A

DISSERTATION
On

“Small Business Credit Card Scheme of State Bank of India

[SBI] and other Public Sector Banks in Gangapur City,

Rajasthan - Analysis of Customer Satisfaction”

Submitted towards the partial fulfilment of

VI semester of MBA-MBL
Degree course

Submitted by: Submitted to:

Pavan Kumar Gupta Prof. (Dr.) Rituparna Das
Roll No. 262 Associate Professor
MBA-MBL (VI Semester) Faculty of Management
NLU, Jodhpur NLU, Jodhpur
National Law University
Jodhpur

Electronic copy available at: http://ssrn.com/abstract=2133110

 ABSTRACT

This study entitled “credit schemes of State Bank of India (SBI) and other banks” will be helpful for
bankers to maintain customers service policy, for customers while deciding their financing needs and also
helpful for other researchers for further research in the future.

Banking regulation Act 1949 defines banking as accepting for the purpose of lending or investment, of
deposits of money from the public, repayable on demands or otherwise and with draw able on demand by
cheques, draft or order otherwise.

Small Business Card (SB Card) provides customers with an option, in addition to the existing banking
credit facilities available. With an SB card customers can enjoy hassle-free credit facilities.

This study would help us to know about the problems that are faced by the consumers during transactions.
It would also reveal the problems that are being faced by the bank employees while dealing with
customers and would also highlight the future prospect of SB card.

This study entitled “credit schemes of State Bank of India (SBI) and other banks” will be helpful for
bankers to maintain customers service policy, for customers while deciding their financing needs and also
helpful for other researchers for further research in the future.

Banking regulation Act 1949, defines banking as accepting for the purpose of lending or investment, of
deposits of money from the public, repayable on demands or otherwise and with draw able on demand by
cheques, draft or order otherwise.

Small Business Card (SB Card) provides customers with an option, in addition to the existing banking
credit facilities available. With an SB card customers can enjoy hassle-free credit facilities.

This study would help us to know about the problems that are faced by the consumers during transactions.
It would also reveal the problems that are being faced by the bank employees while dealing with
customers and would also highlight the future prospect of SB card.

Electronic copy available at: http://ssrn.com/abstract=2133110

Review of existing literature

It is very essential to know whether the study has already been conducted before. If so, how and to what
extent? And because of this I have to go through all the existing literature related to the study. SB Card,
very limited studies have been conducted on the subject. Due to the time restrictions I can seek advice
from only the limited literature, which is available with the bank.

As the concept is completely under the control of various banks and RBI, the information would be taken
directly from these sources.

Conceptualization

As the concept includes two terms i.e. cash credit or working capital loans and terms loans. Therefore
both the terms are taken into consideration in the proposed study. Due to the privatization of banking
sector many big private players entered in this sector giving a tough competition to the existing players.
So, to face this stiff competition all the public sector banks have to review their functioning. These
aspects will be given importance in this project report.

The concept of SB card, question crops in mind what is a SB card, what is its shape and size, what is its
function. A SB card is nothing but a identity card containing card holder’s photographs with signature,
card no. Name, A/c No. limit, validity period, branch code with signature of Branch Manager.

Focus of the problem

The study would be conducted at Gangapur City, Rajasthan. The main focus of the study is to know about
customer’s perceptions about SB card credit scheme. As SB card is an integral part of SBF (small
business financing). So the due weightage would be given to SB card. This study would be conducted by
classifying customers into two categories.

 SB Card holders
 Non SB Card holders
RESEARCH OBJECTIVES:

1. To find out the market potential of SB cards issued by different public sector banks in Gangapur
City.
2. To know customer’s perceptions about various SB card credit scheme of different public sector
banks.
3. To compare the SB Cards credit scheme of different banks.

Electronic copy available at: http://ssrn.com/abstract=2133110

 4. To find out main obstacles while getting finance under various SB cards.

RESEARCH METHODOLOGY:

Depending upon the objective of the study the research I would be adopting the Descriptive Research
methodology.

Data Collection:

There are two sorts of data available:

1. Primary Data :
These data will be basically observed and recorded for the first time for my Dissertation work.
The data will be collected through survey method by using the tool Questionnaire.

2. Secondary Data:
The secondary data will be collected from the following sources:

 Financial News Papers.

 RBI website.
 Websites of banks lying in my research area.
Identified Independent and Dependent variables:

Independent variables:

All the external factors are independent variables:

 Govt. policy of RBI

 Environmental factors
 War
 Technology
 Natural Calamities
Dependent variables: All the internal factors of organization are dependent variables:

4
  Company policy

 Infrastructure

Sampling Design:
All the customers availing credit schemes in Gangapur City is my universe while the sample size is 40.
The sample unit is individuals. I would be taking the sample on my convenience.

The sample respondents/customers will be curved out in 4 categories according to their type of small
business or profession for 6 banks (namely SBI, PNB, UCO, OBC, CANARA, IOB)

Sampling techniques:

For the present study, convenient technique of sampling non-probability (Non-probability sampling
involves personal judgment somewhere in the process) would be used.

Significance of the Study

This study entitled “comparative study of small business card credit schemes of SBI V/s other banks” will
be helpful for bankers to maintain customers service policy, for customers while deciding their financing
needs and also helpful for other researchers for further research in the future.

SBI card provides customers with an option, in addition to the existing banking credit facilities available.
With an SBI card customers can enjoy hassle-free credit facilities.

This study would help us to know about the problems that are faced by the consumers during transactions.
It would also reveal the problems that are being faced by the bank employees while dealing with
customers and would also highlight the future prospect of SBI card.

CHAPTERISATION

The Chapterization of the dissertation report is as following:

Chapter –1:

 In the chapter 1st a brief introduction has been made. In the introduction banking scene in India
and Emerging environment of banking in India have been discussed.

Chapter –2:

5
  In the chapter 2nd the small business credit cards of SBI bank and other public sector banks has
been discussed. The credit card, why it is a convenient banking product is also has been
discussed. What is status and popularity is there of SB (small Business) cards in India especially
in low income areas like semi urban and urban, has been covered.

Chapter – 3

 In the chapter 3rd the Reasons for choosing the Gangapur city as research place and the field work
in sampling space (Gangapur City) has been discussed.

Chapter –4:

 In this chapter the comparison of SB cards on the basis of different parameters like interest rates,
collateral security, documents required etc. has been made. It consists of the detail descriptions
about the raw data. Here the complete analysis of the data, which is collected from the primary
sources. For tabulation the data is converted into the percentage and after that it is tabulated. On
the basis of this data the graph are inserted. At last the conclusion is drawn on the basis of this
data.

Chapter –5:

 In this chapter a detailed conclusions have been drawn from the data tabulated, interpreted and
analyzed. The research objectives have been solved in detail and described in different points
clearly.

Chapter –6:

 In this chapter the suggestions on the basis of my research have been made for the customers in
view of facilitation and convenience purposes and to the bankers to enable them customer
oriented.

Chapter -7:

 In this chapter the limitations observed in my dissertation work has been acquainted with.

6
Chapter – 8:

 It consists of the appendices part of the dissertation report in this part I have mentioned the names
of all those books, magazines, journals and web-sites from where I have collected the material
comes under the head of bibliography. It also consists of the questionnaire, which is used for
collecting the data.

7
 ATTESTATION

I understand the nature of plagiarism, and I am aware of the University’s policy on this.

I certify that this dissertation reports original work by me during my University project except for the
following:

 The theory part in the chapter first and second has been referred to secondary sources like
banks websites, websites of financial newspapers and RBI website.
The rest part of my dissertation was developed by me during VI semester internship period with
the collaborating company. In addition, this used ideas I had already developed in my own time.

Signature Date: 1st of May, 2012

(Pavan Kumar Gupta)

8
 ACKNOWLEDGEMENT

“A mind troubled by doubt

Cannot focus on the course to victory”

As a child, you acknowledged everything you accomplished, as you grow older and more
sophisticated, you acknowledge only major accomplishments but an endeavor of this magnitude
would not have been possible without the invaluable help and support of Professor (Dr.)
Rituparna Das, Faculty, National Law University, Jodhpur, whose support was instrumental in
accomplishing this task. His simplified teaching techniques based on examples have helped me
gain more understanding of the subject. The very essence of the Dissertation work is the
linguistic precision which has an impact of conveying more details in least possible words.

I feel very much gratified to the company in which I have undergone for an internship in my VI
semester of degree, for providing practical exposure and rich infrastructure assisting me in this
research work.

Finally, I feel very much gratified to the administration of the National Law University, Jodhpur
for providing comfortable environment and rich infrastructure which has always been a
facilitating stuff.

9
 Table of contents

Sr No. Contents Page No.

1. 2
Abstract

2. Attestation 8

3. Acknowledgement 9
4. 10
Table of contents

5. 11-12
Chapter 1 Introduction:
a. Banking Scene in India
b. Emerging environment of banking in India
c. Growing privatization and commercialization
infrastructure

6. 13-22
Chapter 2 Small business credit cards of SBI bank and other
public sector banks

7. 23-24
Chapter 3 - The field work in sampling place (gangapur city)
8. Chapter 4 - Data Tabulation and Analysis 25-27

9. Chapter 5 – Conclusions 38
10. Chapter-6- Suggestions 39
11. Chapter-7 - Limitations of the study 40
12. Chapter 8- Appendices 41-44
a) Bibliography
b) Questionnaire

10
 CHAPTER-1
INTRODUCTION

BANKING SCENE IN INDIA

The banking sector in India is passing through a period of structural change under the combined impact of
financial sector reforms, internal competition, changes in regulations, new technology, global competitive
pressure and fast evolving strategic objectives of banks and their existing and potential competitors. Until
the last decade, banks were regarded largely as institutions rather akin to public utilities. The market for
banking services were oligopolies and Centralized while the market place was regulated and banks were
expected to receive assured spreads over their cost of funds. This phenomenon, which was caricatured as
3-6-3 banking in the United States, meaning that banks accepted deposits at 3%, lent at 6%, and went
home at 3 p.m. to play golf, was the result of the sheltered markets and administrated prices for banking
products. Existence of entry barriers for new banks meant that competition was restricted to existing
players, who often operated as a cartel, even in areas where the freedom to price their products existed. 1

The market place began to change for banks in India as a result of reforms of the financial sectors
initiated in the current decade. On account of policy measures introduce to infuse greater competitive
vitality in the system, the banking has entered in to a competitive phase. Competition has emerged not
only from within the banking system but also from non-banking institutions. Lowering of entry barriers,
deregulation of interest rates and growing sophistication of customers have made banking far less
oligopolistic today. Introduction of capital adequacy and other prudential norms, freedom granted to enter
into new turf’s and greater overlap of functions between banks and non-banks have forced banks to get
out of their cozy little world and think of the future of the banking.

EMERGING ENVIRONMENT OF BANKING IN INDIA

The Full convertibility of rupee leading to free mobility of capital which will mean virtual collapse of the
national borders for trade and capital flows.Greater coordination between monetary, fiscal and exchanged
rate policies for achieving the goals of faster and sustainable economic growth, macro-economic stability
and export promotion.

1
www.ucobank.com

11
Close integration of various financial markets such as money market, capital market and Forex market.

Removal of lowering of existing barriers of competitiveness, which are present today in the form of
quantitative instructions on certain imports protective custom duties, reservation of certain utilities for the
public sector.2

GROWING PRIVATIZATION AND COMMERCIALIZATION INFRASTRUCTURE SECTOR

Today, Bank customers are better informed, more sophisticated and discerning. They also have a wide
choice to choose from various banks and non-bank intermediaries. Their expectations are soaring. This is
particularly true for banks corporate clientele but also applies to customers from personal segment.

This is changing profile of customer’s call for a shift from product-based approach to customers-based
approach. A bank aiming at maximizing customer value must, of necessity, plan for customized products.
A combination of marketing skills and state-of-the-art technology should enable to bank in maximizing
its profits through customer satisfaction.

In the next millennium banks will have to be more and more cautious about customer service,
profitability, increased productivity, to keep face with changing banking scenario. As banks in India
prepare themselves for the millennium these are the shifts in the paradigm they are likely to experience.
The 21st century may see the dawn of “DARWINIAN BANKING”. Only the banks could fulfill the
demands of markets and changing items would survive and prosper. 3

2
cpolicy.rbi.org.in
3
cpolicy.rbi.org.in

12
 CHAPTER2.
SMALL BUSINESS CREDIT CARDS OF SBI BANK AND
OTHER PUBLIC SECTOR BANKS

A WORD ABOUT SB CARD

SB Segment: Small business credit card (SB credit card)

Preamble:

Small business units, retail traders, artisans, village industries, small-scale industrial units and tiny units,
professionals and self employed persons etc., contribute significantly to the growth of our economy.

The entrepreneur himself manages many of the units. Very often, these entrepreneurs complain of
procedural delay in sanctions and renewal of limits. They also find it difficult to cope with the demands
for audited balance sheet and other statements sought by the bank from time to time for availing credit
facilities. With a view to providing hassle free financial supports to the above categories of entrepreneurs
who have shown commitment to run the unit successfully and who are dealing with the banks for last two
years satisfactorily, new and friendly credit product namely small business credit card scheme is
designed. Under the scheme, cumbersome procedural aspects relating to reviews and renewals,
submission of balance sheet, stock statements and other statements are done with credit delivery made
simple and easy.

Purpose:

To meet the credit requirements of small business units, industrial unit, retail trader, artisan, Small Scale
Industry (SSI) and tiny units.

Eligibility:

13
 A. Customers of the following segments with a satisfactory track record for the last two years
enjoying credit facilities. 4

 Small industrial units (SSI and tiny units including artisans)

 Small retail traders (Under SBF)
 Professional and self employed persons
 Small business enterprise

B. Units who do not enjoy credit limit with us/other banks at present with excellent performance and
credential may be considered.

Quantum of loan:

Loan up to Rs. 5 Lac can be sanctioned to eligible persons. 5

Assessment:

The small business credit card limit can be fixed as follows:

 For small business, retail trader etc. 20% of the annual turnover declared for tax purpose or last
twelve months turnover in the operative accounts, whichever is higher.

In respect of parties with good track record, where sales tax returns are not available, the credit limits
may be decided taking into consideration the actual turnover in the accounts during the last two years.

 For professionals and self employed persons, 50% of their gross annual income as per IT return
shall be considered as the limit for issuing the SB credit card.
 For small scale industrial units, tiny sector units the assessment norms in vogue as per the Nayak
Committee recommendations would continue.

Validity:

 Credit card limit will be valid for a period of three years, subject to satisfactory conduct of the
accounts.

3 SBI Card – SBI Credit Card Offers, Eligibility and Apply « Deal4loans.mht
5
Pricing and Costs of Small Business Credit Cards - Business Guides & Articles - Business_com.mht

14
  Annual review will be done based on conduct/operations of the A/cs. A major portion of the sales
turnover should have been routed through the accounts as revealed by the credit summations.

Repayment:

 The working capital advance may be continued subject to that review every year provided the
credit summations in the account is not less than 50% of the projected sales turnover.
 If the credit summations is less than 50% of projected sales turnover. The outstanding as on the
due date of review should be made repayable in suitable monthly installments.
 The term loan is repayable in suitable installments within a maximum period of five years.
 In case of composite loans, only the term loan is repayable in installments up to a maximum
period of five years.

Interest rate:

As per extent instructions issued from time to time relating the market segment.

Refinance:

No refinance is to be claim from SIDBI

Security:

Primary:

Hypothecation of the stock in trade, receivables, machinery, office equipments

Collateral:

Under SSI – No collateral security as per existing guidelines of RBI.

User SBF:

 Up to Rs. 25000/- No collateral security.

 Over Rs. 25000/- charge over movable/immovable property or third party granted.

However, in case of the excellent track record, sanctioning authority may waive collateral requirement.

15
Margins:

Up to Rs. 25000/- - NIL

Rs. 25001/- to Rs. 5,00,000/- - 20%

Documentation:

Documents as per extant instructions 6

 Credit Card – A Convenient Banking Product-

The credit card is a hassle free convenient banking product aimed at simplifying the credit delivery
mechanism. Cumbersome procedural aspects relating to reviews and renewals, submission of stock
statement, balance sheet and other statements are done away with. The credit limit will be worked as
detail above. 7

Small business credit card

 Card No.
 Name
 Account No.
 Tel. No.
 Limit Rs.
 Date of issue
 Valid upto
 ………….. (Branch Code)

Signature of the Brach Manager Card holder’s Photograph with signature

The borrower would be issued a photo card indicating sanctioned limit and validity of the limit (sample
card)

6
www.statebankofindia.com
7
www.canarabank.com

16
Insurance:

 Fixed assets/stock pledged/hypothecated to the bank be fully insured at least to the extent of the
bank interests.
 Bank may waive insurance of assets for equipment against the fire and other risk up to Rs.25000/-

Cover under credit guarantee scheme:

All eligible loan accounts sanctioned for small scale industries (other than services) would qualify for
cover under CGTFSI scheme (presently the scheme has been introduce in five circles on pilot basis viz.
New Delhi, Chandigarh, Lucknow, Patna & Hyderabad) 8

Operation:

 Small business credit card accounts should be maintained in a separate ledger.

 Cheque book should be issued and marked as small business credit card account.
 Pass book should be issued for small business credit card holders.
 Stock statement waived.
 Submission of audited balance sheet waived.
 Borrower would be issued a small business credit card with photograph thereon. Cost of
photograph to be borne by banks.
 IRAC norms would be applicable.
 Brief opinion report should be recorded. Marked inquiries should be made and recorded in the
opinion report and singed by the field officer/cash officer or officers not below that rank.
 Units within a radius of 5 kilometers may be covered intensively for the issue of credit card. This
condition may be waived for such of those units already in the book of the branch.

Inspections:

 Half-yearly inspection/monitoring to ensure the end user funds.

Sanction:

 Required loan may be sanctioned within a week after receipt of detailed information.

8
www.orientalbankofcommerce.com

17
  Control return after sanction may be sent to next higher authority for approval.

Scoring Model:

 Loan would be sanctioned up to Rs. 5,00,000/- based on the simplified scoring model as given in
annexure- II. Those who are scoring less than 60% would not qualify for the loan.

Rationale:

 New schemes for hassle free credit facilities to small borrower. 9

Attractive Features

 Less paper work.

 Stock Statement waived.
 Submission of audited Balance-Sheet waived.
 Borrower to be issued a small plastic card.
 Half-yearly inspection.
 Simplified application.
 Simplified scoring model for appraisal.
 Annual review based on the conduct of the account.
 Repayment of term loan component upto 5 years.
 Business credit cards can be an excellent way to track spending, purchase necessary supplies, and
build the credit of your business. If you are familiar with consumer credit cards you may be
surprised to find that regulations vary between the two types of cards. While the U.S. government
implemented many safeguards under the CARD Act to protect consumers, these regulations do
not apply to business credit cards.
 Business owners should be aware that the rates and terms they will receive will be tied to their
personal credit score. However, if you can obtain 18avourable terms, a business credit card can
offer advantages that no other financial product can meet. 10

Tips & Advice to help you make your decision on Small Business Credit Cards

9
www.indianoverseasbank.com
10
Small Business Credit Cards - Find Small Business Credit Cards Vendors, Tips & Advice, Buying Guides -
Business_com.mht

18
 Have you been curious about small business credit cards? Getting credit for any business is
essential, and it can be even more important for a small business that does not have a lot of cash
on hand or that has to wait on payments from customers or other businesses most months. A good
credit card can help ensure your business is able to purchase necessities as you wait for payment
from your customers.

There are quite a few options when you are looking for a credit card for a small business. Before
making your decision you will want to consider some important factors. Perhaps most important
you want to be sure you are getting a good rate of interest. A credit card is little good if the
interest payments become too steep or if they have a lot of hidden fees that drive up the cost.
Some things to look for in this type of credit card are minimum payments, when payments need
to be made to the card, and the type of limits on the card. Not every card is right for every
business so be sure the type of credit card you get meets your needs.

Business.com provides links to companies that may be able to help. View the links to the left and
find the small business credit cards that are right for you.11

Benefits

 Just like consumer credit cards, business credit cards offer rewards programs and other incentives
to attract clients.
 Ease of Bookkeeping.
 Using a business credit card for most purchases can help you track expenses over time. Some
credit card companies will issue itemized statements to help you stay within budget for all of your
expenses. Having a business credit card also prevents you from mixing personal and business
finances.
 Protection Against Employee Fraud
 Each employee responsible for purchasing equipment or services can be issued a credit card. This
immediately creates employee accountability for spending. Many credit card companies also offer
protection against employee fraud and will cover charges up to a certain dollar amount.
 Rewards Can Help Your Business
 While many credit card companies offer cash back and other typical rewards on their business
credit cards, there are also incentives specifically for business owners. Cards may offer discounts
on business services, equipment, and travel.

11
www.panjabnationalbank.com

19
  Helps Build Business Credit
 Opening a business credit card can help you establish independent business credit. Business credit
cards are also often easier obtain than loans, which makes it easier to establish credit. Once the
business is established, you can use the favourable credit history of the business to seek a
business loan. Good business credit can also help you find business credit cards with more
favourable rates.12

Pitfalls

 Due to the limited regulations that apply to business credit cards, keeping your account in good
standing can be difficult or confusing. However, while business credit cards are not subject to the
same restrictions as consumer credit cards, many credit card companies follow some CARD Act
policies when issuing business credit cards. Business cardholders who take advantage of these
protections should keep in mind that these policies can change in the future.
 Rates Can Change Retroactively
 Unlike consumer credit cards, the rates on business credit cards can change without notice and be
applied retroactively to old purchases. Although some credit card companies will comply with
consumer credit card regulations when issuing business cards, policies vary between companies.
 Payment Due Dates Can Fluctuate
 Companies that issue business credit cards are not required to mail the statement 21 days before
the payment due date. Due dates can change month-to-month and it is your responsibility to
anticipate any changes to avoid high late fees. Late fees are set at the discretion of the credit card
company and are not capped by current regulations.
 No Restrictions on Over-the-Limit Fees
 Rather than declining a card that is reaching its limit, the credit card company may accept the
charges but will charge you an over-the-limit fee. Unlike a personal credit card, there is no cap on
this fee. In fact, the fee for this courtesy could exceed the amount of the over-the-limit charge.
 The Card Is Tied To Personal Credit
 Before issuing credit, the credit card company will require that you guarantee you will personally
pay any charges. Therefore, even if the company fails, you will be personally liable for the
balance of the cards. Also a good payment history may not be reported to the credit agency, but a
missed payment or default will be added to the business owner’s personal report. The only

12
Business Standard

20
 exception is for large and established companies that have demonstrated assets that could cover a
default.13

SB (Small business) Cards in India (Especially in low income areas like semi urban and urban)

Pricing

 Business credit card rates and annual fees will be strongly tied to the business and
personal credit of the potential cardholder. When choosing a card, you should weigh any
card rewards against an annual fee or a higher rate. If the business intends to pay all
statements promptly, you can often obtain rewards with a monetary value that will offset
any annual fees. However, if there is a possibility of carrying a balance over to the next
month, most cardholders would be better served with a lower interest rate than card
rewards.

 Business credit cards offer significant advantages when starting a company, but you
should be wary to avoid incurring excessive fees and rate hikes. If you intend to apply for
a new card, you should carefully cultivate your personal credit to obtain the best terms.
You should also be aware that you are personally liable for the company’s debts.
 If you are ready to navigate these potential pitfalls, card rewards and other benefits can
make business credit cards a lucrative tool. Fraud insurance can also easily save you
thousands of dollars and offer piece of mind14

Comparison of small business cards worldwide:

Credit Card American

American Express Chase American Express Chase
Issuer Express
Credit Card
American Express Visa, Mastercard American Express Visa, Mastercard Visa
Network
No annual fee for $0 introductory
the first year - $95 annual fee for the
Annual Fee $0* $0* See Terms*
Annual Fee first year, then
thereafter $175
Intro APR N/A* 0.00%* N/A* 0.00%* N/A
6 months on
Intro APR 6 months on purchases purchases and
N/A* N/A* N/A
Period and balance transfers* balance
transfers*
Regular APR N/A* 13.24%*(Variable) N/A* 13.24%* 23.99%*

13
SBI Card – SBI Credit Card Offers, Eligibility and Apply « Deal4loans.mht
14
Financial Express

21
 (Variable)
Balance
N/A* Yes* N/A* Yes* N/A*
Transfers
Credit Excellent
Excellent Credit* Excellent Credit* Excellent Credit* Fair/Poor*
Needed Credit*
Fraud and
Theft Yes Yes Yes Yes Yes
Protection
Main
Rewards General Rewards Cash Back General Rewards General Rewards None
Type
Phone
M-F 9a-6p
Customer 24/7 24/7 24/7 24/7
EST 15
Support

15
Compare Business Credit Cards Small Business Credit Cards ChooseWhat_com_com-.mht

22
 CHAPTER3.
THE FIELD WORK IN SAMPLING PLACE (GANGAPUR CITY)

Reasons for choosing the Gangapur city as research place

Gangapur city the sample space is a urban area, subdivision of Sawai Madhopur district in Rajasthan. It is
enjoying the municipality as local governing body. It is having more than 10,00,000 population. There are
hundreds of SSIs and thousands of SBFs. It is economically strong area, well connected with rail, and
road transport directly to major economically large cities like Delhi, Mumbai, Bangalore, Chennai,
Kolkata, Jaipur etc. There is a lot of entrepreneurs. There a lot of banking institutions like SBI, PNB,
IOB, Canara Bank, SBBJ, Dena bank, UCO bank, oriental bank of commerce, ICICI bank etc.

The retail traders, small & medium enterprises, professional including Chartered Accountants, Chartered
secretaries, Doctors, Stock Brokers, are getting financed through these banking and non banking
institutions for working capital and their profession in the form of term loans or credit facilities like small
business cards offered by these institutions.

On the basis of emerging industrialization in the area there is a huge scope for establishment of financial
institutions. People’s needs are soaring much.

Considering these facts I have chosen this area as my research area, and believing that my research will
be beneficial to the Credit providers and the customers of these institutions.

I have selected the 6 bankers ie. SBI, UCO bank, Indian Overseas bank, Canara bank, Punjab national
Bank, and oriental bank of commerce.

The customers are categorized in to 4 categories namely,

• Small industrial units (SSI and tiny units including artisans)

• Small retail traders (Under SBF)

• Professional and self employed persons

• Small business enterprise

23
These above categories are further vertically categorized as

 SB card holders &

 Non SB card holders.

I have prepared a questionnaire as tool of gathering primary research data. Direct contacts have been
made to these customers and the credit providing institution’s officials. 16

16
Economic Times

24
 CHAPTER - 4
DATA TABULATION AND ANALYSIS

Comparison of SB cards on the basis of different parameters like interest rates, collateral security,
documents required etc.

Credit Schemes of SBI Bank and other Banks

Q1. Are you aware of Small Business card (SB card)?

Response-

no
8%

Awareness level

yes
92%

Analysis- Most of the respondents are well aware about the small business card credit facility of different
Banks.

Q2. If yes, from where came to know?

(a) Friends (b) Bank Employees (c) Advertisement (d) Publicity

25
Responses-

40 source of information
35 about SB card

20 10
0 5
0

no. of respondents

Analysis- the main source of information was advertisements; bank employees did not give any
information. Bank employees seemed to having indifferent attitude towards this scheme.

Q3. Are you availing SB card from any bank?

Yes No

users of SB card

no
12%

yes
88%

Analysis- Most of the respondent are availing credit facilities from Banks.

Q4. If yes, from which bank you are availing SB card facility?

SBI PNB UCO IOB Others

18 14 04 06 02

26
 no. of users availing SB card from different banks

2 sbi
6
pnb
18
4 uco
iob
14 others

Analysis-Nearly 40% of the Respondents are availing credit facilities from SBI followed by PNB.

Q5.Since when you are availing this facility?

a) More than 3 year b) 2-3 years

c) 1-2 years d) Less than 1 year

Time since customers are availing credit facilities

More than 3 yrs 2 to 3 yrs 1 to 2 yrs Less than 1 yr

10 16 14 04

time since customers are availing facility

4 4
more than 3yrs
6
2 to 3 yrs
1 to 2 yrs

30 less than 1 yr

Analysis - Most of the respondents are availing the credit facilities ranging from 1 to 3 years.

Q6. Are you satisfied with your existing bank?

No. of satisfied customers

27
Yes No
32 12

No. of satisfied customers

yes
no

Analysis - Customers are highly satisfied with their banks.

Q7. If no, then why?

Response- Some customers are not satisfied reason having mainly the uncooperative behavior of bank
employees.

Q.8 Tick the name of banks in Gangapur city whose SB cards are known to you?

Awareness level about SB card credit facilities of different banks

SBI PNB IOB UCO CANARA OBC

42 40 22 14 12 08

28
 no. of respondents

50
40
30
20
10 no. of respondents
0
sbi pnb no. of respondents
iob uco canara obc

Analysis - The credit facilities of SBI and PNB are well known to every respondent.

Q9. Rate the banks for SB card credit facility on the basis of following parameters:

Factors Interest Rate Collateral Attitude of Field Document Renewal

Security officer required process
Banks

SBI

PNB

UCO

OBC

CANARA

IOB

(a)Ranking of banks on the basis of interest rate

29
SBI PNB IOB UCO CANARA OBC
30 27 08 13 08 14

no. of respondents prefering

obc 14

canara 8

uco 13

iob 8 no. of respondents prefering

pnb 27

sbi 30

0 10 20 30 40

Data Interpretation- ranking order-

1. SBI, 2.PNB, 3. OBC, 4. UCO, 5.CANARA & IOB

Analysis - SBI and PNB are the most preferred banks in regard of interest rates.

(b)Ranking of banks on the basis of collateral security requirement

SBI PNB IOB UCO CANARA OBC

26 30 16 10 06 12
DATA INTERPRETATION –

RANKING ORDER-

1- PNB 2-SBI 3- IOB 4-OBC 5-UCO 6-CANARA BANK

30
 no. of respondents

16

10 SBI
PNB
6
IOB
30 6
UCO
CANARA
OBC
26

Analysis-Respondents are very much satisfied with SBI and PNB in respect of collateral security
requirement.

(c)Ranking of banks on the basis of attitude of the employees

SBI PNB IOB UCO CANARA OBC

28 27 20 8 10 07

Data Interpretation-

Ranking order- 1-SBI 2- PNB 3- IOB 4-CANARA BANK 5- UCO 6-OBC

OBC 7
CANARA
10
UCO
8
IOB
PNB 20
SBI 27
28
0 5
10
15
20
25
30

31
Analysis - Respondents appreciate the attitude of employees of the SBI, PNB and IOB.

(d)Ranking of banks on the basis of services

SBI PNB IOB UCO CANARA OBC

26 32 26 06 06 04

NO. OF RESPONDENTS

6
6
26
SBI
PNB
IOB
26
UCO
CANARA
OBC

32

DATA INTERPRETATION-

RANKING ORDER- 1- PNB 2-SBI & IOB 3-UCO & CANARA BANK 4-OBC

Analysis - Respondents appreciate the level of services provided by SBI, PNB and IOB.

(e)Ranking of banks on the basis of documents required

SBI PNB IOB UCO CANARA OBC

28 24 18 12 8 10

DATA INTERPRETATION-

RANKING ORDER: 1-SBI 2-PNB 3-IOB 4-UCO 5-OBC 6-CANARA BANK

32
Analysis - Customers are happy with the document requirement of SBI and PNB.

(f)Ranking of banks on the basis of renewal process

SBI PNB IOB UCO CANARA OBC

38 22 16 08 08 08

DATA INTERPRETATION-

RANKING ORDER- 1- SBI 2-PNB 3-IOB 4-UCO, CANARA & OBC

16
SBI PNB

8 38
CANARA OBC
8

8 UCO IOB
22

Analysis - Customers are very much satisfied with the renewal process of SBI and thanks to SBI card.

Q10. According to you what is the main obstacle while getting finance under SB credit card facility?

Main obstacle while getting finance

(a) (b) (c) (d) (e)

Security Document Red Tapism Guarantee Attitude of Bank
Requirements requirement Employees
24 08 04 08 06

33
 NO. OF RESPONDENTS

security requirements
8
documents
24
red tapism

4 guarantee requirement
bank employees attitude
8

Analysis – Most of the respondents accept the Security requirements are the main obstacle while availing
any credit facility.

Q11. According to you arrange the parameters in the descending order of their preference?

a) Interest Rate b) Collateral Security

c) Services d) Attitude of field Officer

e) Document required f) Validity period

Preference order of different parameters

(a) (b) (c) (d) (e) (f)

Interest Rate Services Collateral Security Attitude of Bank Emp. Document Validity period

42 16 14 12 08 08

34
 no. of respondents
42
45
40
35
30
25 16
20 14 12
15 8 8
10
5
0 no. of respondents

Data Interpretation -

Ranking order of preferences of parameters (decreasing order)-

1- Interest rate, 2- Services, 3- collateral security, 4- attitude of bank employees,

5- Document & Validity period

Analysis - Customers prefer low interest rates followed by services.

Q12. Which banks name comes to your mind first while availing SB Card credit facility?

First choice of banks

SBI PNB IOB UCO CANARA OBC

56 24 10 04 04 02
Data interpretations-

Choice order of Banks- 1- SBI, 2- PNB, 3-IOB, 4-UCO & CANARA, 5-OBC

35
 First choice of banks

4
4 2 SBI
10
PNB

56 IOB
24
UCO
CANARA
OBC

More than half of the respondents prefer SBI followed by PNB.

Q13. What are the inconveniences while using the SB card?

RESPONSES-

1. The bank employees showing indifferent attitude towards this scheme.

2. The calculation of limit of 5 lac is not clear to customers.

3. In evaluation of documents required bank employees asks for bribe, else reject the
eligibility of the customer.

4. Technical errors have been observed like money is credited in the loan account of
customer but in actual customer did not get the credit.

5. Difficulty in remembering the renewal dates, document verification etc.

6. Under the scheme, cumbersome procedural aspects relating to reviews and renewals,
submission of balance sheet, stock statements and other statements are done with credit
delivery made simple and easy but the bank employees practicing nepotism in this.

7. The second category of eligibility of customers that is “B” (Units who do not enjoy credit
limit with us/other banks at present with excellent performance and credential may be
considered) is just to show but in actual there is no criteria of selection of application
made under this category, depending wholly on sole discretion of managers and staff,
leading to illegal practices like nepotism, bribes etc.

36
Q14. What are the inconveniences in repayment rules?

Response-

 The working capital advance may be continued subject to that review every year provided the
credit summations in the account is not less than 50% of the projected sales turnover.
 If the credit summations is less than 50% of projected sales turnover. The outstanding as on the
due date of review should be made repayable in suitable monthly installments.
 The term loan is repayable in suitable installments within a maximum period of five years.
 In case of composite loans, only the term loan is repayable in installments up to a maximum
period of five years.

Q15 what are the inconveniences in submitting documents required by your bank?

Response –

Inconvenient to customers who do not keep proper accounting system cannot take advantage of the credit
scheme even they are playing at large level and having good record and high turnover.

Q16. Do you want to give any suggestions to banks?

Responses

1. Most of the respondents suggest an increase in existing limit i.e. 5.00 lacs

2. Respondents even require further guidance related to few things.

3. PNB is offering the lowest PLR i.e. 11.25% whereas other banks are offering 11.5%, so
the other banks should also reduce their PLR rates.

4. According to most of respondents, PNB is the fastest service provider. It takes only 15
days to disburse the sanctioned loans whereas other banks including SBI takes 40 to 45
days, so the likewise PNB other banks should also provide faster services.

37
 CHAPTER 5
CONCLUSIONS

Objective No. 1: To find out the market potential of SB cards issued by different public sector banks in
Gangapur City.

 Most of the respondents covered in the survey know about the SB card and feel that this facility is
beneficial to them as they can fix the limit for three yeras,
 Respondents even require further guidance related to few things.
 Customers feel very enthusiastic about the launch of SB card in Gangapur city and very sure
about its success.
 Most of the respondents want an increase in existing limit i.e. 5.00 lacs.

Objective no.2: To know customer’s perceptions about various SB card credit scheme of different public
sector banks.
 Most of the respondents like the credit facilities provided by SBI and PNB.
 According to most of respondents, PNB is the fastest service provider. It takes only 15 days to
disburse the sanctioned loans whereas other banks including SBI takes 40 to 45 days.
 PNB is offering the lowest PLR i.e. 11.25% whereas other banks are offering 11.5%

Objective no.3: To compare the SB Cards credit scheme of different banks.

 The credit facilities of SBI and PNB are well known to every respondent.

 SBI and PNB are the most preferred banks in regard of interest rates.

 Customers are happy with the document requirement of SBI and PNB.

 More than half of the respondents prefer SBI followed by PNB.

Objective No.4: To find out main obstacles while getting finance under various SB cards.
 According to most of respondents, security and document requirements are the main obstacles
while getting finance under various credit schemes.

38
 CHAPTER-6
SUGGESTIONS

On the basis of data analysis and interpretations, the following suggestions can be made.

1. RBI should reduce the SLR ad CRR to increase the credit creation capacity of the banks.

2. All the nationalized banks should try to improve their service level to face the stiff competition
given by private banks.

3. Banks should reduce the length between sanction and disbursement of loan.

4. SBI should increase the limit under SBI card to fulfil the growing requirement of the customers.

5. Bank employees should bring more professionalism in their attitude while dealing with customers
to retain and attract more customers.

6. Banks should narrow down the spread between PLR and deposit rates.

7. Banks should advertise and conduct special awareness programmes to make SBI cards more
popular among customers.

39
 CHAPTER-7
LIMITATIONS OF THE STUDY

 The time was very limited as for requirement of study.

 Taking Sample has carried out the study. Therefore, all the limitations associated with sampling.

 Sometimes the respondent does not want to disclose some relevant information.

 The information provided by the respondent may not be authentic.

 The sample size was restricted to Gangapur City only.

40
 CHAPTER 8
APPENDICES

A. BIBLIOGRAPHY

1. RBI Website
 cpolicy.rbi.org.in
2. Websites of Banks
 www.statebankofindia.com
 www.ucobank.com
 www.canarabank.com
 www.orientalbankofcommerce.com
 www.indianoverseasbank.com
 www.panjabnationalbank.com

3. Other websites
 Business Cash Advances - Find Business Cash Advances Vendors, Tips & Advice,
Buying Guides - Business_com.mht
 Pricing and Costs of Small Business Credit Cards - Business Guides & Articles -
Business_com.mht
 SBI Card – SBI Credit Card Offers, Eligibility and Apply « Deal4loans.mht
 Small Business Credit Cards - Find Small Business Credit Cards Vendors, Tips &
Advice, Buying Guides - Business_com.mht
 Compare Business Credit Cards Small Business Credit Cards
ChooseWhat_com_com-.mht
4. Financial News Papers
 Economic Times
 Financial Express
 Business Standard

41
 B. QUESTIONNAIRE

Name ………………………… Age ………………………….

Income………………………... Occupation…………………...

Q1. Are you aware of Small Business card (SB card)?

Yes No

Q2. If yes, from where came to know?

(a) Friends (b) Bank Employees (c) Advertisement (d) Publicity

Q3. Are you availing SB card from any bank?

Yes No

Q4. If yes, from which bank you are availing SB card facility?

…………………………………………………………

Q5.Since when you are availing this facility?

a) More than 3 year b) 2-3 years

c) 1-2 years d) Less than 1 year

Q6. Are you satisfied with your existing bank?

Yes No

Q7. If no, then why?

………………………………………….............................................

Q.8 Tick the name of banks in Gangapur city whose SB cards are known to you?

a) SBI b) PNB c) IOB

42
 d) CANARA e) UCO f) OBC

Q9. Rate the banks for SB card credit facility on the basis of following parameters:

(Scale of Rating- 1-Fully Satisfied, 2-Satisfied, 3-Neutral, 4-Dissatisfied, 5-Very Dissatisfied)

Factors Interest Rate Collateral Attitude of Field Document Renewal

Security officer required process
Banks

SBI

PNB

UCO

OBC

CANARA

IOB

Q10. According to you what is the main obstacle while getting finance under SB credit card facility?

a) Security b) Document Requirement

c) Red Tapism d) Guarantee requirement

e) Attitude of bank employees

Q11. According to you arrange the parameters in the descending order of their preference?

a) Interest Rate b) Collateral Security

c) Services d) Attitude of field Officer

e) Document required f) Validity period

.............................................................................................................................

Q12. Which banks name comes to your mind first while availing SB Card credit facility and why?

43
……………………………………………………………………….........................................

Q13. What are the inconveniences while using the SB card?

.............................................................................................................................

Q14. What are the inconveniences in repayment rules?

.............................................................................................................................

Q15 what are the inconveniences in submitting documents required by your bank?

.............................................................................................................................

Q16. Do you want to give any suggestions to banks?

……………………………………………………………………….....................................

44