You are on page 1of 49

A PROJECT REPORT

ON
A STUDY ON CUSTOMER SATISFACTION OF SBI
Submitted in partial fulfillment of requirement for the degree of

MBA-I SEM.
IN
MARKETING/ FINANCE/ HUMAN RESOURCES

UNDER THE SUPERVISION OF

MR. ANIL VISHWAKARMA

SUBMITTED BY
AADIL KHAN

TO
DEPARMTNE OF MANAGEMENT STUDIES
SWAMI VIVEKANAND UNIVERSITY, SAGAR (M.P.)
DECEMBER 2014

CERTIFICATE
This is to certify that Report entitled A STUDY ON CUSTOMER

SATISFACTION ON SBI which is submitted by AADIL KHAN in partial


fulfillment of the requirement for the award of degree MBA. from SVN University
Sagar is a record of the candidate own work carried out my Supervision. The matter
embodied in this report is original has not been submitted for the award of any other
degree

Date

Mentor Name
(AADIL KHAN)

DECLERATION
This is to certify that Report entitled A STUDY ON CUSTOMER
SATISFACTION ON SBI which is submitted by me in partial fulfillment of
the requirement for the award of degree MBA from SVN University Sagar
Comprises only my original work and due acknowledgement has been made in
the text to all other material used.

NAME OF THE STUDENT


APPROVIED BY

( AADIL KHAN)

............................................
(H.O.D & DEAN )
SWAMI VIVEKANAND UNIVERSITY SAGAR

PREFACE
Preparing a project of this nature is an arduous task and I was fortunate
enough to get support from a large number o persons. I wish to express my deep
sense of gratitude to all those who generously helped in successful completion
of this report by sharing their invaluable time and knowledge.
It is my proud and privilege to express my deep regards to Respected
HOD Dr. Pramesh Gautam, Head of Department of Business Management,
SWAMI VIVEKANAND UNIVERSITY SAGAR for allowing me to undertake
this project.
I feel extremely exhilarated to have completed this project under the able
and inspiring guidance of Miss Priyanka chourasia he rendered me all possible
help me guidance while reviewing the manuscript in finalizing the report.
I also extend my deep regards to my teachers , family members , friends
and all those whose encouragement has infused courage in me to complete to
work successfully.
AADIL KHAN
MBA I SEM.

ACKNOWLEDGEMENT
Preparing a project of this nature is an arduous task and I was fortunate
enough to get support from a large number o persons. I wish to express my deep
sense of gratitude to all those who generously helped in successful completion
of this report by sharing their invaluable time and knowledge.
It is my proud and privilege to express my deep regards to Respected,
Head of Department Dr.Pramesh Gautam, Department of Business Management
, SWAMI VIVEKANAND UNIVERSITY SAGAR for allowing me to
undertake this project.
I feel extremely exhilarated to have completed this project under the able
and inspiring guidance of He rendered me all possible help me guidance while
reviewing the manuscript in finalizing the report.
I also extend my deep regards to my teachers, family members , friends
and all those whose encouragement has infused courage in me to complete to
work successfully.

AADIL KHAN
MBA I SEM.

CONTENTS
S.NO.

CHAPTER -1

CHAPTER-2
CHAPTER-3
CHAPTER-4
CHAPTER-5

CHAPTER-6
CHAPTER-7
CHAPTER-8
CHAPTER-9
CHAPTER-10

PAGE
COVER PAGE
PREFACE
DECLARATION
CERTIFICATE
INTRODUCTION
HISTORY
AWARDS
RECORINISED BANK
RATIONALE OF THE STUDY
SCOPE OF THE WORK
OBJECTIVE OF THE STUDY
LITERATURE REVIEW
RESEARCH METHODOLOGY

DATA INTERPETATION
RESULT AND FINDINDS
LIMITATION
SUGGESTION
CONCLUSION
BIBLIOGRAPHY
QUESTIONNAIRE

INTRODUCTION
In todays scenario, it is very important to understand that every industry needs to brace itself
and hedge itself against Fund Flows. Fund Flows are of various kinds and in different
magnitude. No matter which industry or sector the company belongs it needs to update every
day itself to the various things happening all over the world which may directly or indirectly
affect its business, growth and potential in the market.
With banks the scene is no different, whenever there comes some slowdown or the market
slouches the banks are effected too. Banks are directly related to people and industry and
market. In the recent times, we have seen that the retail loan section of the banks have come
up as one of the important areas. All the big industry, small and medium enterprises and
individuals, avail loans for all their purposes.
The important thing in this case is that, banks cant give loans to everyone. They need to
check the credit worthiness of the borrower. To rate the worthiness of an individual to that of
a company there are various methods. From checking their market image, their past record,
potential and security provided, it is decided whether they are worthy enough or not. To talk
in more financial terms, for corporate loans there are various methods like balance sheet
analysis, fund flow and cash flow analysis, working capital management, ratio analysis etc.
Every bank also has their own credit rating system; they take into consideration a number of
things, apart from financial workings. All this and more is discussed at length in the coming
chapter.

FUND FLOW MANAGEMENT


ENTERPRISE- WIDE FUND FLOW MANAGEMENT-EXPECTATIONS FROM THE
FIELD
Introduction :
Fund Flow is an integral part of any business environment, more so in the case of Banks,
which are in the business of financial intermediation. The word Fund Flow is derived from
the Italian word Risicare which means to dare. Fund Flow can be identified, measured and
managed while uncertainty remains altogether unknown and hence unmanageable.
The first step to be recognized is that Fund Flow has two distinct phases : Fund Flow as
opportunity and Fund Flow as hazard. Fund Flow as opportunity is implicit in the relationship
that exists between Fund Flow and return. Fund Flow as hazard is what most of us mean by
the term.
The second characteristic is that Fund Flow is always in future. It always pertains to what can
happen but not what has happened.
The third characteristic of Fund Flow Is that it keeps changing with time. Fund Flow
management tus is a process which manages and controls all the three activities.
How does Fund Flow matter to the bank?
Banks and Financial Institutions perform the essential function of channelizing funds from
those with surplus funds to those with shortage of funds. Broadly, the Fund Flows by the
banks today can be classified as under:
I.

Credit Fund Flow : its one of the major Fund Flows faced by the banks on account
of the nature of their business activity, which includes dealing with or lending to a
corporate, individual, another bank, financial institution or a country. Credit Fund
Flow includes borrowers Fund Flow and

portfolio Fund Flow. Borrower Fund Flow may be defined as the possibility that a
borrower will fail to meet his obligations in accordance with agreed terns. It may also
be reflected in the downgrading of the standing of the borrower making him more

vulnerable to possibility of defaults. Portfolio Fund Flow arises due to credit


concentration/investment concentration etc.
II.

Market Fund Flow : market Fund Flow is the potential of erosion in income or
market value of an asset arising due to changes in market variables, such as interest
rate, foreign exchange rate, equity prices and commodity prices.
a) Transaction Rate Fund Flow : The Fund Flow in the erosion of earnings due to
variation in interest rate within a given time zone is referred to as interest rate
Fund Flow. Interest rate Fund Flow may itself arise on account of gap or
mismatch Fund Flow, basis Fund Flow, embedded options Fund Flow, yield curve
Fund Flow etc.

b) Exchange Rate Fund Flow : this Fund Flow is of two types viz. transaction
Fund Flow and translation Fund Flow.
Transaction Fund Flow it is observed when movements in price of a currency,
upward or downward, results in a loss of a particular transaction. Transaction
Fund Flow also destabilizes the anticipated cash flows.
Translation Fund Flow in a situation of translation, the Balance Sheet of a
Bank, when converted in home currency, undergoes a drastic change, chiefly
owing to exchange rate movements and changes in the level of investments or
borrowings in foreign currency even without having translation at a particular
point of time.
Forex Fund Flow arises when a bank is holding foreign exchange assets or liabilities that
have not been hedged against movement in exchange rates. This position is referred to as
open position. Forex Fund Flow affects both spot and forward position of the bank. Banks
are also exposed to movement in forward premium rates, which is a manifestation of interest
rate movements, when there is a mismatch in the maturity pattern of forward transactions.
c) Equity Price Fund Flow : the Fund Flow arises from the potential of an
institution to suffer losses on its exposure to capital markets, from adverse
movements in prices of equity.
d) Commodity Price Fund Flow : the Fund Flow arises from the potential of
movements in prices of physical products, which are or can be traded in the

secondary market. These products include agricultural products, minerals, oils


and precious metals.

III.

Liquidity Fund Flow : it arises due out of the possibility that a bank maybe unable
to meet its liabilities as they become due for payment or may be to find the liabilities
at a cost much higher than normal cost. The Fund Flow arises due to mismatch in the
timing of inflows and outflows of funds, and from funding of long term assets by
short- term liabilities. Surplus liquidity could also represent a loss to the bank in
terms of earnings missed and hence an earning Fund Flow.

Operational Fund Flow it arises out of malfunctioning of information systems or service


delivery process or internal sabotage. In all these cases, the losses are similar and even can
generate losses of unknown magnitude.
Systemic Fund Flow banks are highly inter-related with mutual commitments. Hence the
failure of one institution generates a Fund Flow of failure for those other banks which have
committed funds with defaulting bank.
Solvency Fund Flow it occurs when the bank is landed in a chronic situation of not able to
meet its obligation. This type of Fund Flow gives the ultimate impression that the bank has
failed.
Other Fund Flows there are some other categories of Fund Flows also such as compliance
Fund Flow, tax Fund Flow etc.

WHY FUND FLOW MANAGEMENT IS GAINING


SIGNIFICANCE:
Fund Flow Management is not new to bank, as banking has always been associated with
Fund Flow. But Fund Flow environment that was prevalent in pre- reform period was much
different than what it is today. The emphasis then was on achieving reasonable level of
profits instead of maximizing profits and share holder value. In other words, Fund Flows in
the normal course of business were taken by banks, but without much emphasis on managing
them. Interest rates then were totally administered; credit ceilings were in place and
allocation of credit was done as per the directives. All these practically ensured that the banks
had no incentives whatsoever in Fund Flow management. However the ongoing financial
sector reforms have changed the ball game of banking today. As compared to the practice of
focusing only on achieving higher deposit growth, in the current context the need for proper
management of assets and liabilities has gained importance, heightened by the need for
containment of non performing assets and attendant provisioning. Generating internal
surplus has assumed critical importance as meeting the prescribed capital, standard has
become inevitable. This calls for allocating the resources optimally and managing the
attendant Fund Flow suitably. Here lies the major change in the Fund Flow environment for
banks.
With tighter prudential accounting norms and higher capital standards, banks have to reckon
the Fund Flows they are assuming and returns there on. In other words, while funding costs
will have to be reduced by sourcing funds at the lowest cost, income has to be maximized by
allocating the resources optimally between various assets depending upon the Fund Flow
return trade off and taking into account the constraints in maintaining and improving the
capital standard. In other words, the sources and uses of funds will have to be seen in a
holistic manner and not in isolation as hitherto.
Besides, the paradigm shifts, in the operating environment, the major and minor banking
failures during the last decade, has brought into sharp focus the need for Fund Flow

management. The east Asian melt down has especially proved that banks have to per se relate
their profitability to Fund Flows
being assumed and managed by them and sustain a prescribed level of capital standard. The
focus has further shifted to generating adequate level of profits, so that it will ensure not only
future growth but also lead to increase in capital which is critical in ensuring the confidence
of depositors and other stake holders.
In essence, the foundation of Fund Flow management lie in the following
-

Banks should exercise control on their assets and liabilities, on the return and costs, to

achieve the desired goal.


Such controls in turn, should be coordinated and integrated so as to accommodate
attendant priorities and Fund Flows and should help in maximizing interest rate

spread.
Cost and yield arise from both the sides of the balance sheet and our policies should
be to maximize the spread and minimize the burden.

Management of Fund Flow and profitability are therefore inextricably linked. As various
Fund Flows are interdependent, an integrated approach to all the Fund Flows faced by a bank
is considered most appropriate.
Initiatives by Reserve bank of India
In a view of the important role banks play in the economy and in the payment and settlement
system, banks are always subject to more regulation by the Central Bank.
RBI has taken various supervisory initiatives to induce better operating standards in banks,
greater transparency and sensitivity towards Fund Flow management. Various guidelines, on
the subject matter are outlined below:

Guidelines on Asset Liability Management in banks which

February 1999

includes Liquidity and Interest Rate Fund Flow


Guidelines on Fund Flow Management Systems in Banks
Guidelines Notes on Credit Fund Flows and Market Fund Flows

October 1999
March 2002

Discussion paper on Move towards Fund Flow Based

October 2002
August 2001

Supervision
Detailed Fund Flow profile template to assist banks in

July 2002

undertaking self assessment of Fund Flows.


Guidelines on Fund Flow based Internal Audit

December 2002

Action points include :


-

Identifying gaps in existing Fund Flow management practices and procedures and

chart out policies and strategies and road map for addressing the gaps.
Putting in place required Organization Structure.
Articulate Fund Flow Management philosophy, policy and Fund Flow limits.
Put in place robust credit rating system covering all Fund Flow issues for rating the

borrower.
Inter Bank limits and exposures.
Country and transfer Fund Flow management.
System to measure and monitor liquidity and interest rate Fund Flow.
Policy and limits for operational Fund Flows. Develop internal processes and

expertise in Fund Flow aggregation and capital allocation.


Develop methodology for estimating and maintaining economic capital.

RBI is closely monitoring the progress in implementation of Fund Flow management systems
in banks through periodical review, individual assessment, meetings with management etc.

Credit Fund Flow


Lending involves a number of Fund Flows. In relation to the Fund Flows related to credit
worthiness of the counter party, the banks are also exposed to interest rate, forex and country
Fund Flows.
What is credit Fund Flow?
Credit Fund Flow is the possibility of losses associated with changes in the credit profile of
the borrowers or counter parties. These losses could take the form of outright default or
alternatively, losses from changes in portfolio value arising from actual or perceived
deterioration in credit quality, short of default.
Credit Fund Flow of a bank has two distinct facts i.e. Fund Flow inherent to the individual
business unit/loan account and Fund Flow from macro credit portfolio perspective. Credit
Fund Flow emanates from banks dealings with an individual, corporate, bank, financial
institution or a sovereign. Credit Fund Flow may take the following forms:

In the case of direct lending : principal/and or interest amount may not be repaid;
In the case of guarantees or letters of credit : funds may not be forth coming from

the constituents upon crystallization of the liability;


In the case of treasury operations : the payments or series of payments due from the

counter parties under the respective contracts may not be forthcoming or cease;
In the case of securities trading business : funds/securities settlement may not be

effected;
In the case of cross border exposure : the availability and free transfer of foreign
currency funds may either cease or restrictions may be imposed by the sovereign.

How to quantify Credit Fund Flow?


Credit Fund Flow has got two components : quantity of Fund Flow which is nothing but the
outstanding loan balance as on the date of default and the quality of Fund Flow i.e. severity
of losses which is defined by both default probability and the receivers that could be effected
in the event of default.
Credit Fund Flow is therefore, a combined outcome of
Default Fund Flow it is the probability of the event of default i.e. missing a payment
obligation. In todays parlance, payment default is declared when a scheduled payment has
not been made within regulatory time from laid down.

Exposure Fund Flow the outstanding balances at the time of default are not known in
advances particularly under facilities like committed lines of credit, ODs, project financing,
off balance sheet items like guarantees/LC facilities etc. this uncertainty prevailing with
future amounts at Fund Flow, generates exposure Fund Flow.
Recovery Fund Flow the losses in case of default is the amount outstanding at default time
less recovery. Normally, once a borrower defaults, banks resort to enforcement of security.
But recoveries are not predictable as they depend upon the type of default, availability of
Fund Flow mitigators like guarantors, collaterals etc. and their nature/worth besides the
prevailing legal system. It thus involves great amount of uncertainties. These uncertainties
can be traced to :
Value of Collateral Security :
Recovery Fund Flow depends on the nature of charged assets, their location and possession,
marketability/appeal, legal status etc. At times, the economic value of assets charged may
erode over a period and may even go below the value of outstanding debt. Contrarily, where
collaterals are of high value and are capable of generating buyers interest may even cancel
the loss.
Guarantors value : the net worth of guarantors and in turn their ability to discharge liabilities
upon invocation of guarantee may undergo changes affecting the ultimate realization amount.
Enforceability of Securities : the very ability of a bank to access the securities/collaterals
charged to a bank in order to dispose them off may itself be doubtful. Secondly, enforcement
of securities/contracts is also defined by the prevailing legal system.
In view of this, it becomes difficult to predict the recoverable amount in advance.
The combine outcome of all three elements ultimately defines the credit Fund Flow of a bank.
Once these estimates are made, the loss in case of default can be measured by using the
formula
EL= PD EAR LGD
Where,
EL= Expected Loss
PD= Probability of Default
EAR= Exposure at Fund Flow
LGD= Loss Given Default i.e. (1-Recovery Rate)
Now the moot question is how to assign values to the formulae and that is where Fund Flow
identification and measurement assumes greater significance.

What is Credit Fund Flow Management?


Credit Fund Flow Management covers the systems and processes in place to

Identify and measure the Fund Flow involved both at the individual transaction level and

portfolio level.
Evaluate the impact of exposure on Banks balance sheet/profit.
Assess the capacity of Fund Flow mitigators.
Design an appropriate strategy to arrest Fund Flow mitigators leading to deterioration in
credit quality/default Fund Flow.

It is to be emphasized that Credit Fund Flow Management is not NPA management. NPAs are
a legacy of the past in the present. Credit Fund Flow management is action in present for the
future. In an NPA account, the Credit Fund Flow has crystallized. Credit Fund Flow
Management is more concerned with quality of credit portfolio before default. The Credit
Fund Flow approach monitors worsening credit quality by tracking migration of assets down
the rating ladder, with each rating downgrade representing a higher Credit Fund Flow. This
approach enables bank management to take timely action to stem deterioration in credit
portfolio quality much before actual default, which is the last step in the rating ladder.
Credit Fund Flow Management is also not merely credit management. Credit Management, as
is understood conventionally, is confined to selection, limitation, and diversification and
includes management of NPAs also. In selection i.e. granting a loan or making an investment,
borrowers financial condition, profitability, cash flows, nature of borrowers industry, his
competitive position therein, quality of management, presences of collaterals etc. are assessed
to ascertain the repaying capacity. Limitation ensures that individual or group borrower
concentrations are not very large and is within the prescribed exposure limit. Diversification
is related to limitation and is based on the age-old principle of not putting all the eggs in one
basket. This age-old concept of Credit Management is necessary and would continue to hold
good but it is not proving adequate for management of credit Fund Flow in todays
deregulated environment.
It may be appreciated that the traditional Credit Management focuses on probability of
repayment. Credit Fund Flow Management, on the other hand, focuses on probability of
default. It is more sophisticated than the simple credit management techniques. Some of the
differences in the existing Credit Management approach and the Credit Fund Flow
management. Approach as envisaged by RBI are given in the following table:

CREDIT MANAGEMENT
It is based on Asset-by-Asset or Stand-alone

CREDIT FUND FLOW MANAGEMENT


It is based on Portfolio approach to Fund

approach to credit management. The Fund

Flow.

Flows in the portfolio as a whole are not


captured.
Expected Loss [EL] and Unexpected Loss

Measurement of EL and UL is carried out as

[UL] are not measured. Losses are recognized an integral credit Fund Flow management
in the accounting sense or as per the

process.

regulatory guidelines.
The concentration Fund Flows are identified

The concentration of Fund Flows are

on the basis of owned

measured in terms of additional portfolio

funds/industry/geographical area etc.

Fund Flow arising on account of increased


exposure to a borrower/group of correlated
borrowers.
The correlations among constituent assets are

The strategy under this approach is to

captured to arrive at a measure of Portfolio.


Credit Fund Flow management techniques

originate

allow active credit Fund Flow through

The loan and hold the loan till maturity.


securitization/credit derivatives etc.
RBI in its Guidelines of 1999 and the subsequent Guidelines Note on Credit Fund Flow
management has outlined the broad framework on various facets of Fund Flow Management.
It includes, in main, the framework of following instruments of Credit Fund Flow
Management:
1.
2.
3.
4.
5.
6.
7.

Organizational Structure
Credit Fund Flow Measurement that includes appraisal, rating and pricing.
Appropriate Credit Administration
Limit Structure
Documentation Standards
Loan Review Mechanism
Portfolio Management and System Infrastructure

GENERAL PROCEDURE TO COMPILE A CREDIT REPORT

While compiling a credit report there are certain things one has to include, which are very
necessary for any bank to process a loan or advance. Every bank requires the borrower to
submit all the legal documents with the report, this makes the banks work considerably
easy, in order to process a loan. The following are the steps required to file a credit report;

1. Take the partys letter head.


2. Take the visiting card of the person is interviewed.
3. Constitution : Whether it is a worthy partnership or proprietorship.
Date of being established at which place
Any changes thereafter due to entry/exit
Of some partners.
4. Capital : Authorized Capital :
Paid-up Capital :
Reserve & Surplus :
5. Partners /Directors : Name :
Address Residential :
Bio-data in brief.
6. Establishment : Name & Address of Head Office or Registered Office. Also of
branches/ offices, if any.
7. Banking with which branch. Limits enjoyed. Address of that branch.
Materials required : Name of the materials and policy of purchase.
8. Nature of Business : Credit given to buyers for how many days credit received
for how many days.
9. Factory : Location/ Address
Household /Freehold Ownership in whose name
Rent / Outgoing paid (amount and to whom)
10. Associate concern
11. Residential details : Address Area ownership/rental details in whose name
any other property.
12. Godown : Details address Area ownership/rental keys with
13. Other bankers details : Name address limits enjoyed at present
14. Bio-data of partners: They are partners/director in other companies/firms, if any
and qualifications educational, previous experience.

15. Market opinion


16. Capital reserve (advance tax paid on asset side, miscellaneous exp.)
17. Balance Sheet : Latest completed year- should be audited, , if not provisional.
Amount Paid to directors/partners.
18. Profit & Loss : stock, purchase, gross profit, closing stock, sales.
19. Observations on final Accs : Capital loan to/from sister concerns interlocking of
funds major items of expenses
20. Income declared/ assessed.
21. Wealth Tax: Copy sheet of wealth of partners also assessment orders of WTO
(1)Exempted (2)Taxable (3)Total
22. Enclosures 1) Final Accs (audited)
2) Assessment orders of income of firm/partners and of wealth of
partners
3) Sales/ purchases monthly figures of latest years.
4) Copies of Challan of income tax/ wealth tax.
23. Information given by whom?
24. Reference given by whom?
25. Mention what specifically could not be obtained to help forming or compiling the
credit report.

The procedure relating to submission of data is explained below:


A) TIME DEPOSITS INCLUDING CUMULATIVE DEPOSITS

For submission of data relating to time deposits Union bank Branches have been classified
into following categories:
TYPES OF BRANCHES

a) PBA BRANCHES WHERE


TERM DEPOSIT PACKAGE IS
RUNNING LIVE AND TBA
BRANCHES

PROCESS

The ALM program which has been supplied


by the central accounts department facilitates
transfer of data directly from the deposit
package to ALM system. Therefore, branches
are only required to transfer the data to ALM
system at the month end and forward the
same to their RCCs by email latest by 5th
working day of the next month.
Branches where cumulative deposit is not
line on the deposit package should update the
details relating to these in ALM data entry
module and forward the relevant (soft copy)
to RCC.

b) PBA BRANCHES WHERE


TERM DEPOSIT PACKAGE IS
NOT LIVE

These branches would continue to update the


ALM data through the data entry program
supplied by central accounts department.
Ideally, details of deposits accepted, renewed
and closed should update on the daily basis
to avoid delay in reporting. The data base
should be forwarded to respective RCC by email latest by 5th working day of the next
month.

c) MANUAL BRANCHES

These branches are not required to update the


data base on monthly basis. Therefore, RCC
would continue to generate turn around
statements for these branches on a quarterly
basis. The turnaround sheets will be updated
by these branches and submitted to RCCs on
a quarterly basis.

B) TERM LOANS
FOR SUBMISSION OF ALM DATA RELATING TO TERM LOANS, BRANCHES HAVE
BEEN CLASSIFIED AS UNDER:
TYPES OF BRANCHES
a) PBA/TBA BRANCHES

PROCESS
The data entry packages for term loans has
already been installed at these branches by

RCCs. The data base has been created for all


loans as of 31st march, 2001. Therefore, these
branches are only required for new accounts
and pre payments, if any, in the system. The
accounts which have been adjusted are also
required to be updated in the system.
b) MANUAL BRANCHES

These branches are not required to update the


data base on monthly basis. Therefore, RCC
would continue to generate turn around
statements for these branches on a quarterly
basis. The turnaround statements will be
updated by these branches and submitted to
RCCs on quarterly basis.

C) MATURITY PROFILE OF BILLS


Maturity profile of bills will continue to be worked out branches on quarterly basis.
D) MATURITY PROFILE OF BORROWINGS
This statement will also be submitted at quarterly intervals by the branches which are
controlling the refinance from SIDBI and RBI.

SOURCES OF INFORMATION
1. CUSTOMERS OF THE BANK

2. BUYERS/SELLERS OF THE BORROWERS

3. COMPETITORS

4. OTHER BANKS

5. NON BANKING FINANCE COMPANIES (BLACK LISTING BY LEASING


ASSOCIATION)

6. INDUSTRY/TRADE ASSOCIATIONS

7. GOVERNMENT CELLS/DEPARTMENTS i.e. DEPARTMENT OF INDUSTRY


ETC.

8. NEWSPAPERS/PRESS REPORTS AND FINANCIAL JOURNALS

9. ANNUAL REPORTS/ FINANCIAL STATEMENTS

10. DATA BASE/ CLIPPING AGENCIES

11. CREDIT AGENCIES (EG. CRISIL), Cybercline 2000 etc.

RATIONAL OF THE STUDY


The study is global in scope, since many of the Fund Flows involved are global or regional in
nature.
For this study, stress is defined as a situation where private sector proponents have exited, or
are contemplating exit from a project. Information on stress was derived from the World
Bank's Private Participation in Infrastructure (PPI) dataset, which was used as the source for
much of the data used in the estimation. This global dataset contains project-specific
information on a large number of projects classifiable as PPP, including the total value of
investment, sector, sub-sector, type of transaction, and multilateral participation. It covers
projects which achieved financial closure from 1984 up to the present. The data is crosssectional, with projects classified according to their current status (i.e., whether they are
operational, distressed, canceled, or concluded). Although the data is cross-sectional, it
contains temporal information that can also be used in analysis. Because the sample period
spans the emergence of PPP in the late 1980s, through the Asian and Argentine crisis, and
beyond, the sample includes many projects that have undergone the most tumultuous
experiences in PPP, as well as the periods of consolidation that followed. The PPI dataset is
augmented by country-specific macroeconomic data and, where available, additional projectspecific data such as country growth and exchange rate information.
Analyzing and addressing stress also helps stakeholders enhance PPP's attractiveness as an
investment, by minimizing the fiscal and social impacts of poorly designed and managed
projects.

SCOPE OF THE STUDY

Scope
1.

An enterprise should prepare a cash flow statement and should

present it for each period for which financial statements are presented.
2.

Users of an enterprises financial statements are interested in how

the enterprise generates and uses cash and cash equivalents. This is the case
regardless of the nature of the enterprises activities and irrespective of
whether cash can be viewed as the product of the enterprise, as may be the case
with a financial enterprise. Enterprises need cash for essentially the same
reasons, however different their principal revenue-producing activities might be.
They need cash to conduct their operations, to pay their obligations, and to
provide returns to their investors.

OBJECTIVE OF STUDY
Objectives
Information about the cash flows of an enterprise is useful in providing
users of financial statements with a basis to assess the ability of the
enterprise to generate cash and cash equivalents and the needs of the
enterprise to utilize those cash flows. The economic decisions that are taken
by users require an evaluation of the ability of an enterprise to generate cash
and cash equivalents and the timing and certainty of their generation.
The Statement deals with the provision of information about the historical
changes in cash and cash equivalents of an enterprise by means of a cash flow
statement which classifies cash flows during the period from operating, investing
and financing activities.

LITERATURE REVIEW
LITERATURE REVIEWCustomer satisfaction is an important theoretical as well as practical issue for most marketers
and consumer researchers (10). Customer satisfaction can be considered the essence of
success in todays highly competitive world of business. Thus the significance of customer
satisfaction and customer retention in strategy development for a market oriented and
customer focused firm can not be overstated. Consequently, customer satisfaction is
increasingly becoming a corporate goal as more and more companies strive for quality in
their product and services (11). Customer satisfaction is the feeling or attitude of a customer
towards a product or services after it has been used and is generally described as a full
meeting of ones expectations (12). Customer satisfaction is a major outcome of marketing
activity whereby it serves as a link between the various stages of consumer buying behavior.
For instance, if customers are satisfied with particular service offering after its use, then they
are likely to engage in repeat purchase and try line extensions (13).A study conducted by
Levesque and McDougall (14) confirmed and reinforced the idea that unsatisfactory customer
service leads to a drop in customer satisfaction and willingness to recommend the service to a
friend. This would in turn lead to an increase in the rate of switching by customers.
There can be potentially many antecedents of customer satisfaction as the dimensions
underlying satisfaction judgment are global rather than specific (15). However, some argue
that customers develop norms for product performance based on general product experiences,
and these, rather than expectations from a brands performance, determine the confirmation
/disconfirmation process (16). More recent work has argued that in addition to the cognitive
components, satisfaction judgments are also dependent upon affective components as both
coexist and make independent contributions to the satisfaction judgments (17).
Researchers have established some of the key antecedents of customer satisfaction in retail
banking with respect to customer satisfaction in the competitive world of business as well as
the key antecedents to the formation of overall customer satisfaction (18). The bottom line is
that organizations will always be attentive to maximizing profits and their success will be
determined by how they manage customer relationships. Marketing has taken some initial
steps to place the customer at the center of its efforts, such as information sharing in customer

service channels, sales force automation and target market segmentation. Customer
profitability management requires a multi-level marketing return on investment analysis
covering a series of marketing activities that can be integrated and optimized for a customer
or customer segment (19).
Customer satisfaction, a business term, is a measure of how products and services supplied by
a company meet or surpass customer expectation. It is seen as a key performance indicator
within business and is part of the four perspectives of a Balanced Scorecard.
In a competitive marketplace where businesses compete for customers, customer satisfaction
is seen as a key differentiator and increasingly has become a key element of business strategy.
There is a substantial body of empirical literature that establishes the benefits of customer
satisfaction for firms.
Organizations need to retain existing customers while targeting non-customer. Measuring
customer satisfaction provides an indication of how successful the organization is at
providing products and/or services to the marketplace.
Customer satisfaction is an abstract concept and the actual manifestation of the state of
satisfaction will vary from person to person and product/service to product/service. The state
of satisfaction depends on a number of both psychological and physical variables which
correlate with satisfaction behaviors such as return and recommend rate. The level of
satisfaction can also vary depending on other factors the customer, such as other products
against which the customer can compare the organization's products.

RESEARCH METHODOLOGY
According to Green and Tall A research design is the specification of the methods and
procedures for acquiring the information needed. It is the overall operational pattern or
framework of the project that stipulates which information is to be collected, from where it is
to be collected and by what procedures
This research process based on primary data analysis and secondary data analysis will be
clearly defined to meet the objectives of the study.

I chose the primary sources to get the data. A questionnaire was designed in
accordance with our mentor in Shirts. I chose a sample of about 30 corporate
customers

I collected some data from the secondary sources like published Company documents,
internet etc.

Research Design
A research design is the arrangement of conditions for collections and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in procedures.
It is a descriptive cross sectional design .It is the conceptual structure with in which research
is conducted; it constitutes the blueprint for the collection, measurement and analysis of data.
It is needed because it facilitates the smooth sailing of the various research operations,
thereby making research as efficient as possible yielding maximal information with minimal
expenditure of effort, time and money.
In the preliminary stage, my research stage constituted of exploratory study by which it is
clear that the existence of the problem is obvious .So, I can directly head for the conclusive
research.
Sampling Plan
Sampling plan is a distinct phase of research process. In this stage I have to determine who
is to be sampled, how large should be the needed sample and how sampling unit is to be
selected.
Population
In my research, I have defined my population as a complete set of customers of Sagar City.
Sample Survey

As compared to census study, a sample study has been conducted by us because of:
Wide range of population, it was impossible to cover the whole population
Time and money constraints.
Sample Unit
In this survey I took the list of customers from the dealers of Shirts
Sampling Technique
Sampling technique implies the method of choosing the sample items, the two methods of
selecting sample are:
Probability method.
Non-probability method.
Probability method is those in which every item of the universe has an equal chance of the
inclusion in the sample. Non-probability methods are those that do not provide every item
in the universe with known cause of being included in the sampl
DATA SOURCES
Research is totally based on primary data. Secondary data can be used only for the
reference. Research has been done by primary data collection, and primary data has been
collected by interacting with various people. The secondary data has been collected
through various journals and websites and some special publications of BIRLA.
SAMPLING
i.

Sampling Procedure

ii.

The sample is selected in a random way, irrespective of them being investor or not or
availing the services or not. It was collected through mails and personal visits to the
known persons, by formal and informal talks and through filling up the questionnaire
prepared. The data has been analyzed by using the measures of central tendencies like
mean, median, mode. The group has been selected and the analysis has been done on the
basis statistical tools available.
Sample Size
The sample size of my project is limited to 200 only. Out of which only 135 people
attempted all the questions. Other 65 not investing in MFs attempted only 2 questions.

iii.

Sample Design
Data has been presented with the help of bar graph, pie charts, line graphs etc.

ANALYSIS AND INTERPRETATION OF DATA


4.1 TABLE SHOWING DIVIDEND PAYOUT RATIO
NET PROFIT
Particulars
Dividend

Mar '06

Mar '07

Mar '08

Mar '09

Mar '10

Rs. In crores
29.85

24.20

17.04

17.11

15.66

Payout Ratio
Net Profit

Interpretation:The dividend payout ratio net profit is constantly decreasing year by year. In
the year 2006 it was 29.85 crores while in the year 2009 it has decreased to
24.20 crores, but it has gradually decreased to 17.04 crores in 2007 and stays
constant in 2009 with 17.11 crores but again it is decreased to 15.66 in 2010.
This shows that the dividend payout ratio net profit was decreasing during those
years.

4.1.1GRAPH SHOWING DIVIDEND PAYOUT RATIO NET PROFIT

Inference:
From the above graph it clear shows that the net profit of dividend payout ratio
is decreasing gradually.

4.2 TABLE SHOWING DIVIDEND PAYOUT RATIO CASH PROFIT

Particulars
Dividend

Mar '06
26.47

Mar '07
21.95

Mar '08
15.87

Mar '09
15.85

Mar '10
14.54

Payout
Ratio Cash
Profit

INTERPRETATION :
The cash profit dividend payout ratio is also decreasing year by year . In the
year 2006 it was 26.47 crores and it has gradually decreased to 21.95 crores in
2007 and again gradually decreases as it was decreased in the previous year , it
has decreased to 15.87 crores in 2008 and stays constant with 15.85 crores in
2009 and again it has just decreased to 14.54 crores in 2010. This shows that the
cash profit dividend payout ratio has only decreased and never increased during
these 5 years

4.2.1 GRAPH SHOWING THE CASH PROFIT OF DIVIDEND PAYOUT RATIO

Inference:
From the above graph it clear shows that the cash profit of dividend payout ratio
is decreasing gradually for the following years.

4.3 TABLE SHOWING EARNING RETENTION RATIO

Particulars
Earning

Mar '06
70.11

Mar '07
75.82

Mar '08
82.97

Mar '09
82.80

Mar '10
84.35

Retention
Ratio

INTERPRETATION
The earning retention ratio was 70.11 crores during the year 2006 and has
increased to 75.82 crores in 2007 and again gradually increases in the year 2008
with 82.97 crores and stays constant in the next year 82.80 and again it has just
increased to 84.35 in 2010. This shows that earning retention ratio has increased
year by year. The increase in earning retention ratio is good for the bank

4.3.1 GRAPH SHOWING EARNING RETENTION RATIO

Inference:

From the above graph it clear shows that the earning retention ratio is increasing
gradually.

4.4 TABLE SHOWING CASH EARNING RETENTION RATIO

particular
s
Cash

Mar '06

Mar '07

Mar '08

Mar '09

Mar '10

73.49

78.06

84.13

84.07

85.47

Earning
Retention
Ratio

INTERPRETATION :

The cash earning retention ratio is constantly increasing year by year . the cash
earning retention ratio was 73.49 crores in 2006 . in the year 2007 it is increased
to 84.13 crores and again it is increased in the next year as it is increased in the
previous year to 84.13 crores in 2008 and remains constant in the next year
with 84.13 crores in 2009 and in the year 2010 it is just increased to 85.47
crores this shows that the cash earning retention ratio is only increased and
not decreased during thoese 5 years

4.4.1 GRAPH SHOWING CASH EARNING RETENTION RATIO

Inference:

From the above graph it clear shows that the cash earning retention ratio is
increasing gradually.

4.5. TABLE SHOWING ADJUSTED CASH FLOW TIMES

Particulars
AdjustedCa

Mar '06
97.44

Mar '07
91.38

Mar '08
69.74

Mar '09
74.82

Mar '10
76.06

sh Flow
Times

INTERPRETATION :
The adjusted cash flow times is constantly

decreasing year by year . the

adjusted cash flow times was 97.44 crores in 2006 and in the year 2007 it is just
decreased to 91.38 crores . in the year 2008 it is gradually decreased to 69.74
crores but only from 2009 it has started increasing , it is increased to 74.82
crores in 2009 . in the year 2010 again it is just increased to 76.06 crores

4.5.1 GRAPH SHOWING ADJUSTED CASH FLOW TIMES

Inference:

From the above graph it is inferred that the adjusted cash flow times
were fluctuating during these years

4.6 TABLE SHOWING EARNINGS PER SHARE

particulars
Earnings

Mar '06
13.37

Mar '07
16.74

Mar '08
27.46

Mar '09
34.18

Mar '10
41.08

Per Share

INTERPRETATION :
The earning per share is constantly increasing year by year. The earning per
share was 13.37 crores in 2006 and in the year 2007 it is just increased to 16.74
crores . in the year 2008 it is gradually increased to 27.46 crores . in the year
2009 it is increased to 34.18 crores and again it is increased in 2010 as it was
increased in previous year , it is increase to 34.18 crores by 2010 . this shows
that the earning per share is only increasing and has never decreased during
those 5 year

4.6.1 GRAPH SHOWING EARNINGS PER SHARE

Inference:
From the above graph it clear shows that the earnings per share is increasing
gradually.

4.7 TABLE SHOWING NET CASH FROM OPERATING ACTIVITIES

particulars
Net Cash
From
Operating

Mar '06

-1124.99

Mar '07

1956.28

Mar '08

1930.64

Mar '09

5599.13

Mar '10

-505.07

Activities

INTERPRETATION:
The netcash from operating activities was -1124.99 crores in the year 2006 and
the bank was not in good position during that year. Later in the year 2007 there
was some improvement , like it is increased to 1956.28 crores and there was no
big changes in 2007 as it is just decreased to 1930.64 crores but it is gradually
increased to 5599.13 in 2009 . in the year 2010 it is totally decreased to -505.97
crores. This shows that the bank is facing problem in operating activities.

4.7.1 GRAPH SHOWING NET CASH FROM OPERATING ACTIVITIES

INFERENCE
From the above graph it is inferred that the net cash from operating
activities of the bank is not good and were fluctuating during these
years.

FINDINGS
1. The dividend payout ratio net profit is constantly decreasing year by year. In
the year 2006 it was 29.85 crores while in the year 2009 it has decreased to
24.20 crores, but it has gradually decreased to 17.04 crores in 2007 and was
constant during the year 2009 with 17.11 crores but again it is decreased to
15.66 in 2010. This shows that the dividend payout ratio net profit has only
decreased and it has never increased during those years.
2. The cash profit dividend payout ratio is also decreasing year by year . In the
year 2006 it was 26.47 crores and it has gradually decreased to 21.95 crores in
2007 and again gradually decreases as it was decreased in the previous year , it
has decreased to 15.87 crores in 2008 and stays constant with 15.85 crores in
2009 and again it has just decreased to 14.54 crores in 2010. This shows that the
cash profit dividend payout ratio has only decreased and never increased during
3. The earning retention ratio was 70.11 crores during the year 2006 and has
increased to 75.82 crores in 2007 and again gradually increases in the year 2008
with 82.97 crores and stays constant in the next year 82.80 and again it has just
increased to 84.35 in 2010. This shows that earning retention ratio has increased
year by year. The increase in earning retention ratio is good for the bank
4. The cash earning retention ratio is constantly increasing year by year . the
cash earning retention ratio was 73.49 crores in 2006 . in the year 2007 it is
increased to 84.13 crores and again it is increased in the next year as it is
increased in the previous year to 84.13 crores in 2008 and remains constant in
the next year with 84.13 crores in 2009 and in the year 2010 it is just increased

to 85.47 crores this shows that the cash earning retention ratio is only
increased and not decreased during thoese 5 years

SUGGESTION

1. The dividend payout ratio should be maintained as the shareholders would prefer to
invest only if the dividend payout increases.
2. The EPS is increasing for the bank on yearly basis. So, the bank should maintain the
EPS so that the holders are retained by the bank.
3.

The adjusted cash flow is decreasing for the past few years and this cash flow is
considered as operating or working capital of any bank. But the cash flow is neither
stable nor increasing as it is fluctuating the adjusted cash flow should be maintained
and the cash flow should be planned in such a way that the cash flow should increase
on a yearly basis.

4. Net Cash is the cash that is reserved in the bank for any investing or financing
activities. The cash should be increasing in any business to maintain it sound and
healthy bank. The Net cash should increase on a yearly basis and the net cash is the
life blood of any company or bank for diversification or expansion of it respectively.
5. Opening cash and cash equivalent is the initial investment or opening balance of any
business. But in this case it is for bank, so as per that the opening cash is increasing
for bank and this should be maintained as this will have a drastic impact on the
balance and the bank should also keep up this performance to improve in positive
direction.

6. Closing cash and cash equivalent is the closing balance or net balance available at the
end of the year. The closing cash was increasing substantially for all the years except
for the year 2010 as the balance has pitched down this should be maintained and
focused for better closing balance at the end of each year. The closing balance should
be looked for positive increase as it decreased when compared to other years.

CONCLUSIONS

The process of financial Fund Flow management is an ongoing one.Strategies


need to be implemented and refined as the market and requirements change.
Refinements may reflect changing expectations about market rates, changes
to the business environment, or changing international political conditions, for
example. In general, the process can be summarized as follows:
Identify and prioritize key financial Fund Flows.
Determine an appropriate level of Fund Flow tolerance.
Implement Fund Flow management strategy in accordance with policy.
Measure, report, monitor, and refine as needed. Fund Flow management
needs to be looked at as an organizational approach, as management of Fund
Flows independently cannot have the desired effect over the long term. In this
project I have analyzed the Fund Flow management process of Union Bank of
India. It was found that Net and Gross NPA of the bank is increasing which is
not good for the bank. Thus we can say that Bank must improve its Fund Flow
management strategies

QUESTIONNAIRE
Name of Customer _______________
Mobile No.______________
Name of the bank and type of account_______________________________________
Please answer the questions and tick at the place that matches your opinion.
(A)
Mobile Banking
(b)
Tele Banking.
How would you describe your views about Customer Service Representatives? Please tick in
The appropriate column.
(1: Very Dissatisfied/2: Dissatisfied/3: Satisfied/4: Very satisfied/5: Highly Satisfied), specify
the Reason if not using the service
Call answering time
Flawless/correct operations.
Understanding and replying queries correctly
Communication skills/positive approach
General assessment about the service
Branch Banking
How would you describe your views about Branch Banking? Please tick in the appropriate
column.
(1: Very Dissatisfied/2: Dissatisfied/3: Satisfied/4: Very satisfied/5: Highly Satisfied)
Behavior of the staff
Time taken to process the transaction
Working Hours
General assessment about the services provided by the branch
Internet Banking
How would you describe your views about Internet Banking services? Please tick in the
appropriate column.
(1: Very Dissatisfied/2: Dissatisfied/3: Satisfied/4: Very satisfied/5: Highly Satisfied), specify
the reason if not using the service.
Page setup/Menu flow
Ease of use/navigation
Speed of page loading
Variety of transactions
General assessment about the service
ATM Banking

How would you describe your views about ATM Banking services? Please tick in the
appropriate column.
(1: Very Dissatisfied/2: Dissatisfied/3: Satisfied/4: Very satisfied/5: Highly Satisfied.
Reason if not using the service
ATM network distribution
Continuous service
Variety of transactions
Easy of screen use
General assessment about the service
The overall experience of customer ranged from good to satisfactory while opening an
account in any of five banks
Scale 1-7
Demographic profile of the customers
Demographics
1. Gender
Male
Female
2. Marital status
Married
Unmarried
Other
3. Monthly Family income
Less than Rs10000
Rs10000-20000
Rs20000-30000
Rs30000-40000
More than 40000
4. Age
Below 25 years
25-35 years
35-45 years
45-55 years
Above 55 years
5. Education
Secondary
Higher secondary
Undergraduate
Graduate
Post Graduate
6. Occupation
Home maker
Service
Self employed
Retired
Students