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CHAPTER 1
INDUSTRY INTRODUCTION
What is banking?
The Banking Regulation Act 1949 defines banking as Accepting, for the purpose of lending or
investment, of deposits of money from the public repayable on demand or otherwise and
withdrawal by cheque draft, order or otherwise. In addition, banks also offer financial services,
which include:
Credit cards
Custodian services.
The business of banking is highly regulated since banks deal with money offered totem by the
public and ensuring the safety of this public money is one of the prime responsibilities of any bank.
Every bank has a compliance department, which is responsible to ensure that all the services
offered by the bank, and the processes followed are in compliance with the local regulations and
the Banks corporate police The major regulations and act governing the banking business are:
Bank lends money either for productive purposes to individual, firms, Corporate etc. of for buying
house property, cars and other consumer durables and r investment purposes to individuals and
the others. However, banks do mot finance any speculative activity. Lending is risk taking The
Depositor of banks is also assured of safety of their money by deploying some percentage of
deposit in statutory reserves like Statutory Liquidity & Ratio credit Rating Ratio.
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BANKING INDUSTRY
Banking System
Banking system is an integral sub-system of the financial system. It represent an important
channel of collecting small saving from the households and ending it to the corporate sector.
The Indian Banking system has the Reserve Bank of India (RBI) as the apex body for all matters
relating to the banking system. It is the of Banks of In demand bankers to all others banks as
well.
Classification of Banks.
1. Non-Schedule Banks
These are banks, which are not included in the second schedule of the Banking Regulations Act,
1965. It means they do not satisfy the conditions laid down by that schedule.
They are further classified as back:
Commercial Banks
2. Schedule Banks
Must have paid-up capital and reserve of mot less than Rs. 50, 00,000.The must satisfy the RBI
than its affairs are mot conducted in a manner detrimental to the interests of its depositors. These
are further classified as follow:
Commercial Bank
Private sector
Public sector
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CHAPTER 2
BANKING INTRODUCTION
Meaning of Bank
It is generally said that the word BANK has been originated in Italy. In the middle of 12th
century there was a great financial crisis in Italy due to war. To meet the war expenses, the
government of that period imposed a forced subscribed loan on citizens of the country at the
interest of 5% per annum. Such loans were known as Compare, Minute etc. The most common
name was Monte. In Germany the word Monte was named as Bank or Bank. According to some
writers, the word Bank has been derived from the word Bank.
It is also said that the word Bank has been derived from the word Bunco which means a bench.
The Jews money lenders in Italy used to transact their business sitting on benches at different
market places. it is rightly argued that the word Bank has been originated from the World Bank.
Today the word bank is used as a comprehensive term for a number institutions carrying on
certain kinds of financial business. In practice, the work Bank means which borrows money from
one class of people and again lends money to another class of people for interest or profit.
Definition of Bank
Bank is defined in many ways by various authors in the books on economics and commerce. It is
very difficult to define a bank, because a bank performs multifarious functions. Different kinds
of bank having different functions may be defined in different ways according to their functions.
The evolution of different type of banks, each specialization in a particular field, gives emphasis
on each and every kind of bank. A general and comprehensive definition to cover all types of
banking institutions would be unscientific and probably impossible. Each type of bank should
have its own definition explaining its specialized functions. Legislators have understood this
difficulty and that is why the Bill of Exchange Act 1882 (England) defines thus A bank includes
a body of persons, whether incorporated or not, who carry on the business of banking.
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Importance of Banking
Bank plays a significant role in the economic development. The overall economic of a country is
absolutely dependent on the efficient banking system. Industrial, agricultural and commercial
progress of a country is not possible without a good banking system. The importance of banking
may be stated as follows:
1. Capital Formation
Economic development depends upon the division of economic resources from consumption to
capital formation. Capital grows out of savings. Thus banks render a valuable service towards the
development of a country by encouraging the growth of capital.
3. Reservoirs of Funds
Banks acts as the reservoirs of money in the country. In times of economic, crisis the bankers
come forward to help the Government by purchasing the Government securities or by advancing
loans.
4. Transfer of Funds
Banks facilitate the transfer of funds from one place to another safely and at a very cheap cost
through bank drafts, mail transfers, telegraphic transfer, travelers cherub etc.
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7. Service to Customer
Banks performs various agency services on behalf of their customers. They collect or make
payments of bills of exchange, dividend, insurance premium etc, on behalf of their customers.
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2. Good Reputation
Reputation is the most important factor in the progress of a bank. To be successful, a bank must
have ample reputation in the money market. Reputation of a bank depends upon the
qualifications of the directors and on the efficiency of management and workers.
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5. Economy
Economy in expenditure should be maintained for the proper operation of banking business. A
good banker will always try to maximize his profit at a minimum cost.
6. Effective Publicity
A bank should adopt various scientific methods of advertisement for the proper publicity of
business.
7. Localization
Good locality of a bank is another quality. The bank should be located in the business centre so
that it can flourish its business successfully.
8. Specialty
To be successful, a bank should be specialized in any one or more fields of banking. An
agricultural bank always aims at financing the formers for agricultural purposes. Industrial bank
provides long terms credits to the industries. The individual commercial banks are also
specialized in different fields of banking.
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Classification of Banks
The banks can be classified on the following three bases:
1. Structural Classification of banking.
2. Operational Classification of banks.
3. Functional Classification of banks.
1. Structural Classification
Banks can be classified on the basis of their structure or constitution. According to structural
classification, banking may be classified as (a) Branch Banking (b) Unit Banking.
a) Branch banking
Under branch banking system, banking business is carried on through a network of branches in
the same town or country under the guidance and control of one single head office. These
branches may also be located in outside of the country. This system of banking was originated in
the United Kingdom. Now-a-days this system if followed by many countries of the world
including Pakistan.
b) Unit banking
Under unit banking system the banking operations is carried through a single office without any
branch. Remittances and foreign exchange etc are dealt through correspondence between banks
of two places. The U.S.A is the home of unit banking.
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B) Specialized Banks
The bank which performs one or more special functions is known as specialized bank. As for
example an agricultural bank takes up the special responsibility of financing agricultural
activities. Industrial banks specially finance the industrial undertakings. Japan is the home of
specialized banks where different types of specialized banks are working with their special
functions. The specialized banks have a great role in the economic development of a country,
especially of a developing country like Pakistan. In our country, Agricultural Development Bank
of Pakistan is helping financially in the development of agricultural sector of our economy. The
Industrial Development Bank of Pakistan is another specialized bank who is financing large
scale industries in Pakistan.
b) Commercial Bank
Such type of bank is cheerfully engaged in financing internal trade. It deals in short term credit.
It takes deposit from public through different type of deposit accounts and invests that collected
fund in advances and loan of short period to the trading and commercial undertaking. This type
of bank is familiar in most of the world. In our country, for example, National Bank of Pakistan,
Habit Bank Limited, United Bank Limited, Muslim Commercial Bank Limited and Allied Bank
Limited are the commercial banks.
c) Industrial Bank
Such institution specializes in financing industry. It provides long term credit to people who
carry on industrial enterprises. Industrial Development Bank of Pakistan (IDBP) and Pakistan
Industrial Credit and Investment Corporation (PICIC) are the examples of industrial banks.
d) Agricultural Bank
Such bank provides long and short term finance to agriculturists for their agricultural purposes.
Long term capital is required for acquisition and improvement of land and purchase of heavy
machinery and equipments. Short period capital is required by the farmers for current
expenditure on seed, manures, wages etc. Agricultural Development Bank of Pakistan (ADBP) is
the best example of agricultural bank in our country that provides long term, medium term and
short term loans to the agriculturists.
e) Exchange Bank
Exchange bank deals mainly in the finance of the foreign trade of the country. It deals in foreign
exchange. On other wards, the main function of such bank is to buy and sell foreign currencies,
rather titles to foreign currencies in the form of bills of exchange, drafts, telegraphic transfers etc.
It purchases the bill of exchange which arises in connection with the import and export trade of
the country and they deal in exchange.
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g) Mortgage Bank
Mortgage bank advances long term credits against securities of immovable properties like,
agricultural lands, buildings and machineries etc. Generally, credit is give to the agriculturist,
small industries or house builders. This type of bank is essential in an under developed country
where capital supply is very limited. In our country, House Building Finance Corporation is
functioning as mortgage bank providing long term loans to house builders against securities of
building and land property.
h) Savings Bank
Such banks provide facilities to people to save money. This type of bank is established with the
objective of promoting the thrift or saving habits among the people of small incomes. It takes
deposits from the public and lands the collected funds to traders Depositors are allowed to
withdraw money from their deposits twice in a week. Post offices in Pakistan carry on functions
of saving bank.
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Chapter 3
Union bank of India
Introduction
Union Bank of India (UNION BANK OF INDIA) is one of India's largest state-owned banks
(the government owns 55.43% of its share capital), is listed on the Forbes 2000. It has assets of
USD 13.45 billion and all the bank's branches have been networked with its 1135 ATMs. Its
online Telebanking facility is available to all its Core Banking Customers - individual as well as
corporate. It has representative offices in Abu Dhabi, United Arab Emirates, and Shanghai,
Peoples Republic of China, and a branch in Hong Kong The Union Bank of India was built up in
twentieth century and declared open by the Father of the Nation, Mahatma Gandhi. The bank
with its efficient value-added services, sustained growth, consistent profitability and
development of new technologies bank has ensured complete customer delight, living up to its
image of, GOOD PEOPLE TO BANK WITH. Bank is offering credit cards, home loan, union
demit, Kisan ATM, International debit card, online tax payment facility, Railway e-ticketing
kiosk, etc., services to its customers through core banking solution. The Union Bank of India has
2261 branches out which 1031 branches are under CBS. All the ATMs are inter-connected
through the Banks ATM Switch, thus facilitating on-line operations in case of CBS customers.
The Bank is a member of Cash Tree consortium and also has bilateral arrangement with State
Bank of India, enabling the Banks ATM cardholder access to over 20000 ATMs across the
country. UNION BANK OF INDIA Net connects 65 Offices and 984 branches located in 323
centers, facilitating speedier transmission of MIS data (Network Map). The network also
facilitates the implementation of Core Banking Solution, apart from DEMAT services, Cash
Management services, fund transfers, messaging system, etc. The Bank is using VSAT
network for connecting branches and ATMs wherever leased line connectivity is not feasible.
We have 590 VSATs operational, connecting 194 branches/extension counters and 316 ATMs
Page | 12
HISTORY
Union Bank of India (UBI) was registered on 11 November 1919 as a limited company
in Mumbai and was inaugurated by Mahatma Gandhi. At the time of India's Independence in
1947, UNION BANK OF INDIA still only had four branches - three in Mumbai and one
in Saurashtra , all concentrated in key trade centers. After Independence UNION BANK OF
INDIA accelerated its growth and by the time the government nationalized it in 1969, it had
grown to 240 branches in 28 states. Shortly after nationalization, UNION BANK OF INDIA
merged in Belgaum Bank, a private sector bank established in 1930 that had it merged in a bank
in 1964, the Sheri Judea Shankar ling Bank. Then in 1985 UNION BANK OF INDIA merged
in Mira State Bank, which had been established in 1929. In 1999 the Reserve Bank of
India requested that UNION BANK OF INDIA acquire Sikkim Bank in a rescue after extensive
irregularities had been discovered at the non-scheduled bank. Sikkim Bank had eight branches
located in the North-east, which was attractive to UNION BANK OF INDIA.
UNION BANK OF INDIA began its international expansion in 2007 with the opening of
representative offices in Abu Dhabi, United Arab Emirates, and Shanghai, Peoples Republic of
China. The next year, UNION BANK OF INDIA established a branch in Hong Kong, its first
branch outside India. In 2009, UNION BANK OF INDIA opened a representative office in
Sydney, Australia.
Page | 13
Technologically Strong
Financially Sound
Personalized Services
Value Maximization
Employee Satisfaction
Skill Maximization
MISSION
To Be Premiere Bank,
Responsive To The Needs Of Our Target Market Customers,
Recognized For Consistently Superior Service Quality Innovative Products,
Thereby Delivering Superior Value To Our Shareholders
Page | 14
Page | 15
BANKING
Accounts & Deposits cumulative deposit scheme, deposit reinvestment certificate, monthly
income scheme, union flexi-deposit, senior citizens scheme, multi gain savings account, no
frills saving account, union super salary account, union classic current account
Retail Loans union cash, union home, union health, union miles, union education, and
union top up, EMI calculator, union smile.
Payment
NRI Banking
Savings & Deposits - NRO Non Resident Ordinary A/c Scheme, NRE Non Resident
External
Loan &Services house loans, foreign currency loans, loans against deposit, immovable
property, and shares or debenture
Page | 16
Corporate Banking
E-Tax -Customs and Direct taxes, DGFT, Central Excise and Service Tax
Trade Finance trade finance for exporters, trade finance for importers, foreign currency
loans, correspondent banking
Syndication of Loans
MSME Banking
Internet Banking
Account Information
Transfer of Funds
Bills
Requests
Mails
Trade
Limits
Currency
U pleads
Customization
Financial enquiries
Page | 17
COMPANY PROFILE
Union Bank of India (UBI) is one of India's largest state-owned banks (the government owns 55.43% of
its share capital), is listed on the Forbes 2000. It has assets of USD 13.45 billion and all the bank's
branches have been networked with its 1135 ATMs. Its online Telebanking facility is available
to all it score Banking Customers - individual as well as corporate. It has representative offices in
Abu Dhabi, United Arab Emirates, and Shanghai, Peoples Republic of China, and a branch in
Hong Kong
The Union Bank of India was built up in twentieth century and declared open by the Father of the Nation,
Mahatma Gandhi. The bank with its efficient value-added services, sustained growth, consistent
profitability and development of new technologies bank has ensured complete customer delight,
living up to its image of, GOOD PEOPLETO BA NK WITH. Bank is offering credit adds, home
loan, union demit, Kinas ATM, International debit card, online tax payment facility, airway eticketing kiosk, etc., services to its customers through core banking solution.
He Union Bank of India has 2261 branches out which1031 branches are under CBS. All the ATMs are
inter-connected through the Banks ATM Switch, thus facilitating on-line operations in case
of CBS customers. The Bank is a member of Cash Tree consortium and alohas bilateral arrangement
with State Bank of India, enabling the Banks ATM cardholder access to over 20000 ATMs across the
country. UNION BANK OF INDIA Net connects 65 Offices and 984 branches located in
323centers, facilitating speedier transmission of MIS data (Network Map).The network also
facilitates the implementation of Core Banking Solution, apart from DEMAT services, Cash
Management services, fund transfers, messaging system, etc. The Bank is using VSAT network for
connecting branches and ATMs wherever leased line connectivity is not feasible. We have 590
VSATs operational, connecting 194 branches/extension counters and 316 ATMs.
Page | 18
Business Operations
Union Bank has huge and varied customer base approximating to 24 millions. Bank is targeting
customers from all demographic and economic profiles and introducing products and services to
meet their needs. The Bank operates in all the areas including retail lending, personal banking,
corporate banking, international banking and investments & treasury. Banks lending also caters
to the rural and semi urban centers, financing Agriculture and allied activities, rural artisans,
micro & medium enterprises in these areas. Bank has opened 198 Village Knowledge Centers
to provide information to the local community on better agriculture practices, commodities,
marketing facilities and financial education. Bank also offers third party products like life and
general insurance, mutual funds, on-line trading, wealth management services through tie- up
with other FIs. Bank places customer at the centre of all its operations and has transformed the
process, people and organizational structure. Bank has initiated a large scale transformation
process named Nav Nirman to address two critical aspects of growth-instilling the drive of
sales & marketing across bank staff and reconfiguration of banks business model. The
transformation process focuses on four key initiatives
a) Retail Asset (marketing & processing)
b) SME marketing & processing)
c) Branch sales and services (improving the customer experience in the branch)
d) Centralization of key processes
Page | 19
Diversification
Union Bank in partnership with Bank of India and Dai-Ichi of Japan has formed a subsidiary for
distribution of Life insurance products, which has started selling the products. Bank has signed
an agreement with Belgian KBC group for setting up a joint venture AMC in India. Union Bank
has signed Mau with NSIC for training and setting up Incubation cum Training centers to
promote first generation entrepreneurs in MSME segment. Bank has entered into Mou with
NCMSL for financing against warehouse receipts for agri. commodities kept at NCMSL
warehouses. Bank has announced opening 100 specialized Business Banking branches across the
country to focus exclusively on MSME sector with turnaround time of 2 weeks for sanction of
proposals. Bank has launched mobile banking facility U mobile which facilitates limited
transactions and other services through mobile phones.
Page | 20
Bank promises that YOUR DREAMS ARE NOT YOUR ALONE ,there is a bank that is ready
to fulfill the dreams of every one and thus ensuring that we remain GOOD PEOPLE TO BANK
WITH for all times to come.
Page | 21
Mar'12
Mar'11
Mar'10
Mar'09
Mar'08
12
12
12
12
12
Months
Months
Months
Months
Months
Share Capital
661.55
635.33
505.12
505.12
505.12
12,437.68
10,555.35
8,302.69
6,549.26
5,118.19
Net Worth
14,633.06
12,764.52
10,423.78
8,740.35
7,347.70
Secured Loans
17,909.49
13,315.97
9,215.31
3,884.90
4,760.49
Unsecured Loans
TOTAL LIABILITIES
Liabilities
Assets
Gross Block
3,720.39
3,598.41
3,396.98
3,220.65
2,937.45
1,388.20
1,319.21
1,101.50
893.35
741.62
Net Block
798.36
705.36
679.51
641.32
471.44
3.61
13.58
9.96
7.86
4.57
Investments.
62,363.56
58,399.14
54,403.53
42,996.96
33,822.63
Inventories
0.00
0.00
0.00
0.00
0.00
Sundry Debtors
0.00
0.00
0.00
0.00
0.00
15,675.14
20,098.44
15,776.69
15,984.93
10,097.84
77,952.40
Current Liabilities
6,799.95
7,442.67
5,483.01
9,647.43
8,106.43
Provisions
0.00
0.00
0.00
0.00
0.00
6,799.95
7,442.67
5,483.01
9,647.43
8,106.43
Misc. Expenses
0.00
TOTAL
(A+B+C+D+E)
ASSETS
0.00
0.00
0.00
0.00
Mar'11
Mar'10
Mar'09
Mar'08
22,383.89
17,684.30
14,667.24
12,901.70
10,123.58
Excise Duty
0.00
0.00
0.00
0.00
0.00
NET SALES
22,383.89
17,684.30
14,667.24
12,901.70
10,123.58
Other Income
0.00
0.00
0.00
0.00
0.00
TOTAL INCOME
23,422.28
18,465.11
15,395.40
13,401.69
10,504.56
Manufacturing Expenses
0.00
0.00
0.00
0.00
0.00
Material Consumed
0.00
0.00
0.00
0.00
0.00
Personal Expenses
2,479.83
2,600.25
1,354.99
1,152.36
845.68
Selling Expenses
67.40
94.08
38.98
132.63
34.49
Administrative Expenses
2,804.57
2,287.70
1,652.65
1,339.02
1,196.21
Expenses Capitalized
0.00
0.00
0.00
0.00
0.00
Provisions Made
975.24
135.25
244.81
217.97
90.94
TOTAL EXPENDITURE
6,327.03
5,117.28
3,291.43
2,841.98
2,167.32
Operating Profit
2,796.71
2,465.86
2,510.35
2,201.88
1,686.24
EBITDA
3,835.10
3,246.66
3,238.51
10,777.68
8,428.18
Depreciation
146.45
155.66
160.14
136.58
101.82
Other Write-offs
0.00
0.00
0.00
0.00
0.00
EBIT
3,688.65
3,091.00
3,078.37
10,641.10
8,326.36
Interest
14,235.39
10,236.42
9,110.27
8,075.81
6,360.95
EBT
2,713.42
2,955.76
2,833.56
2,347.31
1,874.47
Taxes
925.62
873.45
758.00
630.00
487.15
1,787.80
2,082.31
2,075.56
1,717.31
1,387.32
-0.6
-0.3
-0.6
9.24
-0.2
EXPENDITURE:
Page | 23
0.78
0.00
0.00
0.00
0.00
Other Adjustments
-0.7
0.00
0.00
0.00
0.00
REPORTED PAT
1,787.14
2,081.95
2,074.92
1,726.55
1,387.03
Preference Dividend
10.54
5.16
0.00
0.00
0.00
Equity Dividend
440.44
419.47
277.81
252.56
202.05
80.00
79.99
55.00
49.99
40.00
5,505.49
5,243.32
5,051.18
5,051.18
5,051.18
32.46
39.71
41.08
34.18
27.46
KEY ITEMS
Total Business size of Rs. 2, 91,289 crore as on March31, 2010 an increase of 22.9% over
previous year.
Total Deposits of Rs. 1, 70,040 crore, an increase of 22.6%.CASA deposits grew at 29.4%, its
share increased by 166 basis points to 31.73%.
Total Advances of Rs. 1, 21,249 crore, an increase of 23.4%. Retail advances grew at 33.8%
Net Profits of Rs. 2,075 crore, an increase of 20.2% over the previous year.
Core Fee Income of Rs. 896 crore, an increase of 32.74% over the previous year.
Capital Adequacy Ratio (Basel IICAR) stood at12.51%as on March31, 2010 as against
regulatory minimum of 9.0%.Tier I ratio at 7.91%.
Book Value per share of Rs. 173.38, an increase of 25.6% over the previous year.
Earnings per share increased to Rs. 41.08, compared to Rs. 34.18 of previous year.
Cost to Income ratio of 40.66%, reduced by 115 basis points over the previous year.
Pan India reach- Network of 2,805 branchesand2327 ATMs as on March 31, 2010.
1.
As on March31, 2010, Total Business of the bank stood at Rs. 2.91 lakh crore as against Rs. 2.37
lakh crore as on March31, 2009, an increase of 22.9%.The business growth was broad-based
with contribution from retail and corporate customers, both on assets and liabilities side.
2.
The Bank posted a total income and net profit of Rs. 15,277 crore and Rs. 2,075crore
respectively for the financial year ended March31, 2010 as against Rs.13372 crore and Rs. 1727
crore respectively in the previous year. The Earning per share (EPS) ratio showed improvement
to Rs. 1.08 as against Rs. 34.18 in the previous year, while cost to income ratio declined to 40.66% as
against 41.81% in the previous year.
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Total Capital Adequacy ratio (CAR), calculated in line with Basel II framework, and
stood at12.51%, well above the regulatory bench mark of 9%. Bank s Tier-ICAR was
7.91%
Page | 29
The operating expenses stood at Rs. 2508 crore compared to Rs. 2214 crore, relatively a
lower growth of 13.28% compared to 38.98% growth in previous year.
The operating profit of the Bank registered a growth of 18.72% to Rs. 3659 crore from
Rs.3082 crore in the previous year.
Profit after tax net profit increased to Rs. 2075 crore compared to Rs. 1727 crore achieved
ruing last year. Buoyancy in the core business operations supported by healthy growth
in Non-Interest Income helped Bank achieves a 20.15% growth in net profit. Bank s
operating profit and net profit
Page | 30
CAGR during the financial year 2006- 07 to2009-10 is at 22.3% and 34.9% respectively
Net-worth improved by 25.76% to Rs. 8758 crore from Rs. 6964 crore as reported during
last year. The book value per share increased to Rs. 173.38 from Rs. 137.87.The return on
equity stood at 23.69% and earnings per share increased to Rs. 41.08 from Rs. 34.18
reported during last year. The earnings per share grew at CAGR of 34.9% duringFY07
toFY10.
FINDINGS
Total Capital Adequacy ratio (CAR), stood at 12.51%, well above the regulatory benchmark of
9%.
Profit after tax net profit increased to Rs. 2075 crore compared to Rs. 1727crore achieved
during last year.
The operating expenses registered a lower growth of 13.28% compared to38.98% growth in
previous year. The operating profit of the Bank registered growth of 18.72%.y Net-worth
improved by 25.76%.
The return on equity stood at 23.69% and earnings per share increased to Rs.41.08 from Rs. 34.18.
.Cost to Income ratio has decreased by 115bps to 40.66% as compared to41.81% reported
during last year.
The return on average assets is maintained at a healthy rate of 1.25% as onMarch31, 2010
Page | 31
Chapter 4
Methodology
1. Desk Research; - A detailed review of relevant literature for the Coimbatore cluster was
conducted at this stage. This was complemented by a literature review of the prominent
industries in the cluster.
2. Questionnaire Development; - In-depth desk research was conducted to construct a detailed
questionnaire for survey focusing on the respective sectors. A survey of MSMEs through the
means of a structured interview was conducted for fulfilling the objective.
3. Survey; - The survey was conducted on companies from each sector, operating in the cluster;
which were randomly selected. The survey was done by a market research agency.
Companies fulfilling the criteria of having annual turnover below ` 1,000 mn for FY10 and
engaged in manufacturing activities were selected for the study.
4. Collection of Information; - All data and information gathered through surveys, information
available in public domain, data gathered from firms, etc. was collated for the study.
5. Analysis of data and information; - All information was scrutinized and analyzed to explore
the dynamics of the cluster.
Page | 32
Corporate
Treasury
Banking
a) Retail Banking
Retail banking segment is growing rapidly in the Indian banking industry. Every bank wants to
grow in this particular segment because of the higher margins. UNION BANK OF INDIA is also
showing a strong growth in this business segment. The retail banking business provides financial
products and services to its retail customers. The bank provide housing, retail trade, automobile,
consumer, education and other personal loans and deposit services, such as demand, savings and
fixed deposits, for our customers. In addition, UNION BANK OF INDIA distribute products
such as global debit cards and global credit cards. The bank also provides utility services such as
bill payment. The bank also distributes third-party products, including mutual fund products and
Page | 33
b) International Banking
The bank had a robust growth in International Banking Business. The foreign exchange turnover,
which was Rs361.02bn in 2004-05, reached the level of Rs408.94bn during the year, registering
a growth of 13.27%.The bank is having a correspondent relationship with 345 leading
international banks at all major international centers. The bank has entered into Rupee Drawing
Arrangements (RDA) with 23 international banks and 13 exchange houses in the Middle East.
The bank has also introduced Internet-based On-line Remittance Product for Non-Resident
Indians (NRIs) in U.K. and U.S.A as well as for exchange houses in the Middle East. The bank is
one of the leading players in the bullion market and offers various financial products related to
bullion at 10 centers in the country.
c) Corporate Banking
The Corporate Banking Segment of the bank offers various loan and fee-based products and
services to large corporate, Small and Medium Enterprises (SMEs) and to the agriculture sector.
In order to give a boost to the SME segment and to agriculture lending, the bank set up SME
cells and adopted cluster-centric approach for agriculture lending in areas with rich potential for
such activity. The bank also experimented with new delivery models for credit, including setting
up low cost rural ATMs. The bank also focused on micro-finance business as a convenient
distribution channel for its rural as well as low income customers.
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d) Treasury
Besides the traditional role of liquidity management and maintenance of statutory requirements
like Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR), treasury operations focused
on judicious investments, derivative transactions for hedging customers financial exposures as
well as its own balance sheet exposures. Bullion trading also played an important role in treasury
operations and products like metal loans and gold forwards were popularized. The bank has a
well laid down treasury policy and risk management systems for undertaking such transactions
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Chapter 5
CUSTOMERS SATISFACTION
Customer satisfaction refers to the extent to which customers are happy with the products and
services provided by a business. Customer satisfaction levels can be measured using survey
techniques and questionnaires
DEFINITIONS:
1) Customer satisfaction is equivalent to making sure that product and service performance
meets customer expectations.
2) Customer satisfaction is the perception of the customer that the outcome of a business
transaction is equal to or greater than his/her expectation.
are most likely to be loyal and to make report orders and to use a wide range of Services offered
by a business
There are many factors which lead in high levels of customer satisfaction including.
Products and services which is customer focused and hence provide high levels of value
for money. What is clear about customer satisfaction is that customers are most likely to
appreciate the goods and services that they buy if they are made to feel special. This occurs when
they feel that the products and services that they buy have been specially produced for them or
for people like them.
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Expressed:Customer Expectations are those requirements that are written down n the contract and agreed
upon by both parties for example, product specifications and delivery requirements .Suppliers
performance against these requirements is most of the items directly measurable.
Implied:Customer Expectations are not written or spoken but are the ones the customer would expect
the supplier to meet nevertheless. For example, a customer would expect the service
representative who calls on him to be knowledgeable and competent to solve a problem on the
spot. There are many reasons why customer expectations are likely to change overtime. Process
improvements, advent of new technology, changes in customers priorities, improved quality
of service provided by competitors are just a few examples. The customer is always right.
Suppliers job is to provide the customer what he/she wants, when he/she wants it. Customer
satisfaction is customers perception that a supplier has met or exceeded their expectations.
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Product quality
Premium Outflow
Return on Investment
Services
Market research
Telephonic interviews
Personal visits
Warranty records
Informal discussions
Satisfaction surveys
Depending upon the customer base and available resources, we can choose a method that is most
effective in measuring the customers perceptions. The purpose of the exercise is to identify
priorities for improvements. We must develop a method or combination of methods that helps to
continually improve service.
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Survey forms should be easy to fill out with minimum amount of time and efforts on
customers part. They should be designed to actively encourage the customer to complete the
questions. Yet they must provide accurate data should also be sufficiently reliable for
management decision making. This can be achieved by incorporating objective type questions
where customer has to rate on scale of say 1 to 10. For repeated surveys, you could provide the
rating that was previously accorded by the customer. This works like a reference point for the
customer. Space should always be provided for the customers own opinions this enables them to
state any additional requirements or report any shortcomings that are not covered by the
objective questions.
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Need recognition- realization of the difference between the desired and the current situation
that serves as a trigger for entire process.
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consultations
various Seminars,
Customer Meets, etc. to evaluate improve and widen the range of service to customer. However,
all our customers are requested to keep us informed of their experiences about the various
services rendered by the Bank and feel free to comment on this Code. We intend to bring it out in
many Regional Languages in subsequent years.
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Attend to all customers present in the banking hall at the close of business hours. Provide
separate 'Enquiry' or 'May I help you' counter at large branches. Offer nomination facility
to all deposit accounts (i.e. account opened in individual capacity) and all safe deposit
locker hirers (i.e. individual hirers).Display interest rates for various deposit schemes from
time to time.
Pay interest for delayed credit of out station cheques, as advised by Reserve Bank of India
(RBI) from time to time.
Accord immediate credit in respect of outstation and local cheques up to a specified limit
Page | 42
CHAPTER 6
SURVEY REPORT
DATA ANALYSIS & INTERPRETATION
To know customer view about union bank of India, I have done survey of 20 peoples and ask
them certain set of question:
1. When survey respondent were asked, do you have an account in this bank?
BANK ACCOUNT
100
90
80
70
60
95%
50
40
30
20
5%
10
0
YES
NO
INTERPRETATION
This bar diagram shows how many people are having bank account.
95% of the people are having bank account where as 5% of the people dont have an bank
account
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fixed A/c
26%
recurring A/c
5%
saving A/c
58%
current A/c
11%
INTERPRETATION
This pie diagram show which all bank account people are having.
55% people are having saving account.
10% people are having current account.
5% people are having recurring account.
25% people are having fixed account.
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45
40
35
30
security
25
interest
20
good relation
45%
15
35%
10
15%
5
0
security
interest
good relation
INTERPRETATION:
This bar diagram show how people are known about bank account
45% people open an account for security
35% people open an account for interest
15% people open an account for good relation
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PUBLIC AWARENESS
45
40
35
30
25
NEWS PAPER
20
ADVERTISEMENT
15
AGENT
45%
10
5
10%
30%
FRIEND
10%
NTERPRETATION:
This bar diagram shows how many people know about bank account.
10% people are aware about news paper.
30% peoples are aware about advertisement.
45% peoples are aware about agent.
10% peoples are aware about friend.
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FEATURES
60
50
40
E-BANKING
NEW SCHEMES
30
55%
ATM
20
10
25%
20%
0
E-BANKING
NEW SCHEMES
ATM
INTERPRETATION:
This bar diagram shows how many people like the features of this bank.
20% peoples like e-banking.
55% peoples like new schemes.
25% peoples like ATM.
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WHICH IS BETTER
80
70
60
YES
50
80%
40
NO
30
20
20%
10
0
YES
NO
INTERPRETATION:
This bar diagram shows how many people says which is better.
80% people say that private sector is better.
20% people say that public sector is better.
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INTERPRETATION
This bar diagram shows the people are prefer sector.
70 % of people are using public sector bank.
30 % of people are using private sector bank.
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15%
YES
NO
85%
INTERPRETATION
This bar diagram shows how many people say that for safe of money
85% people are says that to safe the money.
15% people are says that not for safe of money.
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SATISFACTION
50
45
40
35
VERY SATISFIED
30
NORMAL SATISFIED
50%
25
DISSATISFIED
20
15
30%
20%
10
5
0
VERY SATISFIED
NORMAL SATISFIED
DISSATISFIED
INTERPRETATION;
This bar diagram shows the people are preferring sector:
30 % of people are very satisfied
50 % of people are normal satisfied
20 % of people are dissatisfied
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35
30
25
SBI
20
AXIS
35%
15
20%
25%
ICICI
OTHERS
20%
10
5
0
SBI
AXIS
ICICI
OTHERS
INTERPRETATION
This bar diagram shows the how many people are go for other bank.
20 % of people go for state bank of India (SBI)
25 % of people go for AXIS bank
20 % of people go for ICICI bank
35% of people go for other bank
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Chapter 7
LIMITATIONS:
The time given for the summer internship i.e. 8 weeks was not sufficient enough to study
and understand the retail loans approval process of the Union bank of India.
The banks have their own confidential information and it was very difficult to make the
project and analyze it on the basis of hypothetical information
SUGGESTIONS:
UNION BANK OF INDIA has this time ranked 5th among all the Nationalized banks. The
reason for its ranking was the number of NPAs it had. It was found that a number of retail
loans ended up in NPAs. UNION BANK OF INDIA needs to develop a competitive edge
and the managers and the assistants need to keep a tab on the loans given.
Usually the managers would only fulfill their required target and then would forget about
more borrowers. They need to have more borrowers both for small and big loans.
Many times they pass a loan without the proper appraisal, i.e. the client may lack either the
projected and estimated balance sheet or the proper documents. In such cases there should
be a strict protocol followed
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Chapter 8
CONCLUSION:As discussed in the project above, Credit Appraisal appears to be the back bone of the banking
institution. It is equally important and dangerous, as there is always the chance of default
or some other risk. After dealing with almost every aspect of loans and advances one can
summarize that with a little bit of strict measures and a keen eye and understanding of a
companys balance sheet one can very well save the institute the risk other than the default risk.
Even the default risk can be to a certain limit mitigated, if we before sanctioning the amount
check the profile of the customer. Industry Report, banks own experiences and the ability of the
borrower to run his enterprise professionally are certain things one can check. A very crucial
aspect of credit appraisal is the
Credit rating
Union bank has introduced their own Internal Rating system of all borrowers enjoying/seeking
credit limits above Rs. 2 laces. The rating grades range from CR1 to CR8. Credit ratings up to
CR5 are investment grade. CR6 toCR8 are non-investment grade as per the loan policy of the
bank. Migration in credit rating
Especially downward migration should be discussed in detail and road map to improve the credit
rating has to be drawn up/implemented. A lot of times for some reasons, credit report is not
submitted and the submission of the proposal and its sanctioning is done without it, while
keeping in mind other necessary factors. It is to be seen and made mandatory that the credit
report must accompany the proposal as it gives a very clean and clear picture of the borrowers
credit worthiness. In order to potential NPAs it is significant to have a fair understanding of the
borrowers financial health. Thus, at least last three years balance sheet and Profit and loss
accounts should be obtained, in addition to projections of next 2 years. Now, most of the time
customers to prove their credit worthiness make the estimated balance sheets unrealistic,
such areas should be stressed and it should be checked whether the borrower has the ability to go
as per the projected Balance Sheet.
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Chapter 9
ANNEXURE
FORMATE OF CUTOMER SURVEY REPORT
SURVEY ON PROJECT OF CUSTOMER SATISFACTION ON UNION BANK
NAME:CONTACT NO.:1. Do you have an account in this bank?
a.
Yes.
b.
No.
For Securities
b.
For Interest
c.
Good Relation
4. How did you come to know about the facilities provided by this bank?
a. News Paper
b. Advertisement
c.
Agent
d.
Friend
E-banking
b.
New Schemes
c. ATM
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Yes.
b.
No.
9.
a.
Yes.
b.
No.
Very Satisfied
b.
Normal Satisfied
c.
Dissatisfied
10. If you will have an option against UNION BANK you will go fora.
SBI
b.
AXIS
c.
ICICI
d.
OTHER
COMMENT:-_________________________________________________________PROJECT
GUIDE: Mrs. Byshi Panikar
SURVEY
CONDECTED BY:
T.Y.B.COM (B & I)
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BIBLIOGRAPHY
BOOKS
1. Financial Marketing, Author Name:- D.K. Bandgar, Edition:- Fifth,
Semester:- Four (SYBBI)
2. International Banking And Finance, Author Name :- Deepak Abhyankar,
Edition Sixth, Semester :- Fifth (TYBBI)
WEB SIDE
www.wikipedia.org/wiki/unionbank
www.indianinfoline.com
www.allbanksolution.com
www.financialexpress.com/unionbank
www.moneycontrol.com/unionbank/financialstatement
www.timesofIndia/unionbank
www.indiaeducation.net
www.rbi.org.co.in
www.unionbank.com
NEWS PAPER
Times of India
Time of Economic
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