A STUDY ON ATTITUDE AND PREFERENCE OF THE DEPOSITORS TOWARDS PUBLIC DEPOSIT SCHEMES

PROJECT REPORT

Submitted by

S. MANOJ KUMAR REGISTER No: 108001123043

in partial fulfillment for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

SRI KRISHNA COLLEGE OF ENGINEERING AND TECHNOLOGY

SUGUNAPURAM, KUNIAMUTHUR, COIMBATORE-641008 JULY 2012

SRI KRISHNA COLLEGE OF ENGINEERING AND TECHNOLOGY SUGUNAPURAM, COIMBATORE -641 008

SCHOOL OF MANAGEMENT

PROJECT WORK JULY 2012

This is to certify that the project entitled A STUDY ON ATTITUDE AND PREFERENCE OF THE DEPOSITORS TOWARDS PUBLIC DEPOSIT SCHEMES is the bonafide record of project work done by

S. MANOJ KUMAR Register No: 108001123043 of MASTER OF BUSINESS ADMINISTRATION during the year 2010-2012. Submitted for the Project Viva-Voce examination held on ________________

----------------------Project Guide

------------------------------Head of the Department

-----------------------Internal Examiner

-----------------------External Examiner

DECLARATION

I affirm that the project work titled A STUDY ON ATTITUDE AND PREFERENCE OF

THE DEPOSITORS TOWARDS PUBLIC DEPOSIT SCHEMES, being submitted in

partial fulfillment for the award of MBA degree is the original work carried out by me. It has not formed the part of any other report submitted for award of any degree or diploma, either in this or any other University.

MANOJ KUMAR .S 108001123043

I certify that the declaration made above by the candidate is true

Dr. R.SUNITHA Assistant Professor School of Management

ACKNOWLEDGEMENT

First and foremost, I thank God the Almighty for the successful completions of this project.

I take this opportunity to thank our Principal, Dr.S.Annadurai, and School of Management, Sri Krishna College of Engineering and Technology providing me an opportunity to do the project.
I take this opportunity to thank our Director, Dr. C. Ramakrishnan, School of Management, Sri Krishna College of Engineering and Technology providing me an opportunity to do the project. My profound thanks to my project guide Mrs. R. Sunitha, Assistant Professor, School of Management, Sri Krishna College of Engineering and Technology, for her valuable guidance and timely help in accomplishing this task. I also express my gratitude in words to Mr. K.S Viswanathan, President and secretary, Sundaram industries limited for providing me an opportunity to undergo the project work in his company. I from bottom of my heart would like to express thanks to my parents, friends and others for their encouragement and support to complete my project work.

MANOJ KUMAR.S

TABLE OF CONTENTS

CHAPTER NO. List of tables List of figures 1.1 About the project 1.1.1 Hypothesis 1.1.2 period of study 1.2 Industry profile

TITLE

PAGE NO. I II 1 2 2 3 3 4 4 5 5 6 6 7 7 7 7 8

1.2.1 TVS group of companies 1.3 Profile of the company 1.3.1 Rubber division 1.3.2 Tyre solution division 1.3.3 Vision and mission 1.3.4 Motto and aim 1.3.5 Concept of 5-s 1.3.6 Technology Of Sundaram Industries Limited 1.3.7 Manufacturing quality 1.3.8 Export of Sundaram Industries Limited 1.3.9 Awards Won By Sundaram Industries Limited 1.3.10 Policies of Sundaram Industries Limited

1.3.11 Acceptance of public deposits 1.3.12 Tenure of deposits 1.3.13 Limits for acceptance of deposits 1.3.14 Free Reserves & Paid Up Capital 1.3.15 Position of deposits accepted 1.3.16 Procedure for Invitation of accepts deposits 1.3.17 Public Deposits 1.3.18 Form and particulars of Advertisement 1.3.19 Content of the Advertisement 1.3.20 Register of Deposits 1.3.21 Return of Deposits 1.3.22 Power of Central Government 1.3.23 Penalty 1.3.24 Maintenance of Liquid Assets 1.3.25 Terms and Conditions of Deposits 1.3.26 Management of public deposit 1.3.27 Services offered to the depositors 1.3.28 Financial results of the company 1.3.29 Conclusion 1.4 Review of literature 1.5 Objectives 0f the Study 1.6 Scope of the Study 1.7 Research methodology 1.7.1 Research Design

8 9 9 10 10 12 12 13 13 14 14 15 15 15 16 22 25 26 26 27 33 33 34 34

1.7.1.1 Sampling Technique 1.7.1.2 Statistical tools used 1.7.1.3 Limitations of the Study 2. Data analysis and interpretation 2.1.1 Percentage analysis 2.1.2 Anova 2.1.3 Independent t-test 2.1.4 Correlation 2.2 Findings of the study 3 Suggestions and conclusion 3.1 Suggestions 3.2 Conclusion Appendix I Questionnaire Appendix II Bibliography

34 34 36 37 37 47 49 51 53 56 56 58 59 63

LIST OF TABLES

Tables
1.3.14 1.3.15 1.3.24 1.3.25.4 1.3.25.6 1.3.26.2

Particulars
Paid up capital and free reserves from the period of 2005-2010 Position of deposits accepted by the period of 2005-2010 Liquid Asset Maintenance for the period of 2005-2010 Term Deposit Scheme interest rates Cumulative deposit scheme interest rates Term deposit scheme bi-monthly interest

Page No
10 11 16 17 18 22 23 24 26 37 38 39 40 41 42 43 44 45 46 47 48 49

1.3.26.3 Term deposit scheme-Quarterly interest 1.3.26.4 1.3.28 2.1.1.1 2.1.1.2 2.1.1.3 2.1.1.4 2.1.1.5 2.1.1.6 2.1.1.7 2.1.1.8 2.1.1.9 2.1.1.10 2.1.2.1 2.1.2.2 2.1.3.1 Cumulative deposit scheme Profit and dividends Marital Status Monthly income Monthly savings Online fund transfer Regular payment of interest Promt repayment of principal Friendly service Easy procedure Safety of principal Reputation of the company Reputation and promt Safety and fixed deposit regular payment, promtpay and friendly service with independent t-test

Tables
2.1.3.2 2.1.4.1 2.1.4.2

Particulars
Compare with share bond and mutual fund gold and insurance with correlation NSc and fixed deposit with correlation

Page No
50 51 52

LIST OF FIGURES
FIGURE NO 2.1.1.1 2.1.1.2 2.1.1.3 2.1.1.4 2.1.1.5 2.1.1.6 2.1.1.7 2.1.1.8 2.1.1.9 2.1.1.10 Marital Status Monthly income Monthly savings Online fund transfer Regular payment of interest Promt repayment of principal Friendly service Easy procedure Safety of principal Reputation of the company LIST OF FIGURES PAGE NO 37 38 39 40 41 42 43 44 45 46

1.1 ABOUT THE PROJECT

Finance is the lifeblood for any business organization, the success of the business depends upon the available and optimum utilization of finance. It may be defined as the provision of money at the time when it is required. There are various modes through which a company can augment its financial requirements. One of such sources is Acceptance of Public Deposit. Public deposits are an important source of financing the medium term and long term requirements of the company. The term Public Deposit implies any money received by a company through the deposits or loans collected from the public. The Public includes the general public, employees and shareholders of the company but excludes the money relieved inform of shares and debentures. Acceptance of deposits by the companies on a large scale from the public had its beginning in early sixties when companies engaged in textile manufacture in Coimbatore and Ahmadabad started issuing advertisements openly inviting deposits from the public offering attractive rates of interest, Until 1966, there were no restrictions of any kind over this practice and hence, all types of companies started accepting deposits. In recent years, there have been several instance of failure by many companies to refund the deposits on their maturity. In other cases, there has been default by the companies even in the payment of interest due periodically on the deposits. Hence, RBI stepped in the scenario and exercised its power under chapter 111 B of RBI Act, 1934. Separate directions applicable to both Non-Banking Financial companies (NBFCS) and Non-Banking Non-Financial companies (NBNFCS) were \ issued in 1966 and to miscellaneous companies in the year 1973. Acceptance of public deposits is a unique feature of Indian financial system and there is no such practice abroad of such direct acceptance of deposits by the companies. Since early sixties, the company deposit market has grown by leaps and bounds. Today, company deposit market has grown to approximately Rs.25000 Crores with a width of around 5 million depositors hundreds of top companies belonging to reputed industrial houses like Tata Birla, Escort, crodves, Tvc etc and Government company like HUD co are accepting deposits from the public.

The Companys fixed deposits are quite popular among the investing community as it bears a higher rate of interest, more safe. The degree of risk borne by the saver is generally much greater if he hold deposit claims with Non-Banking Companies. These deposits are unsecured, that is they are not backed up by any of the assets of the company. But the interest is compounded every quarter (or) half year with amplifies the returns.

1.1.1 Hypothesis
To find out whether there exists any significant difference between respondents based on

the gender and online interest payment. based

To find out whether there exists any significant difference between respondents on the Gender and Attitude about the deposit schemes (Easy Procedure).

1.1.2 Period of Study

The study covers a period of five financial years from 2005-06 to 2009-10 such data have been collected from the corporate office of SICMDU.

1.2 INDUSTRY PROFILE SIL is a flagship company of the prestigious TVS group. The company was incorporated on 19th may 1943 under the companies act, 1956. It was promoted by TVS as a wholly owned subsidiary company of TVS Iyangar and sons ltd. The company has three divisions viz rubber division, tyre solutions divisions and solid tyre divisions.

1.2.1 TVS group of companies The TVS group has its origin over decades. The company was established in the year 1913 by Late Mr. T. V. Sundaram Iyengar (Founder). It is considered to be the 15th biggest industries in the country. Companies with a work force of more than 30000 with an annual turnover of approximately Rs. 3000 crores.

1.3 PROFILE OF THE COMPANY SIL is a deemed public company by virtue of sec 43 (A) of companies Act, 1956. It is closely held company where majority of the shares are held by the TVS and sons limited ( Holding Company) and the remaining shares are held by the families of the founder. There are three divisions of the company viz., Rubber Division, Tyre Solutions Division and Solid Tyre Division. Rubber division manufactures automobile rubber products in India and has established dominant position in the market place of focusing on a single goal to achieve a total customer satisfaction. The company is evolved from the conceptual states of defining the customer needs, production of quality products and adherity to delivery commitments. TVS Rubber has evaluated the term Customer satisfaction to new heights. TVS Rubber is a part of TVS group, the largest components manufactures in India.

1.3.1 RUBBER DIVISION The rubber division was started in the year 1962. The company manufactures rubber products for the export and inland markets. Rubber division has two manufacturing units. One at Kochadai, Madurai which mainly caters to the need of automobile industry in south India and the other in New Delhi. The main object of rubber division is manufacturing of automobile rubber products to be fitted into various sizes of cars. The brand name of the product is TVS Rubber and it is considered to be The best in India and second in Asia. This division offers a wide range of quality products for the following segments.

Automobile: Vehicle manufactures and system manufactures. Non Automobile: Industrial, dyence electrical, electronics, mining thermal, telecom, railway and white goods and the products are.

Diaphragms Grommets Dust Covers Gaskets Tank Wheel Urbanization

4

Over the last decade, the company has made conscious efforts to increase exports of its products. Presently, the goods are exported to countries like UK, USA, Germany, Japan, Taiwan, Korea etc. Couple of years back the division has opened a full-fledged warehouse in USA to serve the automobile industry there which follows the latest cost reduction technique called Just In Time.

1.3.2 TYRE SOLUTION DIVISION It has twenty three servicing units all over India. Its central administration office is at Chennai. The division is doing servicing i.e. re-treading of all sizes of worn out tyres. Tyres re- treading is using the latest technology, using cold curing process for re-treading of tyres. The brand name of the product is TVS TREAD with a work force of 1100 employees.

1.3.3 VISION AND MISSION OF SUNDARAM INDUSTRIES LIMITED:

Vision:

To be a company with the highest profitability in the industry by consistently exceeding the customer expectation.

Mission:

To maintain leadership in automotive segments To increase overall productivity To achieve zero customer complaint status To improve performance in development of products To grow in exports replacement and non-auto segments

1.3.4 MOTTO AND AIM OF SUNDARAM INDUSTRIES LIMITED:

Motto: The company drives its division with its motto performance overtakes promise

Aim: 1. Zero breakdown 2. Zero defect 3. Zero accident 4. Zero mould failure 5. Zero customer complaint 6. Increase overall plant effectiveness by reducing losses 7. Education and multi skill development 8. To create give, clear and pleasuring work environment 1.3.5 Concept of 5-s in SUNDARAM INDUSTRIES LIMITED The Japanese concept of 5S in insisted in the division and every employee is made known his role in 5S. Also executives are given the responsibility by taking care of each S and there by taking continuous efforts for functioning this concept. The 5S concept refers to:

SEIRT SEITON SEISO SEILETSU SHITUSKE

Proper arrangement and Tidiness Orderliness Cleanliness Standardization Discipline and Training
6

1.3.6 Technology Of Sundaram Industries Limited: The company has sophisticated machines in their factory. In rubber division 30 to 40 percent of machines are improved. The machineries are operated by specialized and technical persons. Research and development unit, which is recognized by the ministry of science and technology. Department of scientific and industrial research, Government of Indian.

1.3.7 Manufacturing quality: The rubber division has the latest state of the art equipment and their manufacturing processes are based on the lean manufacturing system. The beneficial elements of the system such as Kaizen, effectiveness and efficiency through a highly skilled work force Rubber division offers its customers the finest quality in any product category, quality is built in at all stages of activity through continuous improvement of its process by internalizing the principles of TPM (Total Production Management).

1.3.8 Export of SUNDARAM INDUSTRIES LIMITED: Expanding opportunities and breaking geographical barriers, TVS rubber has made great in roads into the global market with a reputation of consistent quality innovation and superior service. At present rubber parts are exported to USA, UK, GERMANY, ITALY, DENMARK, GREECE, FRANCE, AUSTRALIA, SINGAPORE, MALAYSIA, LABANON and MIDDLE EAST. To serve the automobile industry in USA the company has opened a fully fledged warehouse in USA which offers the cost reduction technique called JIT (just in time). 1.3.9 Awards Won By Sundaram Industries Limited

The company has received the TPM excellence award. In 2006, the company has achieved TPM consultancy award. TVS Rubber is accredited of QS9000 and ISO-9001 standard and the division has been receiving prestigious awards from Maruty Udyog Limited for the last three years in succession since 2007. The division has also won the TPM experts from Japan.
7

1.3.10 Policies of SUNDARAM INDUSTRIES LIMITED

Quality policy: To achieve customer satisfaction through manufacture and supply of quality products that meet customer satisfaction.

Safety Policy: To achieve zero accident by creating and maintaining on safe work method and practice to all employees. In this day to day operations by constantly maintaining safety health and environment standard.

TPM policy: To become a world class organization by continuously enhancing performance of people machine, products and practices through TPM. 1.3.11 ACCEPTANCE OF PUBLIC DEPOSITS

There was no control over the public deposits till Reserve Bank of India assumed the power to regulate acceptance of public deposits from February 1964. For the purpose of exercising regulatory control over the public deposits market, companies are classified as Non-Banking Finance Company (NBFC) Non-Banking Non Finance company (NBNFC)

Non-Banking Finance Company NBFC means a company whose principal business is financing in whatever forms but not qualities enough to be called a Bank as defined in the Banking Regulation Act 1979.NBFC include an investment or a hire purchase or a lease company or a mutual benefit financial company. Non-Banking Non Finance company NBNFC include all manufacturing companies, trading companies engaged in shipping, mining, hotel business and transportation. These companies are regulated by companies (Acceptance of deposits) rules 1975. Thus, the function of regulating the acceptance of deposits from public by NBNFC now vests with the central government; sec 58A of the companies Act 1956 has empowered the central government to frame such rules in consultation with RBI, prescribing the limits. The manner and the condition subject to which deposits may be invited and accepted by such companies.

1.3.12 Tenure of deposits: A company shall accepts or renew deposits which are repayable on demand or on notice or after a period of less than 6 month or more than 36 month from the date of acceptance or renewal of such deposits. 1.3.13 Limits for acceptance of deposits: Under Rule 3(20) of the companies (Acceptance of Deposits) Rules 1975 a company other than a Government company can accept deposit subject to the following ceiling. 25% of the aggregate of paid up share capital and free reserves minus miscellaneous expenses not written off, if any, In addition to the above limit, the company can accept deposits against unsecured debenture or deposit from shareholders or deposits guaranteed by any other person who at the time of giving the guarantee is a direction of the company up to a share capital and free reserves.
9

1.3.14 Free Reserves & Paid Up Capital: Free reserves is defined as the aggregate of the balance in the share premium account, capital and debenture redemption reserves and any other reserves shown or published in the balance sheet of the company and created through an allocation of profits not being a reserve created for repayment of any future liability or for depreciation in assets or for bad debts or a reserve created by revaluation of the assets of the company. Paid up share capital is that part of the subscribed share capital for which consideration in cash or otherwise has been received. It is also the total amount paid up or credited as paid up on the subscribed capital. Table 1.3.14 Shows paid up capital and free reserves from the period of 2005-2010. Year Paid up capital Free reserves Miscellaneous expenses 100 142.38 174.60 193.67 213.38 501.23 Total Index

written off 2004-2005 252 2163.65 91.51 2324.14 2005-2006 252 3092.00 34.89 3309.11 2006-2007 252 3816.18 10.21 4057.97 2007-2008 252 4249.22 4501.22 2008-2009 252 4707.25 4959.25 2009-2010 252 11397.40 11649.4 Source: Secondary Data: Compiled from the records of the company.

It is observed from the table 1.3.14 that the index of the aggregate of paid up capital and free reserves after adjusting the miscellaneous expenses showed an increasing trend throughout the study period. Although, the company has earned a free reserve of Rs. 11397.40 in the year 2009-2010, this is much higher than the previous years because of profit on rate of investment. 1.3.15 Position of deposits accepted The company can accept deposits up to 25% of aggregate of paid up share capital and free reserves. In addition to this, the company can accept deposits against unsecured debenture or from shareholder or any deposits guaranteed by any director to the maximum of 10% of the aggregate of paid up are capital and free reserves.

10

Table 1.3.15 Shows position of deposits accepted by the period of 2005-2010. Year 25% of the aggregate 10% of the aggregate Deposits Index for the paid up capital and of paid up capital (Rs in lakhs) deposits free reserves and free reserves less miscellaneous expenses as any deposit against and unsecured debenture or from share holder or any deposits guaranteed by any director

2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

581.04 827.28 1014.49 1125.30 1239.81 2929.98

232.41 330.91 405.80 450.12 495.92 1171.99

268.99 204.78 165.90 168.90 154 158.8

100 76.12 61.67 62.79 57.25 59.04

It is observed from the table 1.3.15 that the total quantum of deposits accepted by the company showed a mixed trend during the study period. This is due to the management decision of the company on acceptance of public deposit

SUNDARAM INDUSTRIES LIMITED has Rs 252 lakhs as capital and Rs 11,397.40 lakhs as reserve and surplus at the end of financial year 2009-2010 and can raise upto Rs 2.929.98 lakhs as deposits. The actual quantum of deposits held on 31st march 2010 is Rs 158.82 lakhs which is only 5% of the eligible limit.

11

1.3.16 Procedure for Invitation of accepts deposits: The procedure for invitation or acceptance of deposits are as per sec 53B (2) of the companies (Acceptance of Deposit) Rules 1975. These rules come into force with effect from third February 1975 and have been amended several times. The important features of rules on public deposit by the Non-Banking Corporate Sector are as below: 1.3.17 Public Deposits: The companies (Acceptance of Deposits) Rules 1975 defines public deposit as any deposits of money with and includes any amount borrowed by a company but does not include. Any amount received from or guaranteed by central government. Any amount received as a long from any banking company or from the SBI Any amount received as a long from the financial institutional Any amount received by a company from any other company Security deposit received from an employee or agent Advance recovered for supply of good and services Any amount received towards subscription of shares or debentures and also pending allotment and calls in advance Any amount received in trust Any amount received from a director of a company Bonds or debenture secured by mortgage of immovable property of a company with conversion options

12

1.3.18 Form and particulars of Advertisement: The company intending to invite deposits shall issue an advertisement in a leading English newspaper and in one vernacular newspaper circulating is situated. Advertisement should be field with the register of the company.Such advertisement may be issued only on the authority and in the name of the board of directors of the company. The advertisement must state the date on which the board of directors approved the text advertisement. SUNDARAM INDUSTRIES LIMITED normally has its board meeting in the month of September every year and decides about the acceptance of public deposits in the year to come. The advertisement regarding such acceptance shall be put in the newspaper in the last week of September and fresh acceptance of deposits shall be started from 1stOctober every year. 1.3.19 Content of the Advertisement A. Name of the company B. Date of incorporation C. The business carried on by the company and its subsidiaries with the details of branches on units if any D. Brief particulars of the management of the compnay E. Name and address and occupation of the directors F. Profit of the company before and after making provision for the three financial year immediately preceding the date of the advertisements G. Dividend declared by the company in respect of said years H. A summarized financial position of the company as in the two audited balance sheets immediately preceding the date of advertisement I. The amount which the company can raise by the way of deposits under these rules and aggregate of deposits actually held on the last day of the immediately preceding financial year J. The statement showing the amount of overdue claims other than the unclaimed deposits K. The following declarations must also be given in the advertisement.

13

i) That the company has compiled with the provisions of these rules. ii) Compliances with these rules do not imply that repayment of the deposits is guaranteed by the central Government iii) The deposits accepted by the company are unsecured liabilities. iv) The company is not in default in the repayment of any deposits or part thereof of any interest. There upon in accordance with the terms and conditions of such deposits. v) The advertisement issued in accordance with these rules is valid. until the expiry of six months from the data of closing of the financial year in which it is issued or the date of on which the balance sheet is laid before the company in general meeting whichever is earlier. 1.3.20 Register of Deposits A company accepting deposits shall keep at its records and registers at head office on which there shall be entered separately in the case of each depositor the following particulars: a) Name and Address of the depositor b) Date and Amount of each deposit c) Duration of the deposit and date on which each deposit is repayable. d) Rate of Interest. e) Date or dates on which payment of interest will be made f) Any other particulars relating to the deposits. 1.3.21 Return of Deposits A company to which these rules apply shall on or before the 30th day of June of every year, file with the Register of Companies, the prescribed form furnishing the information contained therein as on the 31st March of that year duly certified by the Auditors of the company. A copy of the said return shall also be simultaneously furnished to RBI.

14

1.3.22 Power of Central Government If any question arises as to whether these rules or regulations are not applicable to the particular company, such question shall be decided by the central Government in consultation with the Reserve Bank of India. 1.3.23 Penalty

Rule 11 provides that any contravention for which no punishment is provided in the act is punishable with fine up to Rs 500 and for continuous contravention. 1.3.24 Maintenance of Liquid Assets The company should maintain liquid assets to the extent of 15% of the deposits maturing during the financial year ending 31st March. The amount shall be deposited or invested before 30th April of each year in the permitted investments specified by the companies (Acceptance of deposits) Rules, 1975. The permitted investments are:

a) b) c) d)

Deposit held with a scheduled bank free from lien of charge. In encumbered securities of Central of State Government. In encumbered securities approval under Indias Trust Act, 1882. In encumbered bonds by Housing Development Finance Corporation Ltd.

15

As per the Companies (Acceptance of deposits) Rules, 1975, liquid assets have to be created on or before 25th April every financial year closure.

Table 1.3.24 Shows Liquid Asset Maintenance for the period of 2005-2010.
YEARS Maturity as on 31st march of the financial years (Rs in Lacs) 148.17 80.04 61.74 74.89 70.16 Index for maturity amount 100 54 42 51 47 Liquid asset created at % (Rs in Lacs) 22.23 12.00 9.26 11.23 10.60 Index for Liquid Assets 100 54 42 51 47

2005 2006 2006 2007 2007 2008 2008 2009 2009 2010

Source: Secondary data-Compiled from the records of the company It is seen from the table 1.3.24 that the index of the maturity amount and the index for the liquid assets showed a mixed trend during the study period. It is also observed that the company has maintained the statutory requirement of 15 per cent of the maturity amount at the end of each financial year promptly. 1.3.25 Terms and Conditions of Deposits Terms and conditions are the ser of orderly procedures to be followed uniformly throughout the process. Acceptances of public deposits also have similar set of terms and conditions which are followed by the company. 1.3.25.1 Quantum of Deposits Deposits are accepted in multiple of Rs.1000 subject to a minimum of Rs.3000 for deposit account and accompanied by the prescribed application form which can be had from the company. As a general rule, the deposit amount is not accepted in the form of liquid cash. The deposit amount shall be paid to the company by means of an Account Payee Cheque or a Crossed Cheque or a demand draft on a scheduled bank drawn in favour of Sundaram Industries Ltd, payable at Madurai.
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1.3.25.2 Period of Deposit

The period or deposit will be one year, two years and three years provided that the company may at its discretion accept/ agree to extend deposits for any period on such terms as may be prescribed.

1.3.25.3 Resident

Deposits are accepted only from residents for joint deposits. The number of depositors shall not exceed two in number. Such joint depositors will be accepted on FORMOR OR SURVIVOR basis only.

1.3.25.4 Interest Rate

The following table depicts the various interest rates for the term deposits scheme I. The interest rates are applicable from 1st Oct 2010. Table 1.3.25.4 Shows Term Deposit Scheme interest rates.
Period of Deposit Rate of Interest Rate of Interest 1 year 7.52 % 7.55 % 2 years 8.53 % 8.56 % 3 years 9.03 % 9.07 % Frequency of Payment of Interest Bi Monthly Quarterly

Source: Secondary data: Application form as per annexure It is seen from the Table 1.3.25.4 that the rate of interest is higher in case of three years deposits and the quarterly payment of interest carries a higher interest rate than the bi-monthly interest rates.

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1.3.25.5 Accrual of Interest Interest will accrue from the date of realization of cheque or draft where interest is payable on bi-monthly basis (once in 2 months), it will be upto 31st January, 31st March, 31st May, 30th July, 30th September and 30th November and as on the date of maturity. 1.3.25.6 Mode of Interest Payments

Interest was paid by means of interest warrants on the companys banker viz., State Bank of India, Madurai for which the company maintains as separate current account in the same bank. Such payments of interest through interest warrants are now replaced from 1st April 2010 by online fund transfer of interest to the respective depositors account by proper systematization of NEFT. In case of deposits that are received during the last 15 days of the 2 months period (in case of bi-monthly interest) and 3 months period (in case of quarterly interest), interest for such broken period are paid along with the interest for the next period for administration convenience. The following table depicts the minimum amount of deposit in cumulative deposit scheme-II with the various periodicities and the amount payable on maturity with the annual yield. Table 1.3.25.6 shows Cumulative deposit scheme interest rates.
Period of Deposit Min Amount Amount Payable on Maturity For Every Additional Investment of Rs. 1000/- Rupees 1078 1184 1309 Annual Yield % PA

One Year Two Year Three Year

3000 3000 3000

3233 3554 3926

7.76 9.23 10.29

Source: Secondary data: Application form as per annexure

It is seen from the Table 1.3.25.6 that the annual yield on the amount of deposit for various periodicity shows an increasing trend ranging from 7.76 per cent for one year, 9.23 per cent for two years and 10.29 percent for three years of deposits.
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1.3.25.7. Joint Deposits

The company accepts the deposits in joint names, but it should not exceed two members both the joint deposits holders must sign the application. Incase of joint deposits, all correspondence will be addressed to the person whose name appears first on the deposit receipt. All cheques/drafts/warrants for the payment of interest and/or principal amount will also be drawn in favour of the first named depositor irrespective of any instructions to the contrary. Any discharge by the first named depositor for payment of interest and/or the principal amount shall be valid and binding on the joint holders and shall constitute a good discharge to the company. The first named depositor will for all purposes be deemed as the beneficial owner of the deposit and will be treated as payee for purposes of deduction of tax under section 194-A of the Income Tax Act, 1961. In the event of the death of the first named depositor, all payments on accounts of principal and/or interest will be made to the survivor on furnishing a death certificate of the depositor first named and the company shall not recognize any other heir or legal representative as being entitled to claim the principal and/or interest on the deposit. In the event of death of a sole depositor or both the joint depositors, the amount/principal and/or interest shall be paid to the heir/s that produce to the satisfaction of the company succession certificate/letter of administration/probate of will from a competent jurisdiction in respect of the decreased which should cover the deposited amount. 1.3.25.8. Tax Deducted At Source 1. Income tax wherever applicable, will be deducted at source from the interest payable in terms of provision of the Income Tax Law in force from time to time. Non- assesses can furnish declaration in the prescribed forms, Form 10, Form 15H so that tax may not be deducted at source. 2. Where a depositor holds deposit in his individual name as well as jointly with another, interest paid on these deposits would be aggregated for the purpose of tax deduction at source, if applicable. 3. At present, tax is deductible if the aggregate amount of interest paid or payable during the financial year exceeds Rs.5000/19

1.3.25.9 Change of Address

Intimation to the company regarding change of address, tax exemption and other communications should be send so as to read the company at least 30 days before the date of which the next payment of interest falls due, to be acted upon. Interest will cease to accrue from the date of maturity of deposit. Excess interest paid if any will be deducted from the principal amount at the time of repayment of deposit.

1.3.25.10 Renewal and Repayment a) It is not obligatory on the part of the company to give any intimation or motive with regard to due date of maturity of deposits. b) For renewal, the term/cumulative deposit receipts should be surrendered duly discharged without revenue stamps; along with the renewal application form duly filled in and signed by the depositor before the date of maturity. c) For repayment, the term/cumulative deposit receipt duly discharged on a Rs.1. revenue

stamp must be surrendered to the company at least one month before the date of maturity and enable the company to repay the deposit amount on the due date. d) Repayment of principal amount will be made only by means of an Account Payee cheque/draft drawn on companys Bankers at Madurai. e) Notwithstanding the period fixed for repayment of deposit the company reserves as it

opinion the right to repay any of the deposits at any time before the date of maturity but not before six months from the date of deposit/renewal. f) The company reserves the right not to repay the deposit before the date of maturity. On

deciding to repay a deposit at the request of the depositor before the date of deposit/renewal, the rate of interest payable on such deposits shall be in accordance with the provision of the companies (Acceptance of Deposits) Rules,1975 as amended from time to time.

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1.3.25.11 Deposit Receipt

In the event of loss or destruction of mutilation of a deposit receipt or interest warrant or cheque or income tax deduction certificate, the company, as its sole discretion to issue a duplicate subject to compliance by the depositors with such terms and conditions including indemnity as the company may stipulate. All expenses in this connection will be borne by the depositors. The deposit receipts are not transferable or negotiable. 1.3.25.12. General a) The company will not accept or recognize any lien assignment charge or other encumbrance on the deposit or receipt there on.

b) Where the due date of any payment fails on a holiday to the company the payment will be made on the next working day.

c) The company reserves the right to reject any application for deposit or for renewal of deposit without assigning any reason thereof.

d) The acceptance, renewal, repayment of deposits and interest payment are subject to the companies (Acceptance of Deposits) Rules, 1975 and amended from time to time and are subject to jurisdiction of Madurai only.

e)

Nomination facility is available, but the nominee shall not be a joint depositor. The

prescribed form of nomination can be had on request.

f)

Ban charge/DD commission if any incurred by the depositors on matters relating to

deposits will have to be borne only by the depositors.

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1.3.26 MANAGEMENT OF PUBLIC DEPOSIT

Methods of rising and managing public deposits are complex in nature and hence adequate care must be taken in each and every step in such process. The management of public deposit scheme by the study unit, the Sundaram Industries Limited has been studied in this chapter. 1.3.26.1 Types of deposit schemes

Public deposits accepted are classified as unsecured loans to the company. As per companies (Acceptance of Deposits) rules, 1975, No company with a net owned fund of less than Rs. 1 crore shall invite public deposits and such amount raised by way of deposits shall not exceed 25% of aggregate of paid-up capital and free reserves. The deposits are classified into two categories on the basis of interest payments to the deposit holder. The following are the two types namely, term deposits and cumulative deposits. Under term deposits, the interest is paid once in two months and once in three months. But in cumulative deposit, is paid only as on the date of maturity. The interest is calculated, compounded on the monthly basis. The term deposits and cumulative deposits are accepted for one, two and three years terms.

1.3.26.2 Term deposit scheme bi-monthly interest The interest rate in respect of bi-monthly interest yielding term deposits scheme and comparison of interest rate for the period of 5 years from 2005-2006 to 2009-2010is shown in the following table. Table 1.3.26.2 Comparison of interest rate for a period of 5 years Term deposit scheme- Bi-monthly interest Years 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 I Year Interest 6.52 % 7.52 % 9.03 % 9.03 % 7.52 %
22

2 Years Interest 7.02 % 8.03 % 9.54 % 9.54 % 8.53 %

3 Years Interest 7.52 % 8.53 % 10.04 % 10.04 % 9.03 %

Source: Secondary data compiled from the records of the company It is seen from the table 1.3.26.2 the interest rates are increasing in the first three years, in the fourth year the interest rate does not change and the interest rate decrease in the next year of comparison It is to be observed that the interest rates are higher for the 2 and 3 years deposits. The reason for decrease in the interest rates is the match with the prevailing bank rate in the economy as per RBI guidelines.

1.3.26.3 Term deposit scheme-Quarterly interest

The interest rate in respect of quarterly interest yielding term deposit scheme and the comparison of interest rate for the period of five years from 2005-2009 to 2009-2012 is shown in the following table.

Table 1.3.26.3 Comparison of the interest rate for the period of 5 years Term deposit scheme-Quarterly interest Years 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 I Year Interest 6.54 % 7.55 % 9.07 % 9.07 % 7.55 % 2 Years Interest 7.04 % 8.05 % 9.58 % 9.58 % 8.56 % 3 Years Interest 7.55 % 8.56 % 10.08 % 10.08 % 9.07 %

Source: Secondary data compiled from the records of the company

It is seen from the table 1.3.26.3 the interest rates are increasing in the first three years, in the fourth year the interest rate does not change and the interest rate decrease in the next year of comparision It is to be observed that the interest rates are higher for the 2 and 3 years deposits. The reason for decrease in the interest rates is the match with the prevailing bank rate in the economy as per RBI guidelines.

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1.3.26.4 Cumulative deposit scheme

The interest rate in respect of bi-monthly interest yielding term deposit scheme and the comparison of interest rates for the period of 5 years from 2005-2006 to 2009-2010 is shown in the following table.

Table 1.3.26.4 Comparison of interest rate for the period of 5 years Cumulative deposit scheme Years 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 I Year Interest 6.70 % 7.76 % 9.38 % 9.38 % 7.76 % 2 Years Interest 7.49 % 8.64 % 10.42 % 10.42% 9.23 % 3 Years Interest 8.38 % 9.64 % 11.61 % 11.61 % 10.29%

Source: Secondary data compiled from the records of the company

It is more evident from the table 1.3.26.4 that the interest rate of cumulative deposit for the period of 2005-2006 to 2009-2010 are increasing in the first 3 years and the interest rates decrease in the next following 2 years. The reason for decreasing in the interest rates is the match with the prevailing bank rate in the company as per RBI guildelines and also decrease in 1 year and 2 year deposits

24

1.3.27 Services offered to the depositors:

SIL offers the following services voluntarily to the deposit holders in order to keep a cordial relationship with them.

Renewal Intimation: The Company informs the deposits holders 30 days before the date of maturity regarding renewal along with renewal application.

Remainder for un-presented interest warrants:

On the basis of reconciliation of interest

warrant, the company duly reminds the deposit holders to whom the interest warrants were issued but not presented for payments. In discussion with the person in-charge of public deposits of Sundaram Industries, it is noted that reconciliation work and remainder to the deposit holders for presenting the interest warrants was laborious and now that such heavy work load is offloaded because of online interest transfers to the respective deposit holders account.

Band charges:

Bank charges in connection with refund of deposits accrued interest and

collection charges for interest warrants are borne by the company and instruments are exchangeable at par at sixty centres of State Bank of India. Such centres of State Bank of India were mentioned in the interest warrants itself earlier. As the company is practicing a novel idea of transfer of funds to the depositors bank account directly, such charges are almost avoided.

Ceiling of rate of interest:

The interest payable on the deposits cannot exceed 15%. The

interest rate cannot be computed by periods shorter than monthly interest rules. Moreover, the rule does not specify whether the interest should be simple of compounded. As on date, Sundaram Industries ltd has no practice of having brokers for collection of deposits.

25

1.3.28 Financial results of the company: The profit before tax and after tax and the dividends by the company during period of ten years from 2001 and 2010 have been presented in table below. TABLE 1.3.28 PROFIT AND DIVIDENDS Profit before tax Period 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 1.3.28 Conclusion 939.06 556.10 820.10 1788.23 1921.88 2606.58 1417.47 1408.96 939.06 522.10 715.10 1558.23 1861.88 2287.58 1098.47 1279.96 Profit after tax Dividend Rs in lakhs Amount 675.36 201.60 395.64 1065.96 703.08 1408.68 546.84 713.16 % 268 80 157 423 279 559 217 283

2009-2010 8658.60 8288.35 1386.00 550 Sundaram Industries Ltd is a pioneer company in Madurai, backed up by the prestigious TVS Group one of the market leaders in the industry. It is obvious that the company has a high motto which is being achieved in day to day business of the company. The practice of high ethics of the business and the latest management concepts augment the best customer service.

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1.4 REVIEW OF LITERATURE

A brief review of literature would be of immense help to the researcher in gaining insight into the selected problem. The researcher would gain good background knowledge of the problem by reviewing certain studies.

Robert C. Vogel and Paul Burkett (Jul., 1986) This journal tells that A growing number of successful savings-mobilization programs in developing countries, together with related studies, indicate that safe, liquid deposit of reasonable yield can be crucial in raising the incomes of no wealthy households. This is especially true under the inflationary conditions so common in developing countries where the value of cash balance is rapidly eroded, thereby forcing no wealthy households to save in the form of inflation hedges that often entail high transaction and storage costs. Although some dissent continues, there is growing recognition that adequate yields on deposits at FIs and other financial assets are essential.

Sandhu H.S & R.K. Goswami (1986). This journal reveals that when the banking system increases its credit to meet the increased demand for credit in a growing economy, the cheques drawn are paid out to various parties. Who in turn deposit these in their respective banks. Consequently, deposits in the banking system is increase. A part of the credit extended would be withdrawn in cash and only a balance would stay with the banks as deposits. However the author were of the view that the demand for deposits would be considered to be an increasing function of bank credit.

27

Dr. S. Raj Kumar (April 2005). He concluded that the growth of the financial system is, indeed, vital to the process of economic development in any economy as it helps to mobilize savings and channelize them in various sectors of the economy for the purpose of growth and development. Economic development may be defined as a progress where by an economys real national income increases.Thus, economic development refers to both process as well as an increase in the real national income. A rise in the real national income is the growth of the economy. Economic development is, thus, the cause or process whereas economic growth is its effect or result. It may be said that economic development includes variations in the supply of factors of production on the one hand and demand for the products based on economic and non-economic factors on the other. But, the economic growth is the outcome of this long process of development.

Ghosh, Saibal and Das, Abhiman (2006):

The paper traces

the determinants of

depositor discipline in Indian banking. Using data for the period 1997:1 to 2002:4, the findings reveal that, while bank-specific factors are dominant in case of state-owned banks, systemic variables tend to overwhelm bank-specific factors in explaining behaviour of depositors of private banks. In case of private and foreign banks, policy announcements have an important bearing on the dependent variable. For state-owned banks, larger asset translates into higher deposit growth, suggesting that depositors are sensitive to the too-big-to-fail effect. Finally, insured depositors tend to exercise discipline by compelling banks to pay a higher price on deposits.

Anand Singh Kablana, Vikas Kumar, Shelindar Kumar(March 2011).. (A Co-operative Bank of Gujarat). It reveals that deposits are the main source of funds for any banking institutions and as well as DCCB Ltd. The amount mobilized deposits are then lent in the form of advances. The higher the amount of deposits mobilized, the higher is the funds lent. The growth of deposits depends on savings. For economic growth to take place, it is essential saving are mobilized and channelized for capital formation which, in turn,

accelerates economic growth. Co-operative banking is an important financial intermediary in rural areas between savers and borrowers. DCCB mobilized by accepting deposits.

28

International Research Journal of Finance and Economics (2007) At present, in the Turkish Republic of Northern Cyprus (TRNC), there is a limited guarantee on savings deposits held by persons at banks and co-operative savings banks, administered by two separate deposit insurance funds. This paper will focus on the insurance fund for banks, since deposits held at co-operative savings banks are a small fraction of the total; in fact the two biggest co-operative banks are grouped with the commercial banks, and as such are subject to the same deposit insurance fund as the banks. Abolishing total guarantee put into practice in order to prevent panic due to banking crisis, the limited guarantee on savings deposits, which is in accordance with the European Union (EU) deposit insurance directive of 1994, has been gradually reached. Even though this limited guarantee has the effect of preventing some problems such as moral hazard it proved to be not enough to design an effective deposit insurance scheme. To the effect that designing effective deposit insurance scheme

scientifically depends mainly on its structure, membership, coverage, funding and public awareness. In this respect, the main aim of this paper is to dwell upon designing an effective deposit insurance scheme for TRNC with particular emphasis on public awareness. Public awareness has been examined by conducting a research towards depositors and bank staff. Briefly, the research findings show that both depositors and bank staffs are not aware of the essentials of deposit insurance system in TRNC. Furthermore, banking institutions do not have systematic program designed to create this public awareness considered as the indispensable element of effective deposit insurance scheme.

29

European Journal of Economics, Finance and Administrative Sciences (2010) The introduction of the Malaysian deposit insurance scheme is one of the many concerted efforts determined to strengthen the protection of depositors, which in turn promotes financial stability and development. The study investigates the effect of the introduction of deposit insurance plan on bank risks given that a proper risk management is vital to maximise shareholders return and to protect the interests of all stakeholders. Having analysed a small panel data of the Malaysian local commercial banks from 2004-2007, the study finds that explicit deposit insurance have mixed effects on bank risks. Generally, it is found that interest rate risk and risk-weighted capital ratio deteriorate after the introduction of the explicit deposit insurance scheme in Malaysia. Every federal or state credit union, state bank, federal or state savings and loan association, savings and trust company and federal or state savings bank and every national bank located in this state which compiles in all respects as to public deposits with this chapter and will accept payments made by the state under s . 16 .412 may be designated as a public depository and may receive and hold public deposits, subject to this chapter. The commissioner of banking shall have the same powers and duties with regard to making and continuing public deposits in national banks, federal and state credit unions, federal and state savings banks and federal and state savings and loan associations as the powers and duties exercised and performed by the commissioner of banking with regard to public deposits, in state banks .
Ms. Vinodhini. (2010) studied, A comparative study of fixed deposits schemes in private sector banks. In her study, she concluded that the depositors have expressed their desire to renew the deposits. Ms. Meenakshi, (2008) who studied The public deposits management in Sundaram industries concluded that the rate of interest offered to the public by the company is much higher than the rate of interest paid by the company to SBI for its working capital financing. Mr. Raja Srinivasan, (2007) examined The performance of public deposits concluded in his study that the terms and conditions laid down by the company are very scientific and in line with terms and conditions of public deposit schemes of other reputed companies.

30

Ms. Kalaivani, (2003) studied the public deposits schemes offered by TVS group companies concluded in her study that the company does not accept deposits from NRS and suggested that the company can mobilize deposits from NRS to strengthen their business operations and also the company can increase its net worth in future. Mark Mobius, (2008) in his study on fixed deposits by the company has suggested that The Companys fixed deposits are backed in limelight. The stock market is giving negative returns and the real return on bank fixed deposits after adjusting inflation has also turned negative. This has given company an opportunity to raise funds from investors. While offering them attractive returns through fixed deposits, tighter liquidity in the market and higher cost borrowing are the main reasons behind companies reaching out to investors to get deposits. Nikhil Walavalkar,(2011) studied Companies fixed deposits that the companies are keen to borrow from retail investors, given the liquidity Crunch in the market. A popular method is fixed deposits, similar to the products banks offer. Individuals who seeks regular income welcome company FDs Anil Chapra, (2011) examined the preference of fixed deposits has concluded that the investors, especially retires and those in the last years of employment, consider such fixed deposits.

31

REFERENCES
1) Robert C. Vogel and Paul Burkett (Jul., 1986), Deposit Mobilization in

DevelopingCountries: The Importance of Reciprocity in Lending, The Journal of Developing Areas Vol. 20, No. 4 (Jul., 1986), pp. 425-438. 2) Sandhu H.S & R.K. Goswami(1986), Determinants of commercial bank deposits in India-Indian Economic Journal, pg.73-79.

3) Dr. S. Raj Kumar (April 2005) Deposit Mobilization of Indian Overseas Bank in Thanjavur Main Branch- Indian journal of finance, pg 24-32.

4) Ghosh,

Saibal and Das,

Abhiman (2006): Depositor

discipline

in

Indian

banking Published in: Monetary Policy and Issues: New Research : pp. 139-163.

5) Anand Singh Kablana, Vikas Kumar, Shelindar Kumar (March 2011). Deposits Mobilization By Baroda District Central Co-operative Bank Ltd. (A Co-operative Bank of Gujarat), Indian journal of finance, pg 10-17.

6)

International Research Journal of Finance and Economics, ISSN 1450-2887 Issue 7

(2007) 7) European Journal of Economics, Finance and Administrative Sciences, ISSN 14502275 Issue 18 (2010)

32

1.5 Objectives 0f the Study

The following are major objectives of the study: 1. To study the existing procedures and management of public deposits in Sundaram Industries, Madurai.

2. To study the attitude and preference of the depositors towards public deposit schemes in Sundaram Industries, Madurai. 3. To study the factors which influence the depositors to make deposits in Sundaram industries, Madurai. 4. To analyze the reasons for conversion of deposit schemes opted by the depositors. 5. To offer major findings and suggestions based on the study.

1.6 Scope of the Study

The present study is based on the utilization and management of public deposits to assess the attitude and preference of depositors towards public deposit scheme of Sundaram industries. However, it does not cover the other areas such as companys preference to accept deposits for their financial needs rather than trying other sources of funds, comparative study of public deposits schemes offered by Sundaram industries and other companies.

33

1.7 RESEARCH METHODOLOGY

The present study is based on the primary data and secondary data. The primary data have been collected structured interview schedule. The data have been collected from 110 depositors of Sundaram Industries Corporation, MDU who are the residents of Madurai district. An interview schedule has been prepared after setting the objectives of the study.

The Secondary data has been collected from the statutory records, files and books of the company maintained at their corporate office.

1.7.1 Research Design

The research undertaken by the researcher is Descriptive Research. The description research is essentially a fact finding approach related to the present and abstracting generalizations by the cross sectional study of current situation.

1.7.1.1 Sampling Technique

The sampling design used by the researcher is the stratified random sampling method. From the total number of depositors, the researcher has taken to depositors for the study who are the residents of Madurai district which pertains to approximately 20% of the total depositors of the company.

1.7.1.2 Statistical tools used

The statistical tools for analysis:

Percentage analysis ANOVA Correlation T-TEST

34

Percentage Analysis The Percentage analysis is an effective tool to study the attributes of the respondents. Each response by the respondent to a particular statement is plotted into frequency table and quantified. The entire response to the statement is considered as 100 percent and each of the choice within the statement is measured as what percentage does it holds to the total response to that particular statement.

ANOVA Analysis of variance (ANOVA) is a collection of statistical models, and their associated procedures, in which the observed variance in a particular variable is partitioned into components attributable to different sources of variation. In this simplest type of ANOVA, all of the variability in the data can be divided into two types: within-groups variability and between-groups variability. Within-groups variability is the degree to which the scores of subjects in the same treatment group differ from one another. Between-groups variability is the degree to which the scores of different treatment groups differ from one another.

Correlation Correlation is a statistical technique that can show whether and how strongly pairs of variables are related. In this study the correlation between the prospects of SHG members and the problems of the SHG members are analysed and interpreted.

T-Test
"t" is the difference between two sample means measured in terms of the standard error of those means, or "t" is a comparison between two groups means which takes into account the differences in group variation and group size of the two groups. The statistical hypothesis for the "t" test is stated as the null hypothesis concerning differences.

35

1.7.1.3 Limitations of the Study: Access to the annual reports and some files and important data could not be obtained as the accounts are of confidential nature. Sample size is limited to 113 depositors who are the residents of Madurai District only, as majority of the depositors are residing out of Madurai.

36

2. DATA ANALYSIS AND INTREPRETATION

2.1.1 PERCENTAGE ANALYSIS Table 2.1.1.1 Marital Status
Frequency Valid Married UnMarried Widow Total 46 44 19 109 Percent 42.2 40.4 17.4 100.0 Valid Percent 42.2 40.4 17.4 100.0 Cumulative Percent 42.2 82.6 100.0

Figure 2.1.1.1

INTERPRETATION:
The above table shows that 42 percent of the respondents have married, 40 Percent of the respondents are unmarried and 17 percent of the respondents are widow.

INFERANCE:

Majority (42%) of the respondents are married.

37

Table 2.1.1.2 Monthly income

Frequency Valid Below 15000 15001-30000 30001-45000 Above 45001 Total 24 20 39 26 109 Percent 22.0 18.3 35.8 23.9 100.0 Valid Percent 22.0 18.3 35.8 23.9 100.0 Cumulative Percent 22.0 40.4 76.1 100.0

Figure 2.1.1.2

INTERPRETATION:
The above table shows that 2 2 Percent of the respondents are below 15000 as monthly income, 18 percent of the respondents are 15001 to 30000 as monthly income, 35 Percent of the respondents are 30001 to 45000 as monthly income and 23 Percent of the respondents are above 45001 as monthly income. INFERANCE:

Majority (35%) of the respondents are getting monthly income as 30001 to 45000.
38

Table 2.1.1.3 Monthly savings

Frequency Valid Below 5000 5001-10000 10001-15000 Above 15001 Total 20 15 44 30 109 Percent 18.3 13.8 40.4 27.5 100.0 Valid Percent 18.3 13.8 40.4 27.5 100.0 Cumulative Percent 18.3 32.1 72.5 100.0

Figure 2.1.1.3

INTERPRETATION:
The above table shows that 1 8 Percent of the respondents are below 5000 as monthly savings, 13 Percent of the respondents are 5001 to 10000 as monthly savings, 40 Percent of the respondents are 10001 to 15000 as monthly savings and 27 Percent of the respondents are above 15001 as monthly savings. INFERANCE:

Majority (40%) of the respondents are having habit of saving 10001 to 15000 per month.
39

Table 2.1.1.4 Online fund transfer

Frequency Valid Highly Satisfied Satisfied Moderate Dissatisfied Total 40 50 12 7 109 Percent 36.7 45.9 11.0 6.4 100.0 Valid Percent 36.7 45.9 11.0 6.4 100.0 Cumulative Percent 36.7 82.6 93.6 100.0

Figure 2.1.1.4

INTERPRETATION:
The above table shows that 36 Percent of the respondents are highly preferring for online interest payment and 45 percent of the respondents are satisfied for receiving the interest via online and 11 percent of the respondents are moderate and 6.4 perce nt of the respondent are dissatisfied. INFERANCE:

Majority (45%) of the respondents are highly satisfied for online interest payment.

40

Table 2.1.1.5 Regular payment of interest

Frequency Valid Strongly agree Agree No opinion Disagree Total 52 52 2 3 109 Percent 47.7 47.7 1.8 2.8 100.0 Valid Percent 47.7 47.7 1.8 2.8 100.0 Cumulative Percent 47.7 95.4 97.2 100.0

Figure 2.1.1.5

INTERPRETATION:
The above table shows that 47 percent of the respondents are strongly agree for factor regular payment of interest, 47 percent of the respondents are answered agree for the factor, 1 percent of the respondents are answered disagree for the factor and 2.8 percent of the respondents are answered agree for the factor INFERANCE:

Majority (47%) of the respondents are strongly agree for the factor regular
41

Table 2.1.1.6 Promt repayment of principal

Frequency Valid Strongly agree Agree No opinion Disagree Strongly Disagree Total 15 37 16 24 17 109 Percent 13.8 33.9 14.7 22.0 15.6 100.0 Valid Percent 13.8 33.9 14.7 22.0 15.6 100.0 Cumulative Percent 13.8 47.7 62.4 84.4 100.0

Figure 2.1.1.6

INTERPRETATION:
The above table shows that 1 3 percent of the respondents are strongly agree for factor prompt repayment of principle, 33 percent of the respondents are answered agree for the factor, 14 percent of the respondents are answered no opinion for the factor, 22 percent of the respondents are answered disagree for the factor and 15 percent of the respondents are answered agree for the factor prompt repayment of principle INFERANCE:

Majority (33%) of the respondents are agree for the factor Prompt repayment of Principle amount.
42

Table 2.1.1.7 Friendly service

Frequency Valid Strongly agree Agree No opinion Disagree Total 42 59 7 1 109 Percent 38.5 54.1 6.4 .9 100.0 Valid Percent 38.5 54.1 6.4 .9 100.0 Cumulative Percent 38.5 92.7 99.1 100.0

Figure 2.1.1.7

INTERPRETATION:
The above table shows that 38 percent of the respondents are strongly agree for factor friendly service, 54 percent of the respondents are answered agree for the factor, 6 percent of the respondents are answered no opinion for the factor and .9 percent of the respondents are answered disagree for the factor INFERANCE:

Majority (54%) of the respondents are agree for the factor friendly service.
43

Table 2.1.1.8 Easy procedure

Frequency Valid Strongly agree Agree No opinion Disagree Total 35 60 10 4 109 Percent 32.1 55.0 9.2 3.7 100.0 Valid Percent 32.1 55.0 9.2 3.7 100.0 Cumulative Percent 32.1 87.2 96.3 100.0

Figure 2.1.1.8

INTERPRETATION:
The above table shows that 32 percent of the respondents are strongly agree for factor Easy procedure, 55 percent of the respondents are answered agree for the factor, 9 percent of the respondents are answered no opinion for the factor and 3 percent of the respondents are answered disagree for the factor INFERANCE:

Majority (55%) of the respondents are agree for the factor Easy Procedure.

44

Table 2.1.1.9 Safety of principal

Frequency Valid Strongly agree Agree No opinion Disagree Strongly Disagree Total 8 34 16 26 25 109 Percent 7.3 31.2 14.7 23.9 22.9 100.0 Valid Percent 7.3 31.2 14.7 23.9 22.9 100.0 Cumulative Percent 7.3 38.5 53.2 77.1 100.0

Figure 2.1.1.9

INTERPRETATION:
The above table shows that 7 percent of the respondents are strongly agree for factor Safety of Principle, 31 percent of the respondents are agree for factor, 14 percent of the respondents are no opinion for factor, 23 percent of the respondents are d i s agree for factor INFERANCE: d i s agree for factor, 22 percent of the respondents are strongly

Majority (31%) of the respondents are strongly agree for the factor Safety of principle
45

Table 2.1.1.10 Reputation of the company

Frequency Valid Strongly agree Agree No opinion Disagree Strongly Disagree Total 4 15 50 25 15 109 Percent 3.7 13.8 45.9 22.9 13.8 100.0 Valid Percent 3.7 13.8 45.9 22.9 13.8 100.0 Cumulative Percent 3.7 17.4 63.3 86.2 100.0

Figure 2.1.1.10

INTERPRETATION:
The above table shows that 3 percent of the respondents are strongly agree for factor Safety of Principle, 13 percent of the respondents are agree for factor, 45 percent of the respondents are no opinion for factor, 22 percent of the respondents are d i s agree for factor INFERANCE: d i s agree for factor, 13 percent of the respondents are strongly

Majority (45%) of the respondents are no opinion for the factor Safety of principle.
46

2.1.2 ANOVA
Table 2.1.2.1 Reputation and promt
95% Confidence Interval for Std. N Reputation M UM W Total Promt M UM W Total 46 44 19 109 46 44 19 109 Mean 3.1739 3.2045 3.7895 3.2936 2.5000 3.2500 3.1579 2.9174 Deviation .97307 .95429 1.03166 .99352 1.16905 1.33164 1.42451 1.32027 Mean Std. Error Lower Bound Upper Bound Minimum Maximum .14347 .14387 .23668 .09516 .17237 .20075 .32681 .12646 2.8849 2.9144 3.2922 3.1049 2.1528 2.8451 2.4713 2.6668 3.4629 3.4947 4.2867 3.4822 2.8472 3.6549 3.8445 3.1681 1.00 1.00 2.00 1.00 1.00 1.00 1.00 1.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00

Sum of Squares Reputation Between Groups Within Groups Total Promt Between Groups Within Groups Total 5.680 100.926 106.606 13.981 174.276 188.257

df 2 106 108 2 106 108

Mean Square 2.840 .952

F 2.983

Sig. .055

6.990 1.644

4.252

.017

Hypothesis H0: There is no significant difference between the Marital status and the Reputation and
Promote payment

H1: There is significant difference between the Marital status and the Reputation and Promote
payment

Inference
There is no significant difference between the marital status and reputation There is a significant difference between marital status and promote payment
47

Table 2.1.2.2 Safety and fixed deposit

95% Confidence Interval for Std. N Safety 25-35 36-45 46-55 56-65 Total Fixed doposit 25-35 36-45 46-55 56-65 Total 17 37 38 17 109 17 37 38 17 109 Mean 2.4118 3.2432 3.5000 3.4706 3.2385 3.3529 3.3784 3.0526 2.3529 3.1009 Deviation .93934 1.44155 1.26811 1.17886 1.31162 1.57881 1.25502 1.29338 1.27187 1.35363 Mean Std. Error Lower Bound Upper Bound Minimum Maximum .22782 .23699 .20571 .28592 .12563 .38292 .20632 .20981 .30847 .12965 1.9288 2.7626 3.0832 2.8645 2.9895 2.5412 2.9599 2.6275 1.6990 2.8439 2.8947 3.7239 3.9168 4.0767 3.4876 4.1647 3.7968 3.4778 3.0069 3.3579 1.00 1.00 1.00 2.00 1.00 1.00 1.00 1.00 1.00 1.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00

Sum of Squares Safety Between Groups Within Groups Total Fixed deposit Between Groups Within Groups Total 15.134 170.664 185.798 13.528 184.362 197.890

Df 3 105 108 3 105 108

Mean Square 5.045 1.625

F 3.104

Sig. .030

4.509 1.756

2.568

.058

Hypothesis H0: There is no significant difference between the age and safety and fixed deposit H1: There is significant difference between the age and safety and fixed deposit Inference
There is no significant difference between the age and fixed deposit There is a significant difference between age and safety
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2.1.3 INDEPENDENT T-TEST

Table 2.1.3.1 regular payment, promtpay and friendly service
Gender RegularP Male Female PromtPay Male Female FriendlyS Male Female N 56 53 56 53 56 53 Mean 1.0714 2.1509 1.0714 2.1321 1.2500 2.1698 Std. Deviation .25987 .49599 .25987 .34181 .43693 .42679 Std. Error Mean .03473 .06813 .03473 .04695 .05839 .05862

Independent Samples Test Levene's Test for Equality of Variances t-test for Equality of Means

F RegularP Equal variances assumed Equal variances not assumed PromtPay Equal variances assumed Equal variances not assumed FriendlyS Equal variances assumed Equal variances not assumed 2.844 4.518 4.993

Sig. .028

t -14.342 -14.117

df 107 77.579 107 97.007 107 106.890

.036

-18.298 -18.162

.095

-11.110 -11.117

Hypothesis H0: There is no significant difference between the gender and regular payment, promote
payment and friendly service

H1: There is significant difference between the gender and regular payment, promote payment
and friendly service

Inference
There is no significant difference between the gender and friendly service There is a significant difference between gender and regular payment and promote payment

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Table 2.1.3.2 share bond and mutual fund

Gender Sharebond Male Female Mutualfund Male Female N 56 53 56 53 Mean 1.0714 2.1321 1.0357 2.0755 Std. Deviation .25987 .34181 .18726 .26668 Std. Error Mean .03473 .04695 .02502 .03663

Independent Samples Test Levene's Test for Equality of Variances t-test for Equality of Means

F Sharebond Equal variances assumed Equal variances not assumed Mutualfund Equal variances assumed Equal variances not assumed 3.362 4.518

Sig. .036

t -18.298 -18.162

Df 107 97.007 107 92.757

.070

-23.660 -23.438

Hypothesis H0: There is no significant difference between the gender and share bond and mutual fund H1: There is significant difference between the gender and share bond and mutual fund Inference
There is no significant difference between the age and mutual fund There is a significant difference between age and share bond

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2.1.4 CORRELATION

Table 2.1.4.1 gold and insurance

Mean Gold Insurance 1.7064 1.8624 Std. Deviation .67086 .79893 N 109 109

Correlations Gold Gold Pearson Correlation Sig. (2-tailed) N Insurance Pearson Correlation Sig. (2-tailed) N **. Correlation is significant at the 0.01 level (2-tailed). 109 .874
**

Insurance .874
**

.000 109 1

.000 109 109

INTERPRETATION:
The two factors are tested for correlation. Pearsons correlation test was performed. The all the above factors are both positively and negatively correlated with each others. The gold and insurance are positively correlated.

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Table 2.1.4.2 NSc and fixed deposit

Mean NSC Fixeddeposit 1.3303 1.5872 Std. Deviation .62443 .61178 N 109 109

Correlations NSC NSC Pearson Correlation Sig. (2-tailed) N Fixeddeposit Pearson Correlation Sig. (2-tailed) N *. Correlation is significant at the 0.05 level (2-tailed). 109 .191
*

Fixeddeposit .191
*

.047 109 1

.047 109 109

INTERPRETATION:
The two factors are tested for correlation. Pearsons correlation test was performed. The all the above factors are both positively and negatively correlated with each others. The NSC and fixed deposit are positively correlated.

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2.2 FINDINGS OF THE STUDY The following are findings of the study.

It is observed that 42% of the respondents are married citizens.

Majority (35%) of the respondents are getting monthly income as 30001 to 45000.

Majority (40%) of the respondents are having habit of saving 10001 to 15000 per month.

Majority (45%) of the respondents are highly satisfied for online interest payment.

Majority (47%) of the respondents are strongly agree for the factor regular payment of interest.

Majority (33%) of the respondents are strongly agree for the factor Prompt repayment of Principle amount.

Majority (55%) of the respondents are strongly agree for the factor friendly service.

Majority (91%) of the respondents are strongly agree for the factor Easy Procedure.

Majority (100%) of the respondents are strongly agree for the factor Safety of principle.

Majority (89%) of the respondents are strongly agree for the factor Reputation of the company.

Majority (57%) of the respondents are preferred to invest 31 to 45 percent of money in shares and bonds.

Majority (43%) of the respondents are preferred to invest 16 to 30 percent of money in mutual funds. Majority (53%) of the respondents are preferred to invest 31 to 45 percent of money in fixed deposits.
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Majority (68%) of the respondents are preferred to invest less than 15 percent of money in NSC & Postal Savings.

Majority (41%) of the respondents are preferred to invest 16 to 30 percent of money in insurance. Majority (59%) of the respondents are preferred to invest Above 46 percent of money in Gold.

Majority (43%) of the respondents are preferred to invest 31 to 45 percent of money in Real Estate.

The study indicates that 85 % of the respondents come to know about the public deposits scheme offered by SIL through advertisement which the company publishes in leading English daily and a vernacular daily. Majority (46%) of the respondents are deposited in Cumulative deposit scheme. Majority of the respondents prefer the Safety as a factor to deposit in a company. Majority (45%) of the respondents are deposited in three years deposit scheme. Majority (58%) of the respondents are preferred quarterly frequency of interest. Majority (84%) of the respondents are having one deposit. Majority (84%) of the respondents are preferred for renewal. Majority (76%) of the respondents are interest to deposit again. Majority (63%) of the respondents are not aware of companies act. Majority (86%) of the respondents are not opted for conversion of deposit. Majority of the respondents are ranked for higher amount on maturity.
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Majority (100%) of the respondents are recommending for deposit scheme. In discussion with the president and secretary of the company, it is so prudent that the company has accepted such deposits for the socio-welfare cause and actually it caters the needs of the middle income groups and senior citizens to hold the investment at a higher secured place.

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3 Suggestions and conclusion

3.1 Suggestions The researcher has analyzed the depositors attitude and preference towards public deposits scheme offered by SIL. The analysis has been carried out by applying certain statistical tools such as fixed base indices, chi-square test and simple ranking table. The findings of the study have enabled the researcher to offer the following suggestions. The company can increase interest rates to attract more number of people.

The company can introduce several deposit schemes to attract the generations in investing in company.

younger

To attract more number of people to deposit, the company can extend the advertisement in various media.

They can give prizes or gifts packages for those who hold more number of deposit in the company.

Company can create awareness about the deposit schemes to all the employees those who working in the all divisions of the company.

To increase deposit and to protect Employees Company can hold at least one deposit for the employee.

The terms and conditions laid down by the company for public deposit scheme are very scientific and in line with the terms and conditions of public deposit schemes of highly reputed companies. This is yet another reason why the company is able to manage public deposits very efficiently. The company may continue with the same and remain a model for other companies to emulate.

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With the advent of economic recession, Indian banks are facing heavy cash crunch these days.

The rate of inflation also proceeds at a faster pace. In order to keep the balance in the economy, RBI takes quantitative measures by raising the bank rates from time to time with the latest revision of increase in basis points of 25 basis point in the bank rates, the bank interest rates for deposits has grown up to 9.75% PA and rates of senior citizens deposits has almost reached 10.25% PA. In order to keep pace they extend higher interest rates on deposits than public sector banks.

It is also worthwhile to mention that the most of the depositors in banks are now pre-closing their existing deposits and making up new deposits to take up the competitive advantage of revised higher interest offered by the banks. In this juncture, it is necessary for the company to revise the rates for the depositors. This share enable the company to retain the existing depositors and to attract the fresh depositors.

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3.2 CONCLUSION

The success of a scheme provided by a business enterprise largely depends on the how best it serves and satisfies the depositors the attitude of the depositors keep changing. What was bought yesterday is discarded today since the expectation of the depositors change from time to time, public deposit scheme at SIL reaches the large portion of the middle income group and it is the pioneer in the market, tailor made services cannot satisfy all the depositors at all times. The company needs to understand the requirements of the depositors and to serve them only best at all times which is its regular practise.

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