CHAPTER-1

1.1 INTRODUCTION

Finance is the life blood of trade, commerce and industry. Now-a-days banking sector acts as the backbone of
modern business. Develpoment of any country mainly depends upon the banking system.

The term bank is either derived from old Italian word banca or from a French word Banque both means a
Bench or money exchange table. In olden days, European money lenders or money changers used to display
(show) coins of different countries in big heaps (quantity) on benches or tables for the purpose of lending or
exchanging.

A bank a financial institution which deals with deposits and advances and other related services. It receives
money from those who want to save in the form of deposits and it lends money to those who need it.

1.2 Definition

1) Oxford Dictionary defines a bank as “an establishment for custody of money, which it pays out on
customers order”.
2) A bank is a financial institution licensed to receive deposits and make loans. Banks may
also provide financial services, such as wealth management, currency exchange and safe
deposit boxes. There are two types of banks: commercial/retail banks and investment
banks. In most countries, banks are regulated by the national government or central bank.

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 1.3 Characteristics / Features of a Bank

1 Dealing in money:

The banks accept deposits from the public and advancing them as loans to the needy people. The deposits may
be of different types current, fixed, savings, etc. accounts. The deposits are accepted on various terms and
conditions.

2  Deposits must be withdrawn able:

The deposits (other than fixed deposits) made by the public can be withdraw able by cheques, draft or
otherwise, i.e., the bank issue and pay cheques. The deposits are usually withdrawn able on demand.

3  Dealing with credit:

The banks are the institutions that can create credit i.e., creation of additional money for lending. Thus,
"creation of credit' is the unique feature of banking.

4 Commercial in nature:

Since all the banking functions are carried on with the aim of making profit, it is regarded as a commercial
institution.

5  Nature of agent:

Besides the basic functions of accepting deposits and lending money as loans, banks possess the character of an
agent because of its various agency services.

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 1.4 Type of Banks: Different Types of Banks & their Functions.

The focus of banking is varied, the needs diverse and methods different. Thus, we need
distinctive kinds of banks to cater to the above-mentioned complexities. Deposit-taking
institutions take the form of commercial banks, which accept deposits and make commercial, real
estate, and other loans. There are also mutual savings banks, which accept deposits and make
mortgage and other types of loans. Another type is credit unions, which are cooperative
organizations that issue share certificates and make member (consumer) and other loans.

The banking industry can be divided into following sectors, based on the clientele served and
products and services offered:

Retail bank

.Commercial banks

Cooperative banks

Investment Banks

Specialized banks

Central banks

 Retail Banks:

Retail banks provide basic banking services to individual consumers. Examples include savings banks, savings
and loan associations, and recurring and fixed deposits. Products and services include safe deposit boxes,
checking and savings accounting, certificates of deposit (CDs), mortgages, personal, consumer and car loans.

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  Commercial Banks:

Banking means accepting deposits of money from the public for the purpose of lending or investment.
Commercial Banks provide financial services to businesses, including credit and debit cards, bank accounts,
deposits and loans, and secured and unsecured loans. Due to deregulation, commercial banks are also competing
more with investment banks in money market operations, bond underwriting, and financial advisory work.
Commercial banks in modern capitalist societies act as financial intermediaries, raising funds from depositors
and lending the same funds to borrowers. The depositors’ claims against the bank, their deposits, are liquid,
meaning banks are expected to redeem deposits on demand, instantly.

Banks’ claims against their borrowers are much less liquid, giving borrowers a much longer span of time to
repay money owed banks. Because a bank cannot immediately reclaim money lent to borrowers, it may face
bankruptcy if all its depositors show up on a given day to withdraw all their money.

There are two types of commercial banks, public sector and private sector banks.-

 Public Sector Banks:

Public sectors banks are those in which the government has a major stake and they usually need to emphasize on
social objectives than on profitability. 

 Private sector banks:

Private sector banks are owned, managed and controlled by private promoters and they are free to operate as per
market forces.

 Investment Banks:

An investment bank is a financial institution that assists individuals, corporations and governments in raising
capital by underwriting and/or acting as the client's agent in the issuance of securities. An investment bank may
also assist companies involved in mergers and acquisitions, and provide ancillary services such as market
making, trading of derivatives, fixed income instruments, foreign exchange, commodities, and equity securities.

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Investment banks aid companies in acquiring funds and they provide advice for a wide range of transactions.
These banks also offer financial consulting services to companies and give advice on mergers and acquisitions
and management of public assets.

 Cooperative Banks:

Cooperative Banks are governed by the provisions of State Cooperative Societies Act and meant essentially for
providing cheap credit to their members. It is an important source of rural credit i.e., agricultural financing in
India.

 Specialized Banks:

Specialized banks are foreign exchange banks, industrial banks, development banks, export-import banks
catering to specific needs of these unique activities. These banks provide financial aid to industries, heavy
turnkey projects and foreign trade.

 Central Banks:

Central banks are bankers’ banks, and these banks trace their history from the Bank of England. They guarantee
stable monetary and financial policy from country to country and play an important role in the economy of the
country. Typical functions include implementing monetary policy, managing foreign exchange and gold
reserves, making decisions regarding official interest rates, acting as banker to the government and other banks,
and regulating and supervising the banking industry.

These banks buy government debt, have a monopoly on the issuance of paper money, and often act as a lender
of last resort to commercial banks. The term bank nowadays refers to these commercial banks. The Central bank
of any country supervises controls and regulates the activities of all the commercial banks of that country. It also
acts as a government banker. It controls and coordinates currency and credit policies of any country. The
Reserve Bank of India

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 1.5 History of banking

The history of banking refers to the development of  banks and banking throughout history, with banking
defined by contemporary sources as an organization which provides facilities for acceptance of deposits, and
provision of loans.

The history begins with the first prototype banks of merchants of the ancient world, which made grain loans to
farmers and traders who carried goods between cities. This began around 2000 BC in Assyria and Babylonia.
Later, in ancient Greece and during the Roman Empire, lenders based in temples made loans and added two
important innovations: they accepted deposits and changed money. Archaeology from this period in ancient
China and India also shows evidence of money lending activity.

Many histories position the crucial historical development of a banking system to medieval and
Renaissance Italy and particularly the affluent cities of Florence, Venice and Genoa.
The Bardi and Peruzzi families dominated banking in 14th century Florence, establishing branches in many
other parts of Europe. The most famous Italian bank was the Medici bank, established by Giovanni Medici in
1397. The oldest bank still in existence is Banca Monte dei Paschi di Siena, headquartered in Siena, Italy, which
has been operating continuously since 1472. The development of banking spread from northern Italy throughout
the Holy Roman Empire, and in the 15th and 16th century to northern Europe. This was followed by a number
of important innovations that took place in Amsterdam during the Dutch Republic in the 17th century, and in
London in the 18th century. During the 20th century, developments in telecommunications and computing
caused major changes to banks' operations and let banks dramatically increase in size and geographic spread.
The financial crisis of 2007–2008 caused many bank failures, including some of the world's largest banks, and
provoked much debate about bank regulation.

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 1.6 PHASES OF INDIAN BANKING SYSTEM

The journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned
below :

 Phase I

The General Bank of India was established in the year 1786. Bank of Hindustan and Bengal Bank came next. The
East India Company has established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843)
as independent units and it was called as ‘Presidency Banks’. These three banks were merged in 1920 and
Imperial Bank of India was come into force which started as private shareholders banks, mostly Europeans
shareholders.

Allahabad Bank was established in 1865, first time exclusively by Indians, Punjab National Bank Ltd. was set up
in 1894 with headquarters at Lahore. Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian
Bank, and Bank of Mysore were set up in between 1906 and 1913and in 1935 Reserve Bank of India came into
force.

The growth of banking sector was very slow during the first phase and banks also experienced periodic failures
between 1913 and 1948. There were approximately 1100 small banks at that time. To streamline the functioning
and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949
which was later changed to Banking Regulation Act 1949 by amending Act of 1965. Reserve Bank of India was
vested with wide-ranging powers for the supervision of banking in India as the Central Banking Authority.

 Phase II

Government of India has taken major steps in this Indian Banking Sector Reform after independence. In 1955, it
nationalised Imperial Bank of India with extensive banking facilities on a large scale operation in rural and semi-
urban areas. It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions

7
 of the Union and State Governments all over the country.

State Bank of India, including its seven subsidiaries was nationalized in 1960, 1969, major process of
nationalisation was carried out. It was the effort of the former Prime Minister of India, Mrs. Indira Gandhi. 14
major commercial banks in the country were nationalised. They are;
 Central Bank of India
 Syndicate Bank
 Union Bank
 Bank of Baroda
 Canara Bank
 Indian Bank
 UCO Bank
 Bank of India
 Bank of Maharashtra
 Dena Bank
 Punjab National Bank
 Indian Overseas Bank
 Allahabad Bank
 United Bank of India
Second phase of nationalization Indian Banking Sector Reform was started in 1980 with seven more banks. This
step brought 80% of the banking segment in India under Government ownership.

The following are the important steps taken by the Government of India to Regulate Banking Institutions in the
Country
 1949: Enactment of Banking Regulation Act.
 1955: Nationalisation of State Bank of India.
 1959: Nationalisation of SBI subsidiaries.
 1961: Insurance cover extended to deposits.
 1969: Nationalisation of 14 major banks.
 1971: Creation of credit guarantee corporation.

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 1975: Creation of regional rural banks.
 1980: Nationalisation of seven banks with deposits over 200 crore.
After the nationalisation of banks, the branches of the public sector bank India grown to approximately 800% in
deposits and advances took a huge jump by 11,000%.

Banking in the brightness of Government ownership gave the public implicit faith and immense confidence about
the sustainability of these institutions.

 Phase III

This phase has introduced many more facilities and changes in the banking sector in its reforms measure. In 1991,
under the chairmanship of M Narasimham, a committee was set up by his name which worked for the
liberalization of banking practices.

The country is rushed with foreign banks and their ATM stations. Efforts are being put to give a satisfactory
service to customers. Phone banking and net banking are introduced. The entire system became more convenient
and speedy. This face has given more importance to time than money. The financial system of India has shown a
great deal of flexibility. It is sheltered from any crisis triggered by any external macroeconomics shock as other
East Asian Countries faced. This is all due to a flexible exchange rate system, the foreign reserves are high, the
capital account is not yet fully convertible, and banks and their customers have restricted foreign exposure.

For the past three decades India's banking system has several outstanding achievements in its credit. The most
striking is its widespread reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact,
Indian banking system has reached even to the remote corners of the country, this is one of the main reasons of
India's growth process.

The government's regular policy for Indian bank has paid rich dividends with the nationalization of 14 major
private banks of India. Years ago an account holder had to wait for hours at the bank counters or for withdrawing
his own money for getting a draft. Today, he has a choice. In those days the most efficient bank transferred
money from one branch to other in two days. But now it is very simple as instant messaging. Money has become
the order of the day.

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 CHAPTER-2

Research Methodology
The financial services industry has recently been open to historic transformation. So-called developments’ are emerging
and advancing rapidly in all areas of financial intermediation and financial markets: e-finance, e-money, E-banking, e-
brokering, e-insurance, e-exchanges, and even e-supervision. The new information technology (IT) is turning into the most
important factor in the future development of banking, influencing banks‘ marketing and business strategies. The driving
forces behind the rapid transformation of banks are influential changes in the economic environment: innovations in
information technology, innovations in financial products, liberalization and consolidation of financial markets,
deregulation of financial intermediation etc. These and other factors make it complicated to design a bank‘s strategy,
which process is threatened by unforeseen developments and changes in the economic environment and therefore
strategies must be flexible to adjust to these changes. The question is not any more whether the emergence of Internet
has been a threat or an opportunity as those who have decided to protect themselves from the threats instead of using
the opportunities are determined to vanish from the marketplace. 1 Electronic Banking lets you handle many banking
transactions via your own personal computer. For instance, you may use your computer to view your account balance,
request transfers between accounts and pay outstanding bills electronically. Internet banking system is a method in which
a personal computer is connected to internet by an internet service provider directly to a host computer system of a bank
such that customer service requests can be processed automatically without need for intervention by customer service
representatives. The system is capable enough to distinguish between those customer service requests which are capable
of automated fulfilment and those requests which require handling by a customer service representative. The system is
connected with the host computer system of the bank so that the remote banking customer can access other automated
services of the bank. The method of the invention includes the steps of inputting a customer 2 banking request from
among a menu of banking requests at a remote personnel computer which transmits the banking requests to a host
computer over a network; receiving the request at the host computer; identifying the type of customer banking request
received; automatic logging of the service request, comparing the received request to a stored table of request types,
each of the request types having an attribute to indicate whether the request type is capable of being fulfilled by a
customer service representative or by an automated system; and, depending upon the attribute, directing the request
either to a queue for handling by a customer service representative or to a queue for processing by an automated system.

1.2 Statement of Problem

In many banks throughout the world, e-banking is now the focal area of bankers because it reduces the cost of doing
transactions, attracts new customers, makes transactions faster than before, creates new markets, and enhances service
quality. E-banking is a new industry and consumer acceptance and use of e-banking is still limited. There is only a vague
understanding of factors influencing consumers‘ adoption of e-banking. Many corporate and consumers in India either do
not trust or do not have access to the necessary infrastructure to be able to process e-payments. Very little research has

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been undertaken in India on infrastructure and security measures of E-banking in India in general and in Pune city in
particular, hence the need for a study of this nature was felt. The following question can therefore be asked:

 What are the factors that influence the adoption of e-banking in Pune City?

 An understanding of how demographic characteristics, social influences, consumer perceptions and attitudes toward e-
banking influence the adoption of e-banking?

 What are the various infrastructure and security measures taken up by RBI and PSBs? This study will enable banks to
develop solutions and plans to attract consumers and to adopt proper infrastructure and security measures.

1.6 Statement of the Hypothesis

The hypotheses set for this study are:

1. Indian public sector banks lack state of the art infrastructural facilities (AIF) for developing E-banking

2. Indian public sector banks do not observe the principles of operational risk (POR) for the development of E-banking

3. Indian banks lack adequate cultural infrastructure (CI) for developing E-banking.

4. Indian banks lack adequate legal infrastructure (LI) for developing E-banking.

Data Collection
The present study is of analytical and exploratory nature. Accordingly, the use is made of primary data. The primary data is
collected with the help of questionnaires from a sample of respondents (100 bank officers and 200 customers) from Pune
City using the E-banking services provided by the various branches of PSBs.

The key intention of the study is to evaluate the security and infrastructure measures of electronic banking adopted so
far. Therefore main objective of the study is evaluation of E-banking measures adopted in nationalized banks with
reference to Pune City.

a. Primary data: this is first hand information is collected from the respondents associated with selected banks.
Structured questionnaire prepared by the researcher and it is filled up by 200 bank customers and 100 bank
officers. Respondent responses are collected from pune city.
b. Secondary data: This shall be collected by using a verity of sources. This shall be collected by using a verity of
sources. These sources are:
 Publications of Public sector banks
 RBI reports
 Journals Of banking and finance
 Web site of RBI In the present study, sample is divided into two subgroups based on service users opinion

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regarding e-banking based on the PSBs. Service users are selected randomly from the respective banks. The
stratified random sampling technique is used for selection of service users for collecting data from Pune City for
the study purpose. This method is used to make research procedure faster by obtaining a large number of
accomplished questionnaires rapidly and efficiently. This helps to choose the banking sector in Pune City and their
websites.
These websites help to get all essential information of the E-banking services. The selected public sector banks
operating in Pune City in form the universe of the study. The survey of 200 E-banking service users of the selected
Public sector banks has been done. The required data has been collected from respondents through the well-
structured and pre-tested questionnaire.
Number of sample units is to be selected from stratum decided by the researcher in advance. This number is
known as quota which is fixed according to some specific characteristics such as usage of E-banking services via -
ATM, Internet and mobile. Quota sampling technique is used for selecting E-banking service users for the research
purpose. From study area, 50 service users per bank have been selected. The researchers applied their judgments
in the choice of the sample and get the required information quickly.

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2. 1 HISTORY OF A CANARA BANK

Late Sri Ammembal Subbarao Pai

 
FOUNDER OF CANARA BANK

Founded as 'Canara Bank Hindu Permanent Fund' in 1906, by late Shri

Ammembal Subba Rao Pai, a philanthropist, this small seed blossomed into a
limited company as 'Canara Bank Ltd.' in 1910 and became Canara Bank in
1969 after nationalization.

 
"A good bank is not only the financial heart of the community, but also one with an obligation of helping in
every possible manner to improve the economic conditions of the common people" - A. Subba Rao Pai. 

Founding Principles

1. To remove Superstition and ignorance.

2. To spread education among all to sub-serve the first principle.
3. To inculcate the habit of thrift and savings.
4. To transform the financial institution not only as the financial heart of the community but the social heart
as well.
5. To assist the needy.
6. To work with sense of service and dedication.
7. To develop a concern for fellow human being and sensitivity to the surroundings with a view to make
changes/remove hardships and sufferings.

Sound founding principles, enlightened leadership, unique work culture and remarkable adaptability to changing
banking environment have enabled Canara Bank to be a frontline banking institution of global standards.

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Significant Milestones 

Year  
1st July 1906 Canara Hindu Permanent Fund Ltd. formally registered with a capital of 2000 shares of  50/-
each, with 4 employees.
1910 Canara Hindu Permanent Fund renamed as Canara Bank Limited
1969 14 major banks in the country, including Canara Bank, nationalized on July 19
1976 1000th  branch inaugurated
1983 Overseas branch at London inaugurated Cancard (the Bank’s credit card) launched
1985 Takeover of Lakshmi Commercial Bank Limited Commissioning of Indo Hong Kong
International Finance Limited (now a full fledged branch)
1987 Canbank Mutual Fund & Canfin Homes launched
1989 Canbank Venture Capital Fund started
1989-90 Canbank Factors Limited, the factoring subsidiary launched
1992-93 Became the first Bank to articulate and adopt the directive principles of “Good Banking”.
1995-96 Became the first Bank to be conferred with ISO 9002 certification for one of its branches in
Bangalore
2001-02 Opened a 'Mahila Banking Branch', first of its kind at Bangalore, for catering exclusively to
the financial requirements of women clientele.
2002-03 Maiden IPO of the Bank
2003-04 Launched Internet Banking Services
2004-05 100% Branch computerization
2005-06 Entered 100th Year in Banking Service. Launched Core Banking Solution in select branches.
Number One Position in Aggregate Business among Nationalized Banks.
2006-07 Retained Number One Position in Aggregate Business among Nationalized Banks. Signed
MoUs for Commissioning Two JVs in Insurance and Asset Management with international
majors viz., HSBC (Asia Pacific) Holding and Robeco Groep N.V respectively.
2007-08 Launching of New Brand Identity. Incorporation of Insurance and Asset Management JVs.
Launching of 'Online Trading' portal. Launching of a ‘Call Centre’. Switchover to Basel II
New Capital Adequacy Framework.
2008-09 The Bank crossed the coveted  3 lakh crore in aggregate business. The Bank’s 3rd foreign
branch at Shanghai commissioned.
2009-10 The Bank’s aggregate business crossed  4 lakh crore mark.
Net profit of the Bank crossed  3000 crore. The Bank’s branch network crossed the 3000
mark.
2010-11 The Bank’s aggregate business crossed  5 lakh crore mark. Net profit of the Bank crossed 

14
 4000 crore. 100% coverage under Core Banking Solution. The Bank’s 4th foreign branch at
Leicester and a Representative office at Sharjah, UAE, opened. The Bank raised  1993 crore
under QIP. Govt. holding reduced to 67.72% post QIP.
2011-12 Total number of branches reached 3600. The Bank’s 5th foreign branch at Manama, Bahrain
opened. 
2012-13 Highest Dividend of 130% paid for the year
2013-14 1027 branches and 2786 ATMs opened during the year. Global business crossed the  7 lakh
crore milestone. Switchover to Basel III New Capital Adequacy Framework.
2014-15 Global Business of the Bank crossed  8 lakh crore.
2015-16 The Bank's 8th foreign branch at DIFC (Dubai) opened.

2.2 PROFILE
 
 A Brief Profile of the Bank 

Widely known for customer centricity, Canara Bank was founded by Shri Ammembal Subba Rao Pai, a
great visionary and philanthropist, in July 1906, at Mangalore, then a small port town in Karnataka. The
Bank has gone through the various phases of its growth trajectory over hundred years of its existence.
Growth of Canara Bank was phenomenal, especially after nationalization in the year 1969, attaining the
status of a national level player in terms of geographical reach and clientele segments. Eighties was
characterized by business diversification for the Bank. In June 2006, the Bank completed a century of

15
 operation in the Indian banking industry. The eventful journey of the Bank has been characterized by
several memorable milestones. Today, Canara Bank occupies a premier position in the comity of Indian
banks. Canara Bank has several firsts to its credit. These include:

 Launching of Inter-City ATM Network

 Obtaining ISO Certification for a Branch
 Articulation of ‘Good Banking’ – Bank’s Citizen Charter
 Commissioning of Exclusive Mahila Banking Branch
 Launching of Exclusive Subsidiary for IT Consultancy
 Issuing credit card for farmers
 Providing Agricultural Consultancy Services

Over the years, the Bank has been scaling up its market position to emerge as a major 'Financial Conglomerate'
with as many as nine subsidiaries/sponsored institutions/joint ventures in India and abroad. As at June 2016, the
Bank has further expanded its domestic presence, with 5847 branches spread across all geographical segments.
Keeping customer convenience at the forefront, the Bank provides a wide array of alternative delivery channels
that include 9657 ATMs, covering 4081 centres. Several IT initiatives were undertaken during the year. The Bank
set up 172 hi-tech E-lounges in select branches with facilities like ATM, Cash Deposit Kiosk with voice guided
system, Cheque Deposit Kiosk, Self Printing Passbook Kiosk, Internet Banking Terminal, Online Trading
Terminal and Corporate Website Access. ‘Canara e-Infobook’ – an electronic passbook and banking related
information facility was introduced on mobile platforms - Android, Windows & iOS. The Bank also launched
Canara Bank RuPay Debit Card, Canara Club Card – Debit, Canara Secured Credit Card, Canara Elite Debit
Card, Canara Bank Platinum Rupay Cards, Platinum Rupay Card and EMV Chip Cards under debit and credit
cards. Online Savings Bank and PPF account opening were introduced.The Bank made several value additions
under internet banking and mobile banking services. The Bank has introduced enhanced version of CanMobile,
Canara e-InfoBook- an electronic passbook and banking related information facility on mobile platforms -
Android, Windows & iOS and Canara m-Wallet to provide more convenience and facilities to customers. Canara
Galaxy, a combo product launched, comprising SB, Demat, OLT, Internet & Mobile Banking, Insurance, card
services and other add-ons. Under education loan interest subsidy, web portals released for Central Scheme for
Interest Subsidy (CSIS), Ministry of HRD, GoI, Dr. Ambedkar Central Sector Scheme of Interest Subsidy
(ACSIS), Ministry of Social Justice & Empowerment, GoI and Padho Pardesh, Ministry of Minority Affairs, GoI.

16
The Bank has launched Instant loan application in principle sanction portal for Housing Loan and Car Loan. The
Bank issued MUDRA Debit Card for overdraft accounts under MUDRA Card scheme. P2U (Person to UIDAI)
funds transfer through Mobile Banking in WAP channel was enabled by the Bank. Subscription of Social
Security Schemes of Govt. of India through ATM, SMS and Internet Banking was enabled by the Bank. The
Bank has implemented “Jeevan Praman” a digital life certificate for pensioners. The Bank has Implemented
automated reminder SMS/Email Alerts to customers intimating to submit RC Copy/Insurance for the vehicle
loans and tax paid receipt/certificate for the mortgaged property. Missed Call / SMS Based ePass Sheet
generation made live by the Bank. The Bank has successfully implemented SMS/Email Alerts to NPA Borrowers
intimating to regularize overdues in accounts. Mobile Banking Registration through ATMs (Interoperability
through NFS) has been successfully introduced by the Bank. Not just in commercial banking, the Bank has also
carved a distinctive mark, in various corporate social responsibilities, namely, serving national priorities,
promoting rural development, enhancing rural self-employment through several training institutes and
spearheading financial inclusion objective. Promoting an inclusive growth strategy, which has been formed as the
basic plank of national policy agenda today, is in fact deeply rooted in the Bank's founding principles. "A good
bank is not only the financial heart of the community, but also one with an obligation of helping in every
possible manner to improve the economic conditions of the common people". These insightful words of our
founder continue to resonate even today in serving the society with a purpose. The growth story of Canara Bank
in its first century was due, among others, to the continued patronage of its valued customers, stakeholders,
committed staff and uncanny leadership ability demonstrated by its leaders at the helm of affairs. We strongly
believe that the next century is going to be equally rewarding and eventful not only in service of the nation but
also in helping the Bank emerge as a "Preferred Bank" by pursuing global benchmarks in profitability,
operational efficiency, asset quality, risk management and expanding the global reach.

17
 2.3 Canara bank mortgage service
Canara Bank Mortgage Service is one of the foremost in the Indian mortgage market. The Canara Bank
mortgage service is an important part of the Canara Bank. The Canara Bank Mortgage service provides very high
quality financial products pertaining to home loans and loans for household purposes. The mortgage market in
India is displaying rapid growth in the past few years. The foremost players in this sector are the finance
corporation but presently the commercial banks are also started playing an important role in the development and
growth of the India Mortgage Market. Presently the total worth of the mortgage market in India is nearly US $ 18
billion. With all this development the ration between the gross domestic product to mortgage in India is poor
when compared to other developed countries. The ratio in India is very low in comparison to The ratio in the
foreign countries ranges from 25% to 60% whereas in India the ratio is 2.5%.

18
 2.4 Objectives of the Canara Bank Mortgage Service

 To focus on cost management and profits management

 To provide the customers with the best services
 To put emphasize on the quality of the credit and advance in form of mortgage loan
The purpose of the Canara Bank Mortgage Service is to provide mortgage
loans for purchase, expansion, construction, repairs, and renovations of
flats, apartments, residential complexes, purchase of land for the purpose
of construction. The Canara Bank Mortgage service also provides the
facility to take over of liability of the customers pertaining to other
housing boards, housing finance companies, co-operative societies, co-
operative banks, and commercial banks.

Person below the age of 55 years such as professionals, employees,

individual person, self-employed can avail Canara Bank Mortgage
Service. People above that age of 55 years can also take out a mortgage
loan but there are some stipulations. Others people who are income tax
assessee and people who are salaried individuals and people who are self
employed individuals. The salaried class can get a maximum of 48 times
gross monthly income and others can get a maximum of the gross annual
income of four years. The type of loans given is current account overdraft
or term loan. The contribution of the customer ranges from 15% to 25% of
the total loan amount depending on the loan.

The Canara Bank Mortgage Service is provided against collateral security

19
such as residential house or apartment, industrial property, urban
commercial complex, possessed in the name of the receiver of the loan.
The security such as rented house can be accepted if the same property is
on a lease and the person should also have the authority to collect the rent
under the power of attorney.

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 2.5 Bank Policies
 
 POLICY ON COLLECTION OF CHEQUES/INSTRUMENTS- 2014-15

1. INTRODUCTION 

The cheque collection policy of the bank is a reflection of our on-going efforts to provide better
service to our Customers and set higher standards for performance. The policy is based on
principles of transparency and fairness in treatment of the customers. This policy document
covers the following aspects.

2. ARRANGEMENTS FOR COLLECTION 

2.1 : Local Cheques: 

a. All cheques and other negotiable instruments payable locally would be presented through the
clearing system prevailing at the centre. Cheques deposited at branch counters, Post, Courier and
in collection boxes within the branch premises before the specified cut off time will be presented
for clearing on the same day. Cheques deposited after the cut-off time and in collection boxes
outside the branch premises including offsite ATM (after introduction of the facility) will be
presented in the next clearing cycle. As a policy, bank would give credit to the customer's
account on the same day clearing settlement takes place. Withdrawal of amounts so credited
would be permitted as per the cheque return schedule of the clearing house and wherever
applicable facility of high value clearing (same day credit) will be extended to customers.

b. Bank branches situated at Centres where no clearing house exists, would present local cheques
on drawee bank across the counter and it would be the bank's endeavour to credit the proceeds at
the earliest.

c. Our bank branches will display the cut off time up to which the cheques received will be sent for
clearing on the same day including those cheques dropped in the cheque collection box provided

21
 inside the branch premises.

d. As the cut off time limit for acceptance of cheques for collection depends on the clearing cycle
of the respective centre, cut off time limit at each centre will be fixed, depending on the clearing
arrangement at that place and the same will be displayed at the branches.
(Circles are advised to fix a cut off time limit at each centre depending on the clearing
arrangement at that place and advise their branches to display the same in their branches -
Approved by Board vide SPDW CSS BD 19 2010 USB dt. 12/03/2010) 

e. Bank shall permit usage of the shadow credit afforded to the customers’ account immediately
after closure of relative return clearing and in any case, withdrawal shall be allowed on the same
day or maximum within an hour of the commencement of business on the next working day,
subject to usual safeguards. 

f. Issue of multicity/payable at all branches cheques by CBS enabled banks:

Considering the availability of processing infrastructure for clearing outstation cheques at all
clearing locations across the country and to bring about further efficiency in cheque clearing,
bank shall issue only “payable at par/multi-city” CTS 2010 standard cheques to all eligible
customers Since such cheques (payable at par) are cleared as local cheques in clearing houses,
customers shall not be levied extra charges.”

g. 2.1(g) I. Cheque return charges shall be levied only in cases where the customer is at fault and is
responsible for such returns. An illustrative, list of returns, where the customers are not at fault
are indicated in the annexure.

h. 2.1 (g) II. Cheques that need to be re-presented without any recourse to the payee, shall be made
in the immediate next presentation clearing not later than 24 hours (excluding holidays) with due
notification to the customers of such re-presentation through SMS alert, email etc., 

i.
j.
k.
l.

m. 2.2: Outstation cheques : 

22
 Cheques drawn on other Banks at outstation centres will be normally collected through our
bank's branches/ offices at these centres. Where our Bank does not have a branch of our own, the
instruments would be preferably collected through any branch of Public Sector Bank other than
the drawee bank at that place, if there is no branch of public sector bank, through any scheduled
bank or branch of any bank at that place. In the absence of the above, the cheque would be sent
directly to the drawee bank. The bank would also use the National Clearing Service offered by
the Reserve Bank of India at centres where such collection services exists. 

Cheques drawn on bank's own branches at outstation Centres will be collected using the inter-
branch arrangements in vogue. Branches connected through central processing arrangements
shall provide same day credit to its customers in respect of outstation instruments drawn on any
of its branches in the CBS network.

Credits in respect of cheques drawn between bank's own Core Banking Branches will be done on
the same day on receipt of the cheque subject to availability of connectivity between the
branches. In case of other Banks where core banking is enabled, cheques with stipulation of
payment at par at all its Core Banking Branches are presented to the local branch / clearing
section of the said bank, else the cheque will be sent for collection to the mentioned drawee bank
branch. 

2.2.1 : Speed Clearing: 

Speed Clearing facility has been introduced at the MICR centers implemented by RBI, for the
outstation cheques accepted for collection drawn on other Banks having CBS inscription on the
face of the Cheque / CBS unique Account Number. 

Outstation cheques drawn on Banks participating in Speed clearing at specified locations will be
collected and treated at par as if they were local cheques. All terms and conditions applicable for
local clearing instruments will also apply to Speed Clearing. However, the charges for collection
of speed clearing cheques, shall be applicable as prescribed by the Bank from time to time. 

23
2.3 : Immediate Credit of Local/ Outstation Cheque/ Instruments & Payment of

Interest on Delayed Collection: 

n. The details of the facility are as under

Eligible Persons : Individuals / joint SB / CA holders and retired employees of our Bank
provided –

o The conduct of the account is satisfactory for at least 6 months.

o The Bank has not noticed any irregular dealings in the account.

o No cheques / instruments for which immediate credit was afforded returned unpaid for
financial reasons.

o The bank has not experienced any difficulty in recovering any amount advanced in the
past including cheques returned after immediate credit.

Ineligible Persons:

o Minors' account whether individually, jointly or represented by natural guardian. 

o Non Residents

o Employees (Both Officers and Workmen) of our Bank

o Self cheques, endorsed cheques and Exchange Company cheques.

Eligible Amount :

o Not exceeding Rs.15000/- in respect of outstation cheques to all the eligible account

24
 holders without any specific request from the account holder.

o In respect of local cheques immediate credit of Rs.15000/- will be extended only to those
eligible account holder on specific request.

It will be extended in case of dividend warrants / Interest Warrants to all the eligible account
holders provided they are drawn on banks and payable on demand without any pre-condition.

TERMS & CONDITIONS:

i. Affording immediate credit is restricted to an amount not exceeding Rs.15000/- per

eligible account holder. If the eligible account holder has already been provided with the
facility for an amount less than Rs.15000/- (i.e. maximum admissible amount) branch will
consider affording further credit within the overall ceiling of Rs.15000/- provided the
eligible account holder tenders the cheque. At any point of time the amount of immediate
credit shall not exceed Rs.15000/- per eligible account holder.

ii. Individual cheques/Dividend warrants/Interest warrants (both Local and Outstation) for
amounts exceeding Rs.15000/- are not eligible under the scheme for affording immediate
credit.

iii. Facilities extended in all the branches excepting in certain specialized branches. In such
cases, extending further continuation of the facility is sole discretion of the bank.

iv. In case the cheque is returned unpaid, interest is chargeable from the date of return of
such a cheque till the recovery of the amount thereof. The rate of interest shall be charged
as under:
 Where the party to whom such immediate credit has been given -

1. Is enjoying / having Appropriate rate of interest after determining the size of the limit
other limits / liabilities duly aggregating other limits/liabilities permitted/outstanding.
2. Is not enjoying any Rate of interest as applicable to loans/ advances up to Rs.2 lacs as
other limit / liabilities advised from time to time.

25
 v.

vi. Appropriate commission and postage shall be collected.

2.4 : Purchase of local / outstation cheques:

Bank may at its discretion, purchase local / outstation cheque tendered for collection at their
specific request of the customer or as per prior arrangement. Besides satisfactory conduct of
account, the standing of drawer of the cheque will also be a factor considered while purchasing the
cheque.

3. Time frame for collection of local / outstation cheques / instruments:

1. For local cheques presented in clearing credit will be afforded as on the date of settlement of funds
in clearing and the account holder will be allowed to withdraw funds as per clearing norms in
vogue.

2. Cheques / instruments presented in high value clearing (with the minimum value of ` 1 lac) shall
be credited on the same day (applicable only in areas covered by high value / same day clearing).

3. For cheques and other instruments sent for collection to centers within the country the following
time norms shall be applied;
a. Cheques presented at any of the four major Metro centers (New Delhi, Mumbai, Kolkata
and Chennai) and payable at any of the other three centers, maximum period of 7 days.

b. Metro Centres and State capitals (other than those of North Eastern States and Sikkim)
maximum period of 10 days.

c. In all other centers, maximum period of 14 days. 

d. Cheques drawn on foreign countries:-

Such instruments are accepted for collection on the "best of efforts" basis. The Bank is committed
to ensuring that instruments drawn in foreign currencies and payable outside India are collected in
the quickest and most efficient manner. Towards this the bank may enter into specific collection
arrangements with its correspondent banks in those countries for speedy collection of such

26
 instrument(s). Bank would give credit to the party upon realization credit of proceeds into the
bank's Nostro Account with the correspondent bank after taking into account cooling periods as
applicable to the countries concerned.

The above time norms are applicable irrespective of whether cheques/ instruments are drawn the
bank's own branches or branches of other banks.

4. Payment of interest on delayed collection of Outstation Cheques:

As part of the compensation policy of the bank, the bank will pay interest to the customers on the
amount of the collection instruments in case there is delay in giving credit beyond the time period
mentioned above. Such interest shall be paid without any demand from customers in all types of
accounts. There shall be no distinction between instruments drawn on the banks own branches or
another banks for the purpose of payment of interest on delayed collection
 .Interest for delayed collection shall be paid at the following rates:

 Savings Bank rate for the period of delay beyond 7/10/14 days as the case may be in collection of
outstation cheques.

 Where the delay is beyond 14 days interest will be paid at the rate applicable to for term deposit
for respective period.

 In the case of extraordinary delay i.e. delays exceeding 90 days, interest will be paid at the rate of
2% above the corresponding Term deposit rate.

 In the event the proceeds of cheque under collection was to be credited to an overdraft/loan
amount of the customer, interest will be paid at the rate applicable to loan account. For
extraordinary delays, interest will be paid at the rate of 2% above the rate applicable to the loan
account.

27
It may be noted that interest payment as given above would be applicable only for instruments sent for
collection within india.

Note:

1. Interest payment as above would be applicable only for instruments sent for collection within
India.

2. The payment of interest for the delay in collection of outstation instruments are not applicable to
non-negotiable instruments viz. Prize winning lottery tickets and proceeds of matured Deposit
receipts of other banks, etc.

5. Cheques/Instruments lost in transit/in clearing process or at paying banks' branch:  

In the event a cheque or an instrument accepted for collection is lost in transit or in the clearing process or
at the paying bank's branch, the bank shall immediately on coming to know of the loss, bring the same to
the notice of the account holder so that the account holder can inform the drawer to record stop payment
and also take care that cheques, if any, issued by him / her are not dishonoured due to non-credit of the
amount of the lost cheques / instruments. The bank would provide all assistance to the customers to obtain
a duplicate instrument from the drawer of the cheque. In line with the compensation policy of the Bank,
the Bank will compensate the account holder in respect of instruments lost in transit in the following way;

i. In case intimation regarding loss of instruments is conveyed to the customer beyond the time limit
stipulated for collection (7/10/14 days as the case may be) interest will be paid for the period
exceeding the stipulated collection period at the rates specified above. 

ii. In addition, bank will pay interest on the amount of the cheque for a further period of 15 days at
Savings Bank rate to provide for likely further delay in obtaining duplicate cheque / instrument
and collection thereof.

28
 iii. The bank would also compensate the customer for any reasonable charges he / she incurs in
getting duplicate cheque / instruments upon production of receipt in the event the instrument is to
be obtained from a bank / institution who would charge fee for issue of duplicate instrument and
also reasonable charges incurred for stopping payment of the cheque.

5.1 : Receiving payment based on an electronic image of a truncated cheque:

i. a. Cheque truncation system- Sec 131 of Negotiable Instrument Act 1881(amendments) 

ii. b. Onus of due diligence shifted to the presenting bank in CTS environment

Cheque truncation is the process of eliminating the flow of physical cheque issued by a drawer to the
Drawee branch. The physical cheque will be truncated and electronic image of the cheque are captured for
processing. The physical cheques are retained at the presenting bank itself. The captured image along with
data are exchanged across the banks.
.

Legal status of the cheque truncation is derived from amendments made to the Negotiable Instrument Act,
1881 by virtue of Negotiable Instruments (Ammendments and Miscellaneous Provision) Act,2002 where
by among others the section 6,64,81,89 and 131 of the NI Act,1881 are also suitably amended to
incorporate the validity of the truncated image of the cheque. We invite the attention to the amendment to
section 131 where in the existing explanation is renumbered as explanation 1 and the following
explanation is inserted.

Explanation II-It shall be the duty of the banker who receives payment based on an electronic image of a
truncated cheque held with him, to verify the prima facie genuineness of the cheque to be truncated and
any fraud, forgery or tampering apparent on the face of the instrument that can be verified with due
diligence and ordinary care

29
.

In view of the above amendment, the presenting bank takes responsibility for exercise of due diligence.
The branches while sending cheques to CTS scaning centre should ensure the following

 To exercise due diligence on all instruments

 To cheque the apparent tenor of the instruments
 To ensure verification under Ultra Violet Lamp (UVL)
To scrutinize the cheques for material alteration
 To ensure genuineness and validity of instruments
 To ensure that pay in slip is properly filled up with 13 digit correct account number and name

The scanning centre while scanning the instruments should inter alia also ensure the following

 To check the apparent tenor and genuineness of the instruments

 To ensure verification of instruments under UV Lamp
 To ensure instrument confirms to features of CTS 2010 standard
 To ensure physical feel of the instrument meets the usual paper standard used for cheque
 To ensure no material alteration visible to naked eye

1. Force Majeure
The bank shall not be liable to compensate customers for delayed credit due to some
unforeseen event (including but limited to civil commotion, sabotage, lockout, strike and
other labour disturbances, accidents, fires, natural disasters or other "Acts of God", war,
damage to the banks' facilities or of its correspondent Banks) absence of the usual means of
communication or all types of transportation, etc beyond the control of the Bank prevents it
from performing its obligation within the specified service delivery parameters.

30
6.Charging of Interest on cheques returned unpaid where Instant Credit was
given:
If a cheque sent for collection for which immediate credit was provided by the Bank is returned
unpaid, the value of the cheque will be immediately debited to the account. The customer will not
be charged any interest from the date immediate credit was given to the date of return of the
instrument unless the bank had remained out of funds on account of withdrawal of funds. Interest
where applicable would be charged on the notional overdrawn balances in the account had credit
not been given initially.
. 
If the proceeds of the cheque were credited to the Savings Bank Account and were not withdrawn,
the amount so credited will not qualify for payment of interest when the cheque is returned unpaid.
If proceeds were credited to an overdraft/loan account, interest shall be recovered at the rate of 2%
above the interest rate applicable to the overdraft/loan from the date of credit to the date of reversal
of the entry if the cheque/instrument was returned unpaid to the extent the bank was out of funds. 

7. Cheque payable in foreign countries :

 Cheques payable at foreign centers where the bank has branch operations will be collected
through that office. The services of correspondent banks will be utilized in country/centers where
the correspondent has presence. Cheques drawn on foreign banks at centers where the bank or its
correspondents do not have direct presence will be sent direct to the drawee bank with instructions
to credit proceeds to the respective Nostro Account of the bank maintained with one of the
correspondent banks.

7.1 Collection of USD Denominated Clean Instruments : 

Introduction:

Clean instruments denominated in currencies other than Indian Rupees such as Euro, Pound
Sterling, US Dollar, Yen, etc., are called foreign currency cheques/clean instruments. Since such

31
instruments are not payable in India they are, therefore, required to be sent to the country
concerned for realization of proceeds. The time norms for collection and return of the instruments
vary from country to country and place to place within a country. 

Clean instruments / Cheques payable at foreign centers where our bank has branch operations (or
banking operations through a subsidiary, etc.) will be collected generally through that
office/branch. The services of correspondent banks will be utilized in country/centers where the
correspondent has a presence. Cheques drawn on foreign banks at centers where the bank or its
correspondents do not have direct presence will be sent direct to the drawee bank with instructions
to credit proceeds to the Nostro Account of the bank maintained with one of the correspondent
banks. 

The clean instruments denominated in USD and payable in USA are generally known as USD
denominated cheques/instruments.
.

i) Type of Instruments

Clean instruments like personal cheques, Travelers cheques, Demand Drafts, Cashier orders, Pay
Orders, Bankers' cheques, International Money Orders or any other such instruments, payable
abroad may be submitted for collecting the proceeds of the instrument.

ii) Risk perceived in collection of USD Denominated Instruments : 

As per US Laws materially altered cheques, where the beneficiary's name has been changed and/or
the amount of the cheques raised, the drawee bank is obliged to reimburse the drawer within 12
months for wrongfully paying the cheque.
 
In such cases the Correspondent Bank mandatorily claim the amount from us and debit Nostro
account. Hence, the proceeds of the clean instruments credited to customer's account are subject to
right to debit in case of return of instruments.

32
 .

iii) Products offered by us for USD denominated instruments : 

a. Secured Collections Service : 

 Under this facility the risks mentioned above can be mitigated.

 Under this facility, our correspondent bank provides guaranteed final credit without recourse
within a confirmed time period.
 For such facility our correspondent bank, charges additional service charges for giving credit
without recourse.
 Time period for collection of the proceeds are as under:

a If the cheque/instrument is Six business days after receipt of Correspondent

drawn on bank located in cheque/instrument at Correspondent bank charges
New York bank's processing center at New York
b If the cheque/instrument is Fifteen business days after receipt of Correspondent
drawn on bank located cheque/instrument at Correspondent bank charges
outside New York bank's processing center at New York


 Amount of the cheque should not exceed USD300, 000.

 Traveler Cheques/Treasury cheques/postal money order is not covered under this facility.
 All the clean instruments/cheques lodged by customers for amounts USD 5000 and above, have to
be necessarily collected under this facility.
 It takes approximately between 10 to 18 days for affording the credit to the customer's account.

b. Cash Letter Service : 

 It is recommended that all the clean instruments drawn in USD & payable in USA be collected
under 'Secured Collections Service', to enable the customers to get a final credit instead of a

33
 conditional credit.
 For USD denominated clean instruments for amounts up to USD 5000, the customers have the
option of collecting the proceeds under Cash Letter Service.
 As per this facility our correspondent gives credit to our Nostro account on sending the cheques in
clearing system. However, the conditional credit is given to the customer's account only after the
expiry of the cooling period.
 Approximate time period for collecting the proceeds of the cheque

a If the instrument/cheque is drawn on Six business days from the value date for the
bank located in New York instrument/cheques payable at New York
b If the instrument/ cheque is drawn 10 business days from the value date for
on bank located outside New York instrument/cheques payable outside New York but
within USA

 It approximately takes around 15 days for affording the credit to the customer's account.

c. Instant Credit : 

 Subject to the satisfactory track record of the customer etc, the credit may be given to the
customer's account, with out completion of the cooling period, on citing the pass sheet credit for
clean instruments denominated in USD up to USD 5000, sent under the facility of Cash Letter
Service.

IV) Compensation : 

34
  Customers would be compensated for delay in crediting the proceeds of foreign currency
instruments payable abroad / in India and sent on collection basis.
 Such compensation would be paid at the rate of interest applicable to NRE SB accounts in respect
of NRI-clients and domestic SB account in the case of resident-customers, for the delays beyond
prescribed period for various transactions which are as under:
a. Personal cheques/drafts payable in the country of currency – if proceeds are not credited
within 21 days.
b. Personal cheques / drafts payable in the country other than in the currency of the country –
If proceeds are not credited within 45 days

7.2 POLICY ON COLLECTION OF CHEQUES DENOMINATED IN

FOREIGN CURRENCY OTHERN THAN USD.

1. Collection of instruments drawn in Home Currencies of the Drawee Centre (other

than US Dollar):
The instruments payable at the country of its currency i.e. like GBP instruments payable in UK is sent to
the Nostro Correspondent Bank at the drawee centre for collection of the same. As per this arrangement,
the amount of the instrument is credited to our Nostro account immediately upon its presentation for
payment to drawee bank by the Correspondent Bank, through clearing or collection. Though amount is
credited to our Nostro account, immediately the same is only on conditional basis and not a final credit.
Such instruments are treated as realized, only upon completion of the prescribed waiting period, as the
paying bank has a time limit for returning the instrument for reasons like insufficiency of funds in the
drawer's account, forged instruments, etc.
.
2. If the instruments are returned for any reason, the Correspondent Bank will debit the account with back
value [i.e., the same value date as the original pass sheet credit] and additional charges for returning the
instrument unpaid. In order to safeguard, the waiting period concept is followed. Accordingly the

35
instrument is treated as realized only after expiry of waiting period after the date of pass sheet credit entry
and adjust the realization after this waiting period. This waiting period varies from country to country and
where the instrument is payable which is as under.

Waiting Period:
GBP instruments payable in UK 10 business days from
the value date
EURO instruments payable in Germany/Italy/ France/Netherlands 21 business days from
the value date
Instruments in all other currencies payable at the Centres whose 22 days from the value
home currency is the currency of the instrument. date

3. Handling Instruments Drawn on EURO Land:

a. Cheques denominated in EURO currency and payable in Germany, Italy, Netherlands and France
will be handled under Cash Letter Service.
b. Each instrument including TCs, irrespective of its denomination, will be levied charges of EURO
1.00 per instrument for handling under Cash Letter Service.
c. EURO cheques drawn on other countries will be handled only under 'under collection' basis.
d. Cheques sent under collection normally take around 30 to 45 days for realization and charges are
likely to be around EURO 50 per instrument.
e. Unlike USD Cash Letter Service System, the Banks in Euro Land do not undertake 'no return-
guaranteed payment' after a specified period. Hence cheques beyond EURO 5000 are not handled
under 'Cash Letter Service' and the same are handled only under collection basis.
f. Endorsement by payee on the back of the cheque in the space provided is one of the conditions for
collection of Euro cheques.

4.Instant Credit.
Subject to the satisfactory track record of the customer etc, immediate credit may be given to the

36
 customer's account, without completion of the cooling period, on citing the pass sheet credit for
clean instruments denominated in GBP and EURO up to the equivalent of USD 10000.

Service Charges:
For all collection services the Bank will recover appropriate Service Charges as decided by the
Bank from time to time and communicated to customer as displayed in the notice board of
branches and indicated in the BCSBI codes (item no. 3.4 – tariff schedule) and adopted by the
bank.

 Illustrative list of objections where customers are not at fault 

Code Reason for Return
No
33 Instrument mutilated; requires bank’s guarantee
35 Clearing House stamp / date required
36 Wrongly delivered / not drawn on us
37 Present in proper zone
38 Instrument contains extraneous matter
39 Image not clear; present again with paper
40 Present with document
41 Item listed twice
42 Paper not received
60 Crossed to two banks
61 Crossing stamp not cancelled
62 Clearing stamp not cancelled
63 Instrument specially crossed to another bank
67 Payee’s endorsement irregular / requires collecting bank’s confirmation
68 Endorsement by mark / thumb impression requires attestation by Magistrate with
seal
70 Advice not received
71 Amount / name differs on advice
72 Drawee bank’s fund with sponsor bank insufficient (applicable to sub-members)
73 Payee’s separate discharge to bank required
74 Not payable till 1st proximo

37
 75 Pay order requires counter signature
76 Required information not legible / correct
80 Bank’s certificate ambiguous / incomplete / required
81 Draft lost by issuing office; confirmation required from issuing office
82 Bank / branch blocked
83 Digital certificate validation failure
84 Other reasons – connectivity failure
87 ‘Payee’s account credited’ – Stamp required
92 Bank excluded

Chapter 3

REVIEW OF LITERATURE:

Ali Ataullah (2004) Concluded that there is still room for improvement in the efficiency of banks in both the countries. A
step forward for the liberalization programmer , therefore, is not only to deregulate interest rates and enhance the level
of competition but also to strengthen the instutional structure to support good practices in the banking industry .

38
Gupta Sumeet & VermaRenu (2008) concluded that management of non-performing assets and risk emanating from
adverse event is the key to higher profitability of the Indian banking. Transparency and good governance would work as
principal guiding force in present scenario.

Ghosh Saibal (2009) concluded that with international standards, Indian banks would need to improve their
technological orientation and expand the possibilities for augmenting their financial activities in order to improve their
profit efficiency in the near future.

Dr. Ibrahim Syed M (2011) concluded that this is diagnostic and exploratory in nature and makes use secondary data.
The study finds and concludes that the scheduled commercial banks in India have significantly improved their
operational performance.

Dr. Pardhan Kumar Tanmaya (2012) Concluded that-The study is based on primary data. The data has been analyzed by
Percentage method. The tool used to collect data from the bank officials was a structured questionnaire. Responses
obtained from the 50 Bank managers / senior officers.

Dr. Dhanabhakyam M &Kavitha M. (2012) studied that banks have to re-orient their strategies in the light of their own
strength and the kind of market in which their likely to operate on. In the perspective of this domestic and international
development, the banking sector has to chart perfect for development.

Gupta Shipra (2012) concluded that- Public and Private sector banks both are giving good service in India .Financial
condition of any bank is measured by the help of financial ratio. A leverage ratio cannot do the job alone it needs to be
complemented by other prudential tools or measures to ensure a comprehensive picture of the buildup of leverage in
individual banks or banking groups as well as in the financial system.

Sharma Esha (2012) concluded that- The liberalized policy of the govt. of India permitted entry to the ICICI in the
banking; the industry has witnessed a generation of private players. That’s why the present paper special emphasis has
been laid down on the financial analysis of the bank by using different research ant statistical tools.

GejalakshamiSandanam& et.al (2012) , Cocluded that the public sector banks performed remarkably well during the
period than that of the private sector banks the overall regression analysis show that the financial performance of the
banking industries strongly .

GoelCheenu&RekhiBhutaniChitwan (2013) concluded that the analysis supports that new banks are more efficient than
old ones. The public sector banks are as not profitable as other sectors are. It means that efficiency and profitability are
inter related.

Davda V. Nishit (2012) Concluded that a review of fundamental analysis research in accounting the paper has outlined
the development of different accounting valuation model and reviewed related emperical work .

Dr. KoundalVirender (2012) concluded that although various Reforms have produced favorable effects on commercial
banks in India and because of this transformation is taking place almost in all categories of the banks.

39
 Sai Naga Radha V & et.al. (2013) concluded that net profit margin, operating profit margin, return on capital employed,
return on equity and debt equity ratio there is no significant difference in these ratios before after merger. Significant
difference with respect to gross profit margin.

Mishra Kumar Aswini& et.al. (2013) Concluded that DEA provide significant insights on efficiency of different banks and
places private sector ones at an advantage situation and there by hints out the possibility of further improvisation of
most of the public sector banks.

Kamraj K. &Somu A. (2013) Conclude that Indian overseas bank is one of the oldest nationalized commercial banks in
India. Banking industry is an indicator of for many development activities in the nation. Indian overseas bank has higher
potential to provide better and quality services to the billions of people in India.

Samir &KamraDeepa (2013) Concluded that this analysis the position of NPAs in selected banks SBI, PNB & Central bank
of India. It also highlights the policies pursued by the banks to tackle the NPAs and suggest a multi-pronged strategy for
speedy recovery of NPAs in banking sector.

SelvamPaneer& et.al. (2013) Concluded that-The Present study was aimed to analyze the financial assistance of
nationalized bank in India .To identify the relative performance of the operational variables the linear and compound
growth rates have been calculated . The performance of nationalized banks followed by private sector banks is found to
be higher when compared to SBI and its associates and Foreign Banks.

Dr. Gupta R. & Dr. Shikarwar N.S. (2013) Concluded that the banking industry occupies a unique place in a nation’s
economy. A well-developed banking system is a necessary precondition of economic development in a modern economy
.the main parameters of growth in banks are net profit growth , net assets growth , EPS growth and Reserve and surplus
growth and the results reveal that in terms of the parameters defined key words : net assets ,EPS , reserves ,surplus
growth .

Desrani R Hiralal (2013) Concluded that scheduled bank has wide scope in India. It is providing loans to various
industries, business mans, small scale sector industries. It is very helpful to all people who want loan.

BansalRohit (2014) Concluded that Federal has best price earnings ratio among other banks. The total assets turnover
ratio of federal bank shows that it keeps significantly highly assets to meet the debt. Overall Federal bank is the most
financially stable company in comparison to others.

Dr. Tamilarasu A. (2014) concluded that mere opening of no-frill bank account is not the purpose or the end of financial
inclusion while formal financial institution must gain the trust and goodwill of the poor through developing strong
linkages with community based financial ventures and coopratives.

Dr. ShuklaSmita&MalusareRakesh Studied that this evaluates the changes in the capital structure and solvency position
of banks by using various risk indicators for highlighting risk profile of Indian Bank entities . This evaluates risk profile of
ten public and private sector banks.

YeboahSebe Gilbert &Mensah Charles (2014) concluded that ADB’s focus on agriculture financing is diminishing since a
sector analysis of loans and advance indicates that agriculture sector lost its first position to service sector. The Bank’s
liquidity showed a downward and slipped trend. Ms. Gupta Shikha (2014) Concluded that it focused on operational

40
control, profitability and solvency etc. It aimed to analyze and compare the financial performance of ICICI banks and
offer suggestion for improvement of efficiency in the bank.

Gaur Arti&Arora Nancy (2014) Concluded that it study about the causes and consequences of the various component of
the financial statement in relation to the profitability of the bank. We analyzed the financial stability and overall
performance of SBI and study profitability of SBI.

V. Naseer Abdul (2014) Studied that – Study compares the financial performance and employee efficiency of Indian
banks during 2007-2013. Both the financial performance and employee efficiency of foreign banks working in India are
better than domestic banks and private sector banks performance are better than the public sector banks. It is noted
that the public sector bank performance are more stable when compared to the private sector banks.

Sharma Pooja&Hemlata (2014) Concluded that - The banking mirrors the larger economy its linkages to all sector make
it proxy for what is happening in the economy as a whole. Banking plays a silent yet crucial role in our day to day
economy. The data is taken from financial reports of both the banks for last five years ranging from 2008-09 to 2013-13.
The results depicts that ICICI Bank is performing better than SBI Bank as it is Able to generate more loans from its
deposits to the customers.

Soni Kumar Anil &KapreAbhay, Regional rural bank play a vital role in the agriculture and rural development of India.
The Study Is diagnostic and exploratory in nature and makes use of secondary data. The study finds and concludes that
performance of RRBs has significantly improved.

VarathanSathiya& el.at. Concluded that- In canara bank the credit appraisal is done by the study involves the evaluation
in management, technical feasibility, financial viability, Risk analysis and credit rating. This shows canara bank has sound
system for credit appraisal. The credit appraisal Process carried out at canara bank has good parameters to appraise.

Dr. RaoMadhusudhana K. (2014) Concluded that – with respect to the banking activities the performance of HDFC is
better than the SBI and for the investor who are intended for long term investment & risk takers HDFC is better but with
respect to the growth in the market for the company price SBI is better. SBI shares value market more than HDFC.

Patel S Vijay & et.al. Concluded that information has its own value but if someone wants to have better judgment of the
concern he has to analyze them. This provides guideline about analysis of profitability ratio of krishakbharati bank.

Gul Shah & et.al. (2014) concluded that the study has it limitation in term of selection of banks. The present research
work serve as a guideline to public sector banks to look up the financial performance and make superior allocation for
improving efficiency for the coming time.

ThakarshibhaiChiragLoryia (2014) Concluded that it attempt to analyze profitability of selected public and private sector
banks in India. This study which looks into three key factors which affect the profitability analysis of Indian banking
sector using mean, standard deviation, and ANOVA model.

Movalia P. Nilesh&et.al (2014) Concluded that Public sector banks is quite good compared to private sector banks in the
area of profitability debt equity , earning per share found that price earning ration of private sector banks is high
compare to public sector banks.

41
 3.2 CREDIT MANAGEMENT UNDER WORKING CAPITAL

NATURE OF THE BUSINESS CARRIED:

 
Canara Bank group’s principal activities are to provide a full range of Bankingand other financial services
through 2,578 Branch Offices in India and Abroad. Theservice includes accepting deposits,
commercial and institutional credit, treasury,investment, risk management and other related financial
services. It operates throughtwo segments. Banking operations consist of corporate Banking.
Retail Banking, personal and commercial Banking, Cash management services, Deposits and
other allied services. Treasury operations consist of dealing in SLR and Non-SLR securitiesand Money Market
operation

3.3 DEPOSIT SCHEMES GIVEN BY CANARA BANK

1.SAVING DEPOSIT
Saving deposit is available  to all individuals,  non trading organisations,  permitted institutions,
etc. Minimum balance can be fixed as per requirements.

2.CURRENT DEPOSITS

42
It is a perfect account to do business operations. It is available to traders,  businessmen, and
corporate bodies etc. who operate the account frequently. Bank  given all facilities like, pass book, pass
sheet, standing instructions, cheque collection.

3.FIXED DEPOSIT
It is a safe way to solid returns method. Minimum deposit should be Rs.1000/- and
Maximum no ceiling. Period deposit is given minimum 15 days and maximum 120 months, 7-14
days period for deposit of 5 lakh and above. Interest should be pay monthly, quarterly, half-yearly or
annual intervals at depositor’s choice.

4.KAMADHENU DEPOSIT
It is high returns deposit scheme interest will be compounded every quarter. Fixed deposit should be
deposit minimum of Rs. 1000 and maximum-no ceiling.

5.CANBANK AUTO RENEWAL DEPOSIT (Card)

Canara Bank is giving high returns in shorter terms through CANBANK  AUTO RENEWAL
DEPOSIT scheme. It is an auto renewal system, card has built-infeatures for automatic renewal of these
deposits, with or without interest accrued.

6.CANFLEXI DEPOSIT
It is a combination  of Savings  Account and Fixed  Deposit,  CANFLEXIenables customers to earn
maximum interest.

7.ASHRAYA DEPOSIT
This scheme is available to all individuals. Who have completed the age of 60years and above, in single or joint
names.

8.RECURRING DEPOSIT
It is monthly deposit minimum to Bank Rs. 50/- per month. Interest will be compounded every quarter.

43
9.CANSARAL  SAVINGS ACCOUNT
This Savings Account scheme is available to every common man. Its initialdeposits Rs. 25/-  Account
can be maintained even with zero balance. Here Bank hasnot restriction on number of credits, and
Bank will give free ATM-cum-Debit Cardfacility.

10.CAN-TAX SAVER DEPOSIT

It is a safe way to solid returns. A term deposit scheme under the Fixed Deposit and
Kamadhenu streams of the Bank. The benefit of Deduction is get from income upto Rs. 1 lakh under
sec.80C of the INCOME TAX Act1961, for individualsonly.

11.CANRELAX
Deposit under the scheme can be opened by individuals. Minimum depositamount  Rs.1,00,000/-
and in the multiples of Rs.10,000/- thereafter. Rate of interestwill be given of interest 0.50% over the
rate applicable

3.4 PRODUCT/SERVICE PROFILE OF CANARA BANK RETAIL

PRODUCTS:

1.CANARA BUDGET PERSONAL LOAN

C a n   b u d g e t   p e r s o n a l   l o a n   i s   t o   f u l f i l   o n l y   p e r s o n a l   n e e d s   o f   s a l a r i e d employees
.   T h i s   l o a n   f a c i l i t y   i s   a v a i l a b l e   t o   a n y   C e n t r a l / S t a t e   G o v e r n m e n t Employees,
Lecturers/professors of colleges/universities/research institution.

2.HOME IMPROVEMENT LOAN

Home Improvement loan is available to who already own homes. Loan will begiving to house hold furniture
items, air conditioners, wardrobes, kitchen cabins etc.Loan is available along with a housing loan or even
independently.

3CANARA MOBILE VEHICLE LOAN

Can Mobile vehicle loan is available to purchase any vehicle. It may be new vehicle or a used vehicle.
Repayment period is given to four wheelers up to 84 monthsand two wheelers upto 60 months.

44
4.CANARA TECH
CANTECH loan facility is available only to IT/BT professional’s loans upto 6months gross salary with a
maximum of Rs. 2 lakh. Higher quantum considered selectively. Repayment period is given up to 56
months.5.
 
5.CANARA TRAVEL
CANTRAVEL loan scheme is available to travel in India or abroad.6.

6.CANARA RENT
CANRENT loan is available to who are owners of the property to meet their   business and personal
needs.7.

7.CANARA MAHILA
This is an exclusive loan scheme for women who are working and non working  persons are able
to get loan and fulfil their personal financial needs.

8.DOCTORS CHOICE
Doctor’s choice loan scheme is to fulfil the Doctor working capital and term loan requirements. Loan is
available only to qualified registered medical practitioners.

9.CANARA JEWEL PERSONAL LOAN

CPL is to fulfil the expenses of marriage and jewellery expenses.

10.HOUSING LOAN
Loan is available to purchase of ready built house or flat construction of houseor flat purchase of site and
construction there on, repairs and renovation and take over of the liability from other Banks.

11.CANARA SITE
CANSITE loan is available to who are individuals aged upto 55 years of age atthe time availing the loan.
Those people must have above 1 lakh annual income or more eligible.

45
12.CANARA MORTGAGE
This loan scheme is available to against security of mortgage of property (building). Only able to
get Professionals, businessmen, salaried persons/individualsfor meeting genuine needs.

13 TEACHERS LOAN
This loan scheme is to meet the genuine personal needs of teaching or non teaching staff of schools or
colleges.

14. CANARA PENSION

This loan scheme is available to pensioners for drawing their pension throughCanara Bank branches. Loans
are for meeting medical expenses and other genuine personals needs.

15.CANARA TRADE
This Loan scheme is available to Traders, Whole sale and Retail
business,Business Enterprises, Commission Agents, Service sector, Professionals and self employed
persons. It is fulfil the working capital of business.

16.CANCASH
CANCASH will get when we need it without selling our blue chip portfolios,to meet the
investments/domestic/personal needs (not to be utilized for speculative  purposes) quantum upto Rs. 5
lakhs.
17.SWARNA LOAN
SWARNA LOAN is available to any individuals against Gold Jewellery to meet the medical expenses
and other unforeseen commitments/ contingencies etc.

18.EDUCATIONAL LOAN (VIDYASAGAR)

Educational loan is available to who are needy and meritorious students for   pursuing higher
education in India and Abroad, and fulfil for payment of fees to school/college and for purchase of
books, hostel fees, examination fees etc.

46
 3.5 NEW PRODUCTS AND SERVICES

Canara Bank has been introduced several deposit products during Financial Year 2007.
Can Tax saver,a term deposit  scheme,  was introduced  under theKamadhenu and fixed deposit
mode with tax benefit under Section 80C.
CanChamp-an exclusive SB deposit product was launched for aspiring children upto the age of
12y e a r s   f o r   i n c u l c a t i n g   t h e   h a b i t   p f   s a v i n g s ,   a s   w e l l   a s   m a k i n g   t h e m   e l i g i b l e   f o r   educ
ation loans. A term deposit scheme, namely,Canara Centenary Deposit
wasalso introduced during the year, offering attractive rate of interest for the depositors.During the
year, the bank also launched aSB-Gold
deposit scheme, targeting the HNIclients.In the sphere of new loan products, the Bank introduced ‘Kisan
Tatkal’for enabling farmers to meet emergent requirements an‘Kissan Mitra’scheme for funding tenant
farmers.Gramin vikas Vahini,
a vehicle for inclusive growth in ruralareas was also introduced during the year, to promote SME sector, the
Bank launchedSME Gold Card a n d a Term Loan Scheme for reimbursement of their capital
expenditure.

 OWNERSHIP PATTERN
The Canara Bank is Mainly Public company minority of the shares which were held by the
general public, the remaining portion which will invests in the hands of Government of India. Canara Bank
shares are listed at Bangalore, Mumbai and National stock exchanges.

3.6 WORK FLOW MODEL

47
The primary activities are accepting deposits and lending loans and advances. Accepting deposits by way of
savings, Current account, fixed Deposit and Recurring Deposits. The collected money will be safeguarded
according to regulation of
theRBI.Besides these Canara Bank must concentrate  on stationary  control.  Thestationary
includes application Cheque Books, challans and some other stationery. It must maintain a sound control on
these to balance the activities and services. The Circle will report to Head Office in respect of both functional
and administrative matters. The Circle shall handle credit proposals upto the delegated powers
and also handle other general administration and staff matters (including disciplinary matters)as the existing
Circles are doing now. The branches have been provided with adequate operational flexibility and credit
sanctioning powers by the policies/guidelines spelt out by Head
Office.T h e   c i r c l e   i s   f i x e s   w i t h   t a r g e t s   b y   t h e   H e a d   O f f i c e   i n   a l l   b u s i n e s s  p
arameters.And in term the circle has fixed the target to the branches under its administrative
purview. The performance will be reviewed periodically at various forums. Circle office before
distributing target to the branches. They should consider the size of the branches. The service units like
accounts section and currency chests attached to their   base branches and would continue to
function under the same circle as the base  branch circle will report of both functional and
administrative matters. Circle shall handle credit proposal up to the delegated powers and also
handle other general administration and staff matter (including disciplinary matters). With this the
bank will be broadly moving into a three-tier system of administration of operation.
 

 FUTURE GROWTH AND PROSPECTUS

 
The Mysore Canara Bank circle has good scope for lending to agriculture sector and improves
Micro Finance. The District under the circle has large number of self help group and they will avail substantial
credit. Then out of 4 districts 3 districtsare having substantial cultivation.The coffee price is firming up and
improving with this Circle can increase exposure tocoffee. Mysore city has a special economic zone. Few big
industries have already setu p t h e i r u n i t s . H e r e m o r e u n i t s a r e l i k e l y t o c o m e u p w i t h i n f e w
years.Astheinfrastructure  is improving and this will help to circle increasing 

48
 3.7 Competition information

Canara bank’s main competitors are as follows;

1) AXIS BANK-
Axis bank limited , formerly UTI Bank, is a financial services firm that had begun operations in
1994, after the government of India allowed new private banks to be established. The Bank’s
Registered office is at Ahmadabad and its central office is located at Mumbai. Axis Bank one of
the largest private sector financer in India for Agriculture loans.

2) ICICI BANK-
ICICI BANK Limited also known as Industrial Credit and Investment Corporation of India
Bank is a second largest financial service company headquarted at Mumbai. The bank has a
network of 2,533 branches and 6,601 ATM’s in India, and has a presence in 19 countries,
including India. ICICI BANK was established in 1994 by ICICI Limited, an Indian Financial
institution, as a wholly owned subsidiary.

3) KOTAK MAHINDRA-
The KOTAK MAHINDRA group is a financial organization established in 1984 in India. It was
previously known as the Kotak Mahindra Finance Limited, a non banking financial company. In
February 2003, Kotak Mahindra was given a licence to carry a banking business by RBI .
Kotak Mahindra Finanace limited is the first company in the Indian banking history to convert

to a bank. Today it has more than 20,000 employees and Rs. 10,000 crore in revenue.

49
4) STATE BANK OF INDIA-
STATE BANK OF INDIA is the largest Indian banking and the financial service company (by
turnover and total asset) with its headquarter in Mumbai. It is state-owned. SBI provides a range
of banking products through its vast network of branches in India and overseas, including
products aimed at non-resident Indians (NRI). The State Bank Group, with over
16,000branchrs, has the largest banking branch network in India. SBI has 14 local Head Offices
and 57 Zonal offices that are located at important cities throughout the country. It also has
around 130 branches overseas.

5)YES BANK-
YES BANK LIMITED is an Indian Bank, engaged in providing a range of banking and
financial services. The bank’s business segments include Treasury, corporate/wholesale
banking, and retail banking, corporate finance, Transaction banking and a host of other banking
services. It was found by Rana kapoor and his partner (late) Ashok Kapur, with the duo holding
a collection financial stake of 27.16%.

5) INDUSLND BANK-
INDUSLND BANK, which commenced in 1994, cater to the needs of both consumer and
corporate customers. Its technology platform supports multi-channel delivery capabilities. As on
June 30,2013, Induslnd Bank had 530 branches, and 1003, ATM’s spread across 380
geographical locations of the country. The bank also has the representative officers in London
and Dubai. The Bank believes in driving its business through technology. It enjoys clearing
bank status for both major stock exchange- BSE and NSE – and major commodity exchanges
in the country, includes MCX, NCDEX, and NMCE. Induslnd Bank on April 1, 2013 was
includes in the NIFTY 50 benchmark index. Induslnd Bank also offers DP facilities foe stock
and commodity segments.

50
 6) ING VYSYA-
ING VYSYA Bank Ltd. Is a global financial institution od Dutch origin offering banking,
investments, life insurance and retirement services. More than 84,000 ING employees server
over 61 million private, corporate and institutional customers in over 40 countries in Europe,
North America, Latin America, Asia and Australia. We draw on our experience and expertise,
our commitment to excellent service and our global scale to meet the needs of a broad customer
base, comprising individuals, families, small, businesses, large corporations, institutions and
governments.

Chapter 4

4.1 QUESTIONNAIRE:

1) what is the non-performing assests(NPA)of canara bank?

Ans) Asset quality weakened for the quarter as the public sector lender said gross non- performing assest
as a percentage of gross advantages were at 4.27% , increased by 29 basis points quarter-on-quarter and

51
 135 bps year-on-year. Net NPA was also up 16bps sequentially and 59 bps on yearly basis to 2.9% in
quarter gone by the target of the bank is to bring gross NPA below 4% and NPA below 2% by FY16-end.

2) What is the ranking of canara bank among all public sector bank?
Ans) Canara bank is another leading public sector bank and placed at sixty places in the list of top 10
best public sector bank in india 2016.

3) How many branches and ATM’s?

Ans) CanaraBank owns more than 5000 branches in India and 7 overseas branches and 9251 ATM’s .

4) What are the objectives and goals of the Canara Bank?

Ans) Goals : “Growth, innovativeness, high profits as a barometer of efficiency, highly involved employees
distinctly charged with pride.”

Objectives:

1) Growth
2) Innovativeness
3) High profit
4) To provide the standards for performance appraised

OR

VISION : To emerge as a “preferred bank” by pursuing global benchmarks in profitability, operational

efficiency, assest quality, risk management and expanding the global reach.

MISSION: To provide quality banking services with good customer care, create value for all stake holders and
continue as a responsive corporate social citizen.

5) How many employees are there ?

52
Ans: There were 53506 employees in canara bank in 2015

6) What are the products of canara bank ?

Ans: 1- Investment banking

2- Consumer Banking

3- Commercial banking

4- Retail banking

5- Private banking

6- Asset management

7- Pensions

8- Mortages

9- Credit cards

7) Where is the headquarter of canara bank?

Ans: Banglore, Karnataka, India

8) Who are the key people of canara bank ?

Ans: 1> Shri. T.N.Manoharan( chairman)

2> Shri. Rakesh Sharma (MD & CEO)

9) What is the asset under management (AUM)of the bank?

ANS) Canara Robeco mutual fund is a leading asset management company in India that, the joint
venture brings together canara banks experiences in the Indian market been one of the fastest growing
mutual funds in term of AUM.

53
 10)Government is planning to merge all banks to six banks? So what is their opinion on
this ?

Ans: Government may merge 26 public sector banks into just 6 big lenders. The proposal enenvisages
major banks like statebank of india, Punjab national bank, canara bank, union bank, bank of baroda and
bank of india leading the the merge. As a part of proposal, syndicate bank, IOB and UCO bank will be
merge with canara bank

11)How do canara Bank recruit their employees?

Ans: The recruitment of the post of probationary clerks shall be on state – wise / union territory – wise
basis. Candidates can apply for probationary clerk post in one state/ union territory only & have to
appear for the test, from a centre allotted for that particulars state/union territory. On selection,
candidates will placed anywhere in state/union territory depending upon banks need and candidate has to
work in the place of posting for a minimum period of 5 years candidates belonging to reserved
categories, for which no post has been announced, are free to apply against the unreserved post, provided
they will fulfill the elgibilty criteria mentioned.

4.2 SUBSIDIARIES OF CANARA BANK

1) CAN FIN HOMES LTD.-

 
Can Fin Homes Limited was established on 29.10.1987 as a Sponsored Entity of the Bank. Some of
the premier financial institutions such as HDFC and UTI and NHB were the co-promoters of the

54
 Company.

Canara Bank holds 42.38% of equity in the Company. Rest is held by Public and other institutions.

Sri. C Ilango, General Manager of the Bank, is the Managing Director of the Company.

Apart from the Managing Director, the Board of Directors is comprised of top Executives of the
Bank, and also professionals in the field of Accounts/Finance/Banking.

The Registered Office of the Company is at No.29, Sir M N Krishna Rao Park Road, Basavanagudi,
Bangalore 560 004.

The Company has 69 branches spread across the country as at 31/03/13.

Activities :

 The prime objective and activity of the Company is to provide long term finance to individuals for
construction or purchase of residential houses/flats and to Companies or Corporations or Societies or
Associations for the purpose of construction or purchase of residential houses/flats.

 Over the years, the Company has added new products to their range, and value addition is done to the
existing products to keep updated with the changing market scenario and the competition, which is
getting tougher with each passing day. Personal loans to the existing borrowers, loans for purchase of
sites, insurance cover for loanees, etc. are some examples of innovation/value addition.

 The Company also took a major step in diversification by launching three Non-Housing Finance
Products, namely Loan against Commercial Properties (LCP) as well as Rent Receivables (LRR) and
Mortgage loans against house properties.

55
  Bank’s goodwill, the innate strength of the Company and their pragmatic approach and an unflinching
business acumen have always kept the business on a envious platform making good profits and paying
rich dividends ever since inception.

2) CANARA BANK FACTOR LTD.-

Incorporated in 1991 Incorporated in 1991 Canbank Factors Limited is a pioneer in the field of

factoring services in India. It is a subsidiary of Canara Bank, a leading public sector Bank,
known for its diversified and professional services. Andhra Bank and Small Industries
Development Bank of India are the co promoters.

The Registered office is at 67/1, Kanakapura Main Road, Basavanagudi, Banagalore - 4.

The company is now headed by Sri P M G Rajendran Managing Director, senior executive in the
cadre of General Manager in Canara Bank.

The Board of the Company consists of Chairman & Managing Director, Executive Director and a
General Manager of the Bank, apart from the Managing Director. SIDBI and Andhra Bank have
their nominees on the Board. There are 3 non-official Directors from the profession of
Audit/Accounts/Banking/Finance.

Has a network of 12 branches in the country and proposes to add some more during the financial
year. New branches were opened branches at Ahmedabad and Indore recently

Activities :

The main activities of M/s Canbank Factors Ltd are:

56
1.Domestic Factoring

Factoring is a powerful alternative instrument, particularly designed to meet the post sales working capital
requirement of the industrial/trade/service sector. FACTOR fixes a limit for purchase of DEBTS and allows
PREPAYMENT generally upto 80% of the invoice value.

2. Invoice Discounting:

Invoice Discounting is also a variant of factoring. Under this, finance is provided against invoices backed by
LCs of Banks. This will enhance the liquidity and by converting credit sales into cash sales. Rate of discount
and charges are very competitive and in accordance with the market trends.

The company has plans to introduce other variants of Factoring and to improve itâ working efficiency by
Networking of branches with the Registered Office.

 A consistently profit making Company since inception. The company has earned a Profit After tax
of Rs18.61 crs as at 31.03.2013.

 Proposed 20% Dividend for 2012-13..

 CRISIL has given the RATING to the Company.- indicating highest safety for short term debt
programme and Commercial Papers.

 The company has stopped accepting public deposits.

 Has developed a well designed Management Information System (MIS)

 Has developed in-house Internal Risk Evaluation System (IRES).

 Operations are fully computerised from Day one.

57
 3) CANBANK VANTURE CAPITAL FUND LIMITED-
In our economic environment, assistance for establishment of new ventures in the field of
industry is not easily forthcoming. To assist the new ventures, our Bank had formed a Venture
Capital Fund (CVCF) in the year 1989. The Fund is managed by Canbank Venture Capital Fund
Ltd, a wholly owned Subsidiary of Canara Bank.

This is the only Company of its kind sponsored by a Public Sector Bank in the country.

The Registered Office is at No. 14, Naveen Complex, 4th Floor, M G Road, Bangalore 560 001.

Activity:

Trustee and Manager of Canbank Venture Capital Fund (CVCF).

4) CANBANK COMPUTER SERVICE LTD.-

With fast increasing impetus on information technology and extensive use of computers, the Bank found good
opportunity for establishment of a Company, which can develop software and provide consultancy services to
computer users. This thought of the Bank culminated in the establishment of CCSL on 31.08.1994.

The Company is co-promoted by 2 other Public Sector Banks and 2 Private Sector Banks. Canara Bank is
holding 69.14% of the equity of the Company.

The Registered Office is situated at NO. 218, J P Royale, I Floor, 14th Cross, Sampige road, Malleswaram,
Bangalore.

58
Sri M.A.Nayagam, Deputy General Manager of the Bank, is heading the Company as Managing Director.

Apart from the Managing Director, the Board of Directors consists of our Chairman & Managing Director and
Executive Director. There is one Director each from Bank of Baroda, Vijaya Bank Lakshmi Vilas Bank Limited
and Karur Vysya Bank Ltd

Activities :

CCSL designs and develops software for banks, financial institutions and Government Departments, with its
extensive in-house infrastructure and proven technical expertise backed by strong banking domain. All its
Products and Projects are well documented and user-friendly, with on-line help, data encryption and audit
features. CCSL offers services in the following areas:

1. Software Development
2. Business Process Outsourcing
3. Training
4. Web based solution
5. Information Systems Audit, Migration Audit
6. Consultancy Services
7. Pre-shipment & Post-shipment testing of Hardware
8. Software Testing
9. IT Enable services like ATM managed services, Any Time Payment Kiosks etc.,
10. Registrars and Transfer Agents.

5) CANBANK FINANCIAL SERVICE LTD.

This is the first Subsidiary of Canara Bank, established on 01.06.1987 as a Wholly Owned
Subsidiary of the Bank. Canfina was very quick to carve a niche for itself in the Merchant
Banking arena as a premier institution providing a host of financial services under one roof. 

59
 Registered Office of the Company is housed at No.14, Naveen Complex,  6th Floor, M G Road,
Bangalore 560 001.

Sri George Augustin T, Divisional Manager of the Bank, is heading the Company as Executive
Director. 

Activities:

Canfina is presently attending to matters like collection of lease rentals, realization of

investments and follow up of court case.

CONCLUSION

To conclude, let us hope, in the coming years through dedication and hard work the nationalised banks in India
would improve their performance and march towards the achievement of their corporate mission and goals in a better.

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 BIBLOGRAPHY/ WEBILOGRAPHY

www.mu.ac.in.pdf

www.plantemoran.com

www.rbi.org.in

www.encyclopedia

www.google.com

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