A Summer Internship Project Report on

CREDIT RISK ASSESSMENT IN SBI (SME & PER) Commented [C1]: 1st line times new roman 16, title case, 1.5
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POST GRADUATE DIPLOMA IN MANAGEMENT Commented [C2]: 14 upper case, after that 2 spacing (Enter)

By Commented [C3]: 14 Title Case, after that single spacing (Enter)

NIRMOY DEY Commented [C4]: 14 upper case

Register No 0920016 Commented [C5]: 14 Title Case. 1.5 spacing, after that 2
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Under the guidance of Commented [C6]: 14 Sentence case, after that single spacing
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DR ANIRBAN GHATAK Commented [C7]: 14 upper case, after that 2 spacing (Enter)

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Christ Institute of Management

Lavasa, Pune
2017 Commented [C9]: 1.5 spacing between lines
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 DECLARATION Commented [C11]: Upper 14, after that 2 spaces (Enter)

I, Nirmoy Dey, do hereby declare that the Summer Internship Project entitled Credit Risk Assessment
in SBI (SME & PER), has been undertaken by me as part of my studies in the degree of Master of
Business Administration. I have completed this study under the guidance of Vineet Gupta, Professor of
Finance, Christ Institute of Management, Lavasa and Mr. Anil Kumar Giri, Asst Manager, State Commented [C12]: 12, Sentence Case, 1.5 spacing after that 1
spacing. (Enter)
Bank of India, Kolkata.

I also declare that this work has not been submitted for the award of any degree, diploma, associateship
or fellowship or any other title in this Institute or any other College/University. Commented [C13]: 12, Sentence Case, 1.5 spacing after that 2
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Place: Lavasa (Name & Signature of the Candidate)

Date: Nirmoy Dey
Register No 0920016

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 CERTIFICATE Commented [C14]: Upper 14, after that 2 spaces(Enter)

This is to certify that the Summer Internship Project submitted by Mr Nirmoy Dey on the title Credit
Risk Assessment in SBI (SME & PER), is a record of projrct work done by him during the academic
year 201517 under my guidance and supervision in partial fulfillment of Post Graduate Dilploma in
Management. This Summer Internship Project has not been submitted for the award of any degree,
diploma, associateship or fellowship or any other title in this Institute or any other College/University. Commented [C15]: 12, Sentence Case, 1.5 spacing, after that 2
spacing(Enter)

Place: Lavasa (Name & Signature of the Guide)

Date: Dr Anirban Ghatak

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CERTIFICATE FROM THE COMPANY

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 ACKNOWLEDGEMENTS
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I am indebted to many people who helped me accomplish this internship successfully.

First, I thank the Director, Dr Fr Jossy George of Christ Institute of Management for giving me the
opportunity to do my summer internship project.

I thank, Fr Arun C Antony, Coordinator, Prof. Binu P Paul, Head-Academics of Christ Institute of
Management for their kind support.

I wish to take this opportunity to express my deep sense of gratitude to thank Mr. Anil Kumar Giri
(Asst,Manager SMECCC) for his invaluable guidance throughout my project. I sincerely thank State
Bank of India for providing me with an opportunity to work in the SMECCC Department & RACPC
of S.B.I to get an insight about Credit Risk Assessment.

I thank Prof. XXXXXXXXXX, for his support and guidance during the course of my summer
internship. I remember him with much gratitude for his patience and motivation, but for which I could
not have submitted this work.

I thank my parents for their blessings and constant support, without which this summer internship
would not have seen the light of day.
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Nirmoy Dey
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 TABLE OF CONTENTS Commented [C19]: Upper 14, after that 1 space (Enter)

Declaration ii
Certificate iii
Certificate from the Company iv
Acknowledgements v
Table of Contents vi
List of Tables viii
List of Charts /Graphs ix
Abstract x Commented [C20]: Roman Nos, after that 1 space.

CHAPTER I
INTRODUCTION 1
CHAPTER II
COMPANY PROFILE 8
CHAPTER III
RESEARCH METHODOLOGY
3.1 INTRODUCTION 19
3.2 STATEMENT OF THE PROBLEM 19
3.3 OBJECTIVES OF THE STUDY 20
3.4 SCOPE OF THE STUDY 20
3.5 SOURCES OF DATA 20
3.6 LIMITATIONS 21
CHAPTER IV
INDUSTRY OVERVIEW 22
CHAPTER V
DATA ANALYSIS AND INTERPRETATION 29

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CHAPTER VI
FINDINGS, CONCLUSION ANDSUGGESTIONS
5.1 FINDINGS 47
5.2 CONCLUSION 48
5.3 SUGGESTIONS 48
BIBLIOGRAPHY 50
APPENDICES 52

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 LIST OF TABLES Commented [C21]: Upper 14, after that 1 space

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Table 1.1 List of Banks 77

Table 2.1 Risk Types 78
Table 4.1 Owners Details 79
Table 4.2 Companys Standing 80
Table 4.3 Credit Market Analysis 81
Table 4.4 Ratio Analysis 82
Table 4.5 Cash Flow Analysis 83

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 LIST OF CHARTS Commented [C23]: Upper 14, after that 1 space

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4.1 TOL/TNW 48
4.2 Current Ratio 54
4.3 ROCE 55
4.4 PBDIT/INTT 55
4.5 PAT/NET SALES 56
4.6 (INV.+RECV.)/SALES 56

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 ABSTRACT

State Bank of India (SBI) is the forerunner in the field of SME financing. Majority of the loans to SMEs
are been provided by SBI. SBI has introduced various schemes for SMEs. The various schemes are
according to the sector in which a particular SME belongs. Small Medium Enterprises are applying for
loan in the SBI branches or SME office. Then the loan proposal came into the local head office because
many of SBI branches do not have the authority to sanction the loan. But many SME branches like Garia,
New alipore they have their own authority to sanction a SME loan.

After receiving the proposal of a SME loan in local head office I actually did the analysis of balance
sheet which is audited and if the projected balance sheet is not given by the SME organization also did
projection also i.e. Credit Market Analysis. After this the important ratios are automatically calculated
with the help of balance sheet data. SBI is actually using a software with the help of this I calculated the
financial indicators.

With the help of these ratios I did the Credit Risk Assessment it is basically a scoring system which
includes business risk and management risk also. In CRA Six important ratios is there which are used to
calculate the financial risk. Business risk and management risk depend upon the company
competitiveness, product, background etc. SBI hurdle rate is SB-10 beyond that the loan is not
sanctioned.
 CHAPTER I
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INTRODUCTION (Font Algerian-36)

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 CHAPTER II
COMPANY PROFILE
 CHAPTER III
RESEARCH METHODOLOGY
 CHAPTER IV
INDUSTRY OVERVIEW
 CHAPTER V
DATA ANALYSIS
AND
INTERPRETATION
 CHAPTER VI
FINDINGS, CONCLUSION AND
SUGGESTIONS
 74

References
 References

Abor, J., & Biekpe, N. (2007). Small business reliance on bank financing in Ghana. Emerging Markets
Finance and Trade, 43(4), 93 - 102.
Adedeji, A. (1998). Does the pecking order hypothesis explain the dividend payout ratios of firms in the
UK? Journal of Business Finance and Accounting, 25(9 & 10), 1127 - 1155.
Alan, A., & Danbolt, J. (2000). Capital Structure and its Determinants in the U.K. Department of
Accounting and Finance University of Glasgow, Working Paper G12 8LE.
Alexander, V. D., Thomas, H., Cronin, A., Fielding, J., & Moran-Ellis, J. (2008). Mixed methods. In:
Gilbert, N. (Ed.) Researching social life. London: Sage.
Allen, D. E. (1993). The pecking order hypothesis: Australian evidence. Applied Financial Economics,
3(2), 101-112.
Alti, A. (2006). How persistent is the impact of market timing on capital structure? Journal of Finance,
61, 1681-1710.
Ang, J. S. (1992). On the theory of finance for privately held firms. The Journal of Small Business
Finance, 1(3), 185-203.
Ang, J. S. (1991). Small business uniqueness and the theory of financial management. The Journal of
Small Business Finance, 1(1), 1-13.
APPENDICES
 Table & Charts
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Table 2.1: Main elements influencing capital structure Commented [C25]: 12, single spacing

Elements Equity preference Debt preference

Market elements High interest rates Low interest rates
Scarce financial resources Capital very available
Higher stock price Low stock price
Industry elements New industry Mature industry
Growing Declining
High risk Low risk
Source: Sheehan and Graham, (2001), p. 5.

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Chart 4.1: Product groups of MSMEs

Source: MSMEs: Annual Report 2010-11, p. 24.

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Table 5.4: ANOVA table for manufacturing and service SMEs

Model Sum of Squares Df Mean Square F p

Regression 15764.014 10 1576.401 1800.535 .000
1 Residual 1420.966 1623 0.876

Total 17184.98 1633

Regression 15573.39 10 1557.339 2539.806 .000
2 Residual 216.45 353 0.613
Total 15789.84 363
Source: Secondary Data.
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