gets the embroidery done on fabric. fabric dispatched to company’s 3 packing and selling pints. The company is having staff strength of 200 people to handle all the working of the company. Presently the company is equipped with 3 embroidery machines. Mr.  Satnam Singh: aged 39. Satnam Singh who are also directors in the company. Chandni Chowk and Mumbai. Same place is also being used as CORPORATE OFFICE of the company. District Sonipat Haryana. The soft copies of the pattern are loaded on the machineries and embroidery done on fabric. gala 11. New Delhi. aged 37.  70 .Samhita Warehousing Complex. is the director of the company and has experience of 15 years in this line of activity. Ashok Vihar and Jaspal Kaur Public School. Mr. namely Mata Jai Kaur Public School. Op Haryana Power House. Chandni Chowk: 4805-10. various packing machines.

25 lacs from the customer.71% - 9.63% 28. iv) The market for ladies dress material is steadily growing with the demand of more innovative and unique designs in the market. Age. HUF Harjot Singh Takkar Total 10. Experience. Calcutta.00% - Surjit Singh Takkar. Relationship Experience The group is banking with us from last 3 years and was also enjoying working capital facilities from us. Ownership And Management Held by %age as on Board of Directors.B. 71 . 59. Qualification - Relationship Position Satnam Singh Takkar Surjit Singh Takkar Harcharan Singh Takkar 22. the Sahib group has established its name in the market and is well reputed in this line of business. RELATIONSHIP/BUSINESS RATIONALE i. Even with the ever-changing fashion in this line of activity and pressure from competitors.001% Director Director Director Director - Rasnapreet Preet kaur Arshiya Singh 17. ii.00% 100% - CREDIT BASE The company procures material from textile mills based at Surat.50% 12.5 lacs from the customer. 4. iii) We shall be earning a gross interest income of appx Rs.15% 0. Mumbai and further sells to other retail traders. Business Rationale i) The group is banking with us for the last 3 years and the conduct of the accounts is good ii) We shall be charging processing fee of Rs.

88 0.00 425.72 10.00 210.61 588.54 2.24 62.57 101.21 174.19 108.26 0.71 1.71 0.374.00 161.20 59.528.77 71.32 60 94 18 4.11 5.60 212.27 0.70 236.643.52 3.32 72 .58 0.85 0.00 30.88 588.83 655.86 1.94 351.07 0.22 1. 11) Non Current Liabilities 12) Fixed Assets 13) Current Assets a) Stocks b) Debtors c) Cash & Bank Bal.00 30.01 467.08 1.00 1.45 0.92 55.00 68.FINANCIAL ANALYSIS OF CLIENT Particulars Previous Year Actual (2006) 476.08 56 111 36 7.58 498.392.71 261.74 34.15 25.10 34.89 12.65 91.59 7.95 40.925.87 144.00 28.96 150.39 57 90 22 4.88 1) Sales 2) PBDIT 3) Interest 4) Depreciation 5) Taxes 6) PAT 7) Capital 8) Unsecured Loans 9) Loans from Other/Our Banks a) Term Loans b) OD/CC 10) Current Lia.26 8.71 984.480.00 0.79 0.19 1.06 0.00 68.42 50 81 44 3. In current a/cs 14) Non CA 15) Current Ratio 17) TOL/TNW (without USL) (With USL) 18) Inventory Turnover 19) Debtors Turnover 20) Creditors Turnover 21) NP margin 22) EBIDTA margin 2.65 68.41 107.46 8.53 581.230.86 185.470.199.15 15.48 775.00 33.95 0.40 16.10 0.00 93.00 1.29 1.07 18.00 552.62 0.00 0.54 1.54 2.70 700.00 23.77 113.00 165.00 45.72 41.00 0.07 0.00 1.63 249.29 Previous Previous Current Next Year Year Audited Year Projection (2008) Audited s (2010) (2009) Actual (2007) 492.85 10.80 5.19 8.33 19.87 664.90 387.52 2.00 0.22 9.48 700.95 13.39 104.00 0.00 136.220.903.00 5.00 265.00 588.00 0.52 3.00 425.07 82 130 32 7.00 1.

572. Current Ratio: The current ratio (3.96 TOL of the company comprises of sundry creditors.2 in FY06-07.7% due to decrease in Sales and General expenses from 25.4%.9 in FY07-08 due to increase in COGS and further EBIDTA margins have again decreased to 8.26 8.e. The company is maintaining stock turnover days of 50 days in FY08-09.00 387.80 lacs in FY07 showing an increase of 3.08 588. 5643.71 0. It was at Rs. 990.9% (FY08-09).77 lacs till Dec 08 and is expected to achieve turnover of Rs. 5374.Current Year Performance: The company has already achieved turnover of Rs. Profitability: The EBIDTA Margins of the company was at 19. out of which the company has already achieved 80% of sales.5%. 5643.65 lacs in FY06. i. The same is expected to be at 8.6% (FY07-08) to 11. The PAT margins of the company are following the same trend. which are fabrics. The stock of the co. Further the same has been projected at Rs.77 lacs till Dec. RISK APPRAISAL 73 . 476.4501.71 FY08-09 984. 492.88 1. In FY08 the company has achieved turnover of Rs. includes cost of raw material.0 by FY09.29 359.19) of the company is at comfortable level. which increased to Rs.55 FY07-08 387. Debtor’s turnover days for FY07-08 were 130 days. Rs. which decreased to 81 days in FY08-09.0 lacs in FY09. Financial Comments: Turnover: The turnover of the company consists of sale of fabric and is showing increasing trend in all financial years. working capital bank finance TOL/TNW of the company is satisfactory in all years.e.11 lacs i.8% in FY09-10. The Creditor Turnover days are lying in between 30-45 days. 4501. Leverage: TNW comprises of: Particulars Capital Unsecured Loan TNW FY06-07 351. decreased to 18.

iv. No risk is envisaged with the lending. Specific Purpose of Asset Collateral 74 . Ashok Vihar and Jaspal Kaur Public School. the key person behind the success of the group has proven management capability. He is chairman of two well-known schools in posh North Delhi . the group has good reputation in the market and proven track record. ii. Surjit Singh is fully supported by his two sons . ING Vysya Bank’s Reputation Risk There are no risks associated with the moral or ethical issues.  Being in this line of business for so many years. Management Risk Surjit Singh. New Delhi. Management set up of the group is quite strong. We perceive low risk in acceding to the request of the company as the company has good track record of cash flow generations.namely Mata Jai Kaur Public School. Raw material souring/ availability. Country Risk No country risk is associated with the lending. Regulatory Risk The company complies with all significant statutory and regulatory requirements and no risk is associated with the same.  Sales have been on the increase and group is well placed to tap the growing consumer market. product features i. Performance Risk1 1Under Performance Risk cover Technical Know-how. vii. Product delivery capabilities and Competition comparatives – cost.Business Risk and Future Outlook Risk lies in the following situations:  The group is in this business for the last 40 years and the directors have rich experience in this line. Industry Sector Concentration There is no major exposure on the same sector in North India.Satnam Singh and Harjot Singh. Environmental Risk The company is into trading only hence no environment risk in perceived. Shalimar Bagh. vi. who are also directors of the company. v. iii. Structure Risk The customer shall be offered cash credit limit and does not entail any structural risk.

The commercial property offered to us located at Ground floor. The credit department thoroughly analyses the credit requirement of the company and the capacity to service the debt. Financial Risk The turnover of the company is on increasing track. promoters are into this business from last 40 years. Ltd. Opportunities:  The market for ladies dress material is steadily growing with the demand of more innovative and unique designs in the market. 118E. Ltd viii. ix. Transaction Risk Documentation risk: All documentation as advised shall be carried on and no documentation risk is envisaged. Even with the ever-changing fashion in this 75 . further the client is already enjoying working capital limits from us. the same will be extended to mortgage with Sahib Textile Pvt. SWOT  It is a family runs concern. Interest Rate Risk: The rate of interest is a floating rate linked with IVRR and LIBOR and thus shall be taken care of. Weaknesses:  The industry can witness problem due to inflationary trends. Any Other Risk The business does not entail any other risks.  The company has been dealing with good customers from quite long time has been getting repeated orders. As fashion industry is sensitive to it.CONCLUSIONS • • The credit appraisal process carried out at ING is sound and bank has good parameters to appraise the project. x. Covers/Collateral valuation Risk: empanelled valuer shall value The collateral and thus no risk is envisaged with regard to the same. Kamla Nagar is already mortgaged with us in through SDM Fabrics Pvt.  The industry is in healthy shape.

0--500. semi finished and finished goods and book debts and all other present and future chargeable current assets of the borrower. the Sahib group has established its name in the market and is well reputed in this line of business. Further. RECOMMENDATIONS line of activity and pressure from competitors. Allows a 20% hike in projections. COMPLIANCE WITH STATUTORY REQUIREMENTS: The company has filed all Income tax returns till AY2008-09 and further the company has not received any notice of demand or scrutiny for AY2007-08 and AY2008-09. HIGHLIGHTS OF CREDIT INVESTIGATION CONDUCTED : The customer has a good track record of payments with its customers / suppliers and has a good market.0500. Thus the conduct is found to be good.• • The bank has conservative norms to appraise the project the bank at the max. The credit appraisal passes through various stages and evaluations before it is appraised. it is confirmed that all ST/ PF/ESI payments have been made and there are no Over dues as per the last audited balance sheet of FY08 and that all statutory approvals have been taken for conducting the business/ manufacturing activities.0- NW of Guarantors . There have been no irregularities in bank repayments or payments to suppliers. Collaterals Equitable mortgage of: LandBuildingMachineryOthersTotalCover %Present500. COVER / COLLATERALS AND COVENANTS Primary First charge on all present and future stocks of raw material.Personal / Corporate guarantees: 76 . Threats:  Tough Competition from other players: There are many other players in the market.0Proposed500.

Deviations in Credit Policy Financial Parameters Parameters MedianThresholdActual as of B/s dated 31. 588. Lacs are to be disbursed in Mumbai unit account no and Rs.02. 150.09Above median OKMinimum Interest Coverage Ratio (EBITDA / Interest & other finance charges)1.86Above median OKMaximum Debt Equity (total Interest bearing debt / TNW)0.70Above median OKOperating Cash FlowPositive for atleast 2 years in last 3 years693FailsMinimum DCSR1. 70.030. Risk Rating As of 13.0 lacs during the tenor of the loan with our bank.522. 205.0 lac is to be given to Sanjay Gandhi Transport Nagar unit.92 lacs--2205.08Remarks Minimum EBITDA / Net Sales0.06Above median OK 77 . All the documents required to appraise the project should be asked at the time of application only rather than later by the bank The bank must bring more transparency in appraisal of the project there should be explanation for a appraisal of the project that was sanctioned by higher authority.92 lacs Group Specific covenants : The limits will be distributed in three parts. The Company will provide the undertaking to maintain the unsecured loan of Rs.03. Rs.• • • • • Process should be made faster..504. Rs.811.00.881. At the time of projections due to lack of documents.12Above median OKMinimum Current Ratio (Current Assets / Current Liabilities)1.030.01-09Previous ratingRisk rating CRR 3NA Deviations a. the projections are done Without any basis like depreciation in the audited years is not accumulated depreciation PromotersOther personsCorporate / concernsTotalPresentNilNilNilNilProposed2205.0 lacs is to disburse in Chandni Chowk unit account. The bank must not rely on software or information provided by the client the bank should dig in for other sources in order to draw a real picture for the company.254.

I also felt that there is vast difference between academic theory and its practical applicability.  My exposure to the outer world through my training had given me a chance to relate my theoretical knowledge with its practical applicability.  I have become more confident and I have also improved on my sense of appreciation.KEY LEARNING’S  Through this project of mine I got exposure of working in professional environment which in itself was a great experience.  I also got familiarized with the credit appraisal process for SMEs. I gained a lot of knowledge about the practical aspect of fieldwork.  I found that summer training project provides a lot of learning opportunities.MY TAKE AWAY. 78 .

indiainfoline.ANNEXURE & REFERENCES LINKS • • • • • • • www.rbi.moneycontrol.worldbank.org.org.bankinginfo.com www.mospi.nic.com www.in www.ingvysyabank.com BOOKS 79 .in www.in www.com www.

Financial Management. (13th Edition) 80 .Theory & Practice by Prasana Chandra. (7 th Edition) Marketing Management-by Philip Kotler. Tata McGRAW HILL. Pearson Education Ltd.

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