financing self help groups of syndicate bank under the concept of micro finance in bangalore...
TRANSCRIPT
INTRODUCTION
1.1 INDUSTRY PROFILE
Banking in India originated in the last decades of the 18th century. The first banks were The
General Bank of India, which started in 1786, and the Bank of Hindustan, both of which are now
defunct. The oldest bank in existence in India is the State Bank of India, which originated in the
Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was
one of the three presidency banks, the other two being the Bank of Bombay and the Bank of
Madras, all three of which were established under charters from the British East India Company.
For many years the Presidency banks acted as quasi-central banks, as did their successors. The
three banks merged in 1925 to form the Imperial Bank of India, which, upon India's
independence, became the State Bank of India.
The first fully Indian owned bank was the Allahabad Bank, established in 1865. When the
American Civil War stopped the supply of cotton to Lancashire from the Confederate States,
promoters opened banks to finance trading in Indian cotton. With large exposure to speculative
ventures, most of the banks opened in India during that period failed. The depositors lost money
and lost interest in keeping deposits with banks. Subsequently, banking in India remained the
exclusive domain of Europeans for next several decades until the beginning of the 20th century.
Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire
d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862;
branches in Madras and Pondicherry, then a French colony, followed. Calcutta was the most
active trading port in India, mainly due to the trade of the British Empire, and so became a
banking center. Around the turn of the 20th Century, the Indian economy was passing through a
relative period of stability. Around five decades had elapsed since the Indian Mutiny, and the
social, industrial and other infrastructure had improved. Indians had established small banks,
most of which served particular ethnic and religious communities.
The presidency banks dominated banking in India but there were also some exchange banks and
a number of Indian joint stock banks. All these banks operated in different segments of the
economy. The exchange banks, mostly owned by Europeans, concentrated on financing foreign
trade. Indian joint stock banks were generally undercapitalized and lacked the experience and
maturity to compete with the presidency and exchange banks. This segmentation let Lord Curzon
to observe, "In respect of banking it seems we are behind the times. We are like some old
fashioned sailing ship, divided by solid wooden bulkheads into separate and cumbersome
compartments."By the 1900s, the market expanded with the establishment of banks such as
Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai - both of which
were founded under private ownership. Punjab National Bank is the first Swadeshi Bank founded
by the leaders like Lala Lajpat Rai, Sardar Dyal Singh Majithia. The Swadeshi movement in
particular inspired local businessmen and political figures to found banks of and for the Indian
community. A number of banks established then have survived to the present such as Bank of
India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India.
1.2 ABOUT SUBJECT:-
“Microfinance” is often defined as financial services for poor and low-income clients. In
practice, the term is often used more narrowly to refer to loans and other services from providers
that identify themselves as “microfinance institutions” (MFIs). These institutions commonly tend
to use new methods developed over the last 30 years to deliver very small loans to unsalaried
borrowers, taking little or no collateral. These methods include group lending and liability, pre-
loan savings requirements, gradually increasing loan sizes, and an implicit guarantee of ready
access to future loans if present loans are repaid fully and promptly.
In the development paradigm, micro-finance has evolved as a need-based policy and programme
to cater to the so far neglected target groups (women, poor, rural, deprived, etc.). Its evolution is
based on the concern of all developing countries for empowerment of the poor and the
alleviation of poverty. Micro-finance programmes have, in the recent past, become one of the
more promising ways to use scarce development funds to achieve the objectives of poverty
alleviation. The basic idea of micro-finance is simple: if poor people are provided access to
financial services, including credit, they may very well be able to start or expand a micro-
enterprise that will allow them to break out of poverty.
For development practitioners, the success of micro-finance programmes is encouraging. Too
often in the past, costly large-scale development initiatives have failed to achieve any sustainable
benefits, especially after funds have dried up. Thus, micro-finance has become one of the most
effective interventions for economic empowerment of the poor.
1.3 GENESIS OF MICROFINANCE
The first major demonstration of this kind of lending came from Bangladesh, a country which
was virtually synonymous with poverty. During 1976, Muhammed Yunus, then a professor of
economics at Chittagong University, began an experiment aimed at helping impoverished
villagers. Defying the usual rules, he lent them unsecured money to start small enterprises,
such as rice processing, rickshaw-driving and weaving. Instead of collateral, the borrowers were
to form small groups( called Self Help Group) and agree to a fact of mutual liability, in
other words, the liability of the members will be both joint and several – viz., if one defaults the
others will have to pay. The participants in the fact knew each other, which created peer pressure
for successful repayment and along with the compelling need for a source of income in a place
with few other opportunities, it produced surprising results. After first two years, prof. ,
Muhammed Yunus found that he was getting an outstanding payback of 99%. The experiment,
by then officially known as the Grameen Bank, was expanded and has become legendry in the
world of development banking.
1.4 Micro Finance in India – An Overview
In the post nationalisation era, the banking sector witnessed flow of substantial amount of
resources while the banking network underwent an expansion phase without comparables in the
world. Credit came to be recognized as a remedy for many of the ills of poverty. Credit packages
and programmes were designed based on the perceived needs of the poor. Programmes also
underwent qualitative changes based on the experience gained.
National Bank For Agriculture and Rural Development(NABARD), during the early eighties,
conducted a series of research studies in association with MYRADA (a leading NGO from South
India) and also independently which showed that despite having a wide network of rural bank
branches that implemented specific poverty alleviation programmes and self-employment
opportunities through bank credit for almost two decades, a very large number of the poor
continued to remain outside the fold of the formal banking system. These studies also showed
that the existing banking policies, systems and procedures, and deposit and loan products were
perhaps not well suited to meet the most immediate needs of the poor. It also appeared that what
the poor really needed was a better access to these services and products, rather than cheap
subsidised credit. Against this background, a need was felt for alternative policies, systems and
procedures, savings and loan products, other complementary services, and new delivery
mechanisms, which would fulfil the requirements of the poorest, especially of the women
members of such households.
The pilot project has been making steady progress over the years. Beginning from 255 SHGs
linked with banks during 1992-93, by 31 March 1996 around 4750 SHGs were linked with bank
loan of Rs.605.84 lakhs and NABARD refinance of Rs.566.12 lakhs covering 28 commercial
banks, 60 RRBs and 7 Cooperative Banks in 16 States and 1 Union Territory The Working
Group is of the view that the linking of SHGs with the banks is a cost-effective, transparent and
flexible approach to improve the accessibility of credit from the formal banking system to the
unreached rural poor.
1.5 Insight of Self Help Group (SHG)
Self-Help Group (SHG) is a small voluntary association of poor people, preferably from the
same socio-economic background. They come together for the purpose of solving their common
problems through self-help and mutual help. The SHG promotes small savings among its
members. The savings are kept with a bank. This common fund is in the name of the SHG. SHG
is a group formed by the community, which has specific number of members from 5 to 20.
SHGs basic aim is to promote thrift and saving habit among the members and financing them to
meet their emergent credit need. The process helps them imbibe the essentials of financial
intermediation including prioritization of needs, setting terms and conditions and accounts
keeping. They also learn to handle resources of a size that is much beyond individual capacities
of any of them. The members begins to appreciate that resources limited and had a cost once the
group show this mature financial behaviour banks are encourage to make a loan to SHGs in
certain multiples of accumulated saving of SHGs. These loans are given to the group without any
collateral and at market interest rate and the group continuous to decide the terms of loans to
their members. Since the groups own accumulated savings is a part and parcel of the aggregate
loans made by the group to their members, peer pressure ensure timely repayment.
1.6 Objectives of SHGs
To evolve a supplementary credit strategy for reaching the rural poor
To build mutual trust and confidence between banks and rural poor.
To encourage banking activities in rural areas.
To sensitize people of target area for the need of SHG and its relevance in their
empowerment process.
To create group feeling among members.
To enhance the confidence and capabilities of members.
To develop collective decision making among members.
To encourage habit of saving among members and facilitate the accumulation of their
own capital resource base.
To motivate members taking up social responsibilities particularly related to
development.
1.7 Features of SHGs
1. No. of members: SHGs are formed by a group of 5-20 members. There can be one person
from one family in one SHG and one person cannot be a member of more than one SHG.
2. Member selection: The members select their own members to form groups. The members
residing in the same neighbourhood ensure better character screening and tend to exclude
deviant behaved ones.
3. Registration: it is not mandatory but still can be registered under Co-operative Societies act.
4. Small and fixed savings at frequent intervals: Small and fixed savings made at regular
intervals coupled with conditions like compulsory attendance, penal provisions to ensure
timely attendance, saving, repayment etc.
5. Savings first and credit later: The saving first concept enables the poor to gradually
understand the importance of saving, appreciate the nuances of credit concept using their
own money before seeking external support (credit) for fulfilling future needs. The poor tend
to understand and respect the terms of credit better.
6. Intra group appraisal systems and prioritization: Essentials of good credit management like
(peer) appraisal for credit needs (checking the antecedents and needs before sanction), (peer)
monitoring- end use of credit; (peer sympathy) re-schedule in case of crisis and (peer
pressure) collateral in case of willful non-payment etc all seems to coexist in the system –
making it’s one of the best approaches for providing financial services to the poor.
7. Credit rationing: The approach of prioritization i.e. meeting critical needs first serves as a
useful tool for intra –group lending. This ensures the potential credit takers/users to
meticulously follow up credit already dispensed, as future credit disbursals rely on
repayments by the existing credit users.
8. Shorter repayment terms: Smaller and shorter repayment schedule ensures faster recycling of
funds, greater fiscal prudence in the poor and drives away the slackness and complacency
that tends to set-in, in long duration credit cycles.
9. A multiple-eyed operation: The operations of the SHG are transacted in group meetings thus
enabling high trust levels and openness in the SHG system. SHG members facilitating
openness and freedom from unfair practices also generally conduct the banking transactions.
Models of linkage between SHGs and Banks:
1. Banks deal directly with individuals SHGs: The banks provide financial assistance to
individual SHGs for lending to the individual members.
2. SHGs formed by the NGOs and linked to Bank: In the, NGOs would organize the poor
into SHGs, undertakes training, help in arranging inputs extension and marketing,
introduce savings and internal lending and help in maintenance of accounts and so on,
Banks directly provide loans to SHGs, with the recommendation of NGOs.
3. NGOs form SHGs: And perform financial intermediation role as a lender to SHGs after
sourcing loans from bank. Here the loans are given to NGOs by the bank for
1.8 Supportive policies of NABARD
1. Margin and Security Norms: As per operational guidelines of NABARD, SHGs are
sanctioned savings linked loans by the banks (varying from a saving to loan ratio of 1:1
to 1:4).
2. Rate of Interest: NABARD would continue to provide refinance support to the banks
under the linkage project. The present interest rate structure stipulated by NABARD at
different levels under the SHG-Bank Linkage Programme is as under:
NABARD to Banks (Refinance) 6.5% p.a.
Banks to SHG 12.00%p.a.
SHG to members As decided by SHG
Note: The guidelines of NABARD have been regularized and moderated by RBI.Advantages of
SHGs linkage
The advantage of SHG linkage is are broadly classified as, advantages to Government,
advantages to SHG, advantages to NGOs and the advantages to the bank.
Advantages to Government:
Rural poor not to dependent upon and not to look upon government to tackle their
poverty
It effects of various Government sponsored and poverty alleviation programs are
checked i.e. wrong identification of beneficiary, mis-utilization of funds or subsidy,
targeted approach , under or over financing and poor recovery
Provide viable alternative to any credit program.
Encourage NGOs to involve themselves in rural development activity
Routine social programs through SHGs
Voluntary participated of the people in the up liftment process
Advantages to SHG:
Helps in resource mobilization of the group
Helps in sharing of information with members
Helps in capacity building of members
It enhances the sustainability of the group
It is mutually beneficial program for SHG and the bank
Advantages to bank
It leads to increase in social base and also deposit base of the bank
It leads to expansion of loan portfolio i.e. better quality lending and need based credit,
coverage of large number of small borrowers, reduction in transaction cost by
externalization of a part of the work items of credit cycle, cut in the time lag between
application and actual sanction/disbursement of loan, provide social collateral security
and collective security and improvement in recoveries leading to wider coverage of
target group.
It enables simultaneous undertaking of social development.
It leads to portfolio diversification
1.9 Responsibility of Self Help Group representatives:
Following are the some of the important responsibility of the Self Help Group representatives
1. Meeting and Group functioning related
To be at the meeting venue at least 10 minutes before the scheduled time and to bring all
books and documents
To ensure that the scheduled that the scheduled meeting takes place regularly
To facilitate meaningful discussion and effective decision making in the meeting
To ensure financial affairs of the group including maintenance of records, audits and
funds management
2. Interpersonal Relationship
To facilitate good working relationship between members and to ensure the smooth
functioning of the group
To facilitate the members to resolve any conflicts that may arise in the group in an
amicable and just manner.
3. Relationship with others
To build linkages between various Government and private institutions and the groups
4. Capacity Building of members and information sharing
To share with the group all the information one has gathered while attending meetings in
ones capacity as a representative
To share all information obtained from training program with the rest of the members
To encourage members to become literate
To motivate members to participate in training programs and group activities.
5. SHG documentation related
To prepare and present the monthly/yearly financial statement before the group members
To record attendance of the meeting
To ensure the updating of all books of accounts and other records before the meeting
closes
To ensure that books and documents are kept safely and in good condition and produce
them whenever required
To ensure that audit of the group finance
To be trained in the maintenance of group books and documents
To ensure that a second line of book writers is developed in the group
1.10 Responsibilities of Self Help Group Members
The responsibilities of group members are as follows:-
1. Meeting and Group functions related
To attend the SHG meeting on a specified date, time and venue without fail
To actively participate in the proceedings of the meeting and provide effective
suggestions during discussions
To ensure rotation of representatives once in a year
To maintain discipline and unity in the group
2. Saving and loans related
To be regular in savings the minimum agreed amount in every meeting
To obtain loans for genuine requirements and utilize for the specific purpose
To be prompt in the repayment of the loan installments along with service charges
To keep track of one’s individual savings amount and loan record
To ensure that other members of the group properly utilize and reply and repay the loan
availed
3. Cash management and documentation related
To conduct cash transaction with the group only during the meeting
To bring pass book for updating each meeting
To ensure that the cash inflow to the group in remitted to the saving bank account at the
earliest
To ensure that the receipts are issued for any cash transactions with the group
In case the members is illiterate, to make conscious efforts to become literate
To ensure that the audit of all group transactions take place every year and to discuss the
audit findings in the group and follow-up action.
1.9 Books of accounts, Registers and files of SHG
The following are the books and registers which the SHGs has to maintain
1. Books and Registers: Visitor’s books, Admission Register, Attendance register,
Resolution/Minutes book, saving ledger, Loan ledger, Members individual pass book
(saving & loan), the pass book & cheque book, Cash or bank book, General ledger, Asset
register.
2. Documents: Receipts book, Voucher book, Demand promissory note, Loan application
cum sanction letter.
3. Others: Correspondence file, programme report file, Bank loan file, Monthly/Annual
financial Statement file.
The role of NGOs in Microfinance
Self Help Groups are almost always formed with outside assistance. Developmental NGOs, often
with considerable history of working in a particular area for projects like literacy, sanitation etc.,
take to organizing SHGs, bringing together people, explaining the concept to them, attending and
helping coordinate a few of the initial group meetings, helping them maintain accounts and
linking them with the banks. Of late, some of the rural banks themselves are being designated as
Self Help Promoting Institutions (SHPIs) and they help in the formation and ‘nursing’ of SHGs.
1.10 Challenges in Micro Finance
Despite the significant progress of Micro Finance programmes in the country, there are some
issues of concern, they are:-
Appropriate legal structures for the structured growth of MF operations.
Finding adequate levels of equity for the new entities to leverage loan funds.
Ability to access loan funds at reasonably low rates of interest.
Ability to attract and retain professional and committed human resources.
Design of apt MIS including user friendly software for tracking accounts and operations.
Appropriate loan products for different segments.
Ability to innovate, adapt and grow by performing various R&D activities.
Bring out a compendium of small and micro enterprises for the MF clients.
Identify and prepare a panel of locally available trainers.
The simultaneous development of investment potential and improvement of the skill levels
of the borrowers.
Capacity to provide backward linkages or create support structures for marketing.
Lack of an appropriate legal vehicle.
Creation of awareness among SHGs as many is unaware about benefits provided by the
government.
2 DESIGN OF THE STUDYS
2.1 TITTE OF THE STUDY
Title of the project is “A study of financing Self Help Groups of Syndicate Bank under the
concept of Micro finance in Bangalore region”.
2.2 STATEMENT OF THE PROBLEM
This study is made to identify that, Microfinance (i.e. Loans for SHG) is an opportunity for
micro finance at Syndicate bank in Bangalore region. It has been seen that micro finance is
consider to be of less importance by many financial institutions moreover micro finance activity
is considered to be as social responsibility, the purpose of this study is to find out the fact that
micro finance is also a business opportunity for the financial institutions.
This study also helps to understand the impact of micro finance (SHGs) on the social and
economical empowerment of the rural poor people.
2.3 OBJECTIVES OF THE STUDY
The objectives of the study are broadly classified as main objectives and sub objectives. The
main objectives are as follows:
a. To study whether micro finance (for self help group) is an opportunity for micro
finance business of syndicate bank Bangalore region.
b. To study Micro finance (for self help group) help bank (syndicate bank) to
increase social base and deposit base.
c. To study Micro finance (loans for self help group) help bank (syndicate bank) to
diversify their portfolio.
2.3 THE SUB-OBJECTIVES ARE AS FOLLOWS:
1. To know the impact and role of SHGs in improving banking habit of the rural poor and their
social empowerment.
2. To know whether SHGs has generated economic growth of the members and society as
hole.
3. To know the repayment habit of the people has increased because of SHGs.
2.4 SCOPE OF THE STUDY:
The study is conducted in order to know how the SHGs have improved banking habit of the rural
poor people of the Bangalore region and also to know the contributions of the SHGs to social
empowerment and rural development. This study is conducted under the banner of Syndicate
Bank Regional Office, Bangalore. The study is conducted in the month of Jan-Feb 2009 in
Bangalore district. The data are collected with the help of questionnaires from the SHGs and also
Syndicate Bank Managers of various branches in Bangalore region.
2.5 METHODOLOGY OF THE STUDY:
The study has been undertaken based on both the primary and secondary sources of data.
Primary sources of data: Primary data are collected with the help of questionnaires from
the SHGs and also Syndicate Bank Managers of various branches in Bangalore region.
Secondary sources of data: A secondary source consists of readily available compendia
and already compiled statistical statements and reports whose data may be used by the
researcher for their studies.
The major sources of secondary data are given below:
The bank annual report of last three years
The bank circulars regarding the micro finance
The bank broachers.
The various journals and articles
Company website
Other websites
2.7 SAMPLING PLAN
A sample is a subset or some part of a population; it is a small representative lot of population
selected at random. The process of selecting a sample from a large population is called sampling.
The variable determined for the study was identified keeping in mind the population of SHGs
located in villages covered by the Syndicate Bank Regional office Bangalore.
2.8 SAMPLING UNIT
The SHGs linked with Syndicate bank directly or through NGOs in Bangalore region and also
Managers of various Syndicate Bank branches which comes under Bangalore regional Office.
SAMPLING METHOD
For this project non-probability method of sampling is adopted. In non-probability sampling
convenience method of sampling is adopted. The convenience method of sampling is the method
where population is selected on the base of convenience of researcher.
SAMPLE SIZE
Sample size consist of 20 respondents of SHGs along with this 3 Syndicate bank branch
managers of Bangalore region are also surveyed.
FIELD WORK
The study was mainly concentrated on the field work and her face to face interaction was done
with the SHGs and with bank branch managers with the help of questionnaire.
DATA ANALYSIS
The data are collected is analyzed with help of statistical tools and presented in the form of
tables, percentages, bar charts and pie charts. This method is used to describe relationship.of
various items
2.7 LIMITATIONS OF THE STUDY
Despite of all possible efforts to make an analysis pure, comprehensive and scientific a study of
the present kind is bound to have certain limitations. The present study was an empirical work
presented in the deceptive manner. Since the objective of the study may be attained by this kind
of analysis, attempt has been made to provide comprehensive conceptual analysis. The following
are some of the important limitations of the study.
1. The time available was insufficient to carry on an exhaustive study but the researcher has
done every effort to make this study exhaustive one.
2. The respondents for this study are the representatives of SHGs and these people of rural
background and less educated and it very difficult to collect the relevant information
from these people because of lack of knowledge about the concept and communication
gap. But the researcher has done every effort to convince these people and collect
relevant information.
3. The researcher has gone for convenience method of sampling and because of various
constraints he could not go for probability method of sampling. One of the main
constraints is that, the responSdents are spread across the Bangalore region. If the
researcher has gone for probability method of sampling it is very difficult to reach each
and every respondent within the limited period of time.
4. The sample size selected is 10 Branch managers and 40 SHG’s respondents only
therefore it is very difficult to give accurate judgments on the basis of this limited sample.
3 . COMPANY PROFILE
Syndicate Bank was established in 1925 in Udupi, the abode of Lord Krishna in coastal
Karnataka with a capital of Rs.8000/- by three visionaries - Sri Upendra Ananth Pai, a
businessman, Sri Vaman Kudva, an engineer and Dr. T M A Pai, a physician - who shared a
strong commitment to social welfare. Their objective was primarily to extend financial assistance
to the local weavers who were crippled by a crisis in the handloom industry through mobilizing
small savings from the community. The bank collected as low as 2 annas daily at the doorsteps
of the depositors through its Agents under its Pigmy Deposit Scheme started in 1928. This
scheme is the Bank's brand equity today and the Bank collects around Rs. 2 crores per day under
the scheme.
The progress of Syndicate Bank has been synonymous with the phase of progressive banking in
India. Spanning over 80 years of pioneering expertise, the Bank has created for itself a solid
customer base comprising customers of two or three generations. Being firmly rooted in rural
India and understanding the grassroots realities, the Bank's perception had vision of future India.
It has been propagating innovations in Banking and also has been receptive to new ideas, without
however getting uprooted from its distinctive socio-economic and cultural ethos. Its philosophy
of growth by mutual sustenance of both the Bank and the people has paid rich dividends. The
Bank has been operating as a catalyst of development across the country with particular
reference to the common man at the individual level and in rural/semi urban centers at the area
level. The Bank is well equipped to meet the challenges of the 21st century in the areas of
information technology, knowledge and competition. A comprehensive IT plan is being put in
place and the skills and knowledge of the Bank's personnel are being upgraded through a variety
of training program to promote customer delight in every sphere of its activity. The Bank has
launched an ambitious technology plan called Centralized Banking Solution (CBS) whereby 500
of our strategic branches with their ATMs are being networked nationwide over a 4 year period.
3.1 Background and Inception of the Bank
On November 10, 1925-Business of Bank commenced in a small room in Udupi with only one
employee.
1928- First branch was opened at Brahmavara, a village 13kms away from Udupi.
1932-First urban branch was started in Bangalore which became the district head
quarters.
1937- Bombay branch was started and became member of clearing house.
1943- Deposits crossed Rs. one crore.
1949- Celebrates silver jubilee in all its 79 branches spread all over South India.
1953- The Bank took over the assets and liabilities of two local banks, Maharastra Apex
Bank Ltd and Southern India Apex Bank Ltd.
1957- Staff training college came into existence at head office.
1961- Industrial Financial Department was set up to encourage advances to small
industrial and entrepreneurs in keeping with the policy of assisting the common man.
1962- An innovation in the field of female employment in banking industry was made by
opening a series of ‘All Women’s Branches’.
1963 - The name of the Bank was shortened from ‘Canara Industrial and Banking Synd
Ltd’ to ‘Syndicate Bank Limited’; the head office was shifted to Manipal.
1969- Syndicate bank was nationalized along with 13 other big banks. During same year,
a branch at Port Blair in Andaman and Nicobar Island was opened.
1972- Conducted 28 self employment clinics in different centres to encourage self
employment ventures.
1975- The Bank completed 50 years of its service, by then it had grown into a big bank in
public sector with deposits exceeding Rs500 crore.
1975-First regional rural bank appropriately called ‘Prathama Bank’ in Moradabad in
Uttar Pradesh.
1976 - London branch was opened.
1982 - The first rural development and self employment training institution was set up in
Ujire in collaboration with Shree Dharmasthala Manjunatheshwara Education Trust and
Canara Bank.
1985 - The diamond jubilee was celebrated when the deposits mobilized were over Rs
4000 crore.
1987 - The in-house computer at head office was upgraded.
1989 - Credit card scheme was introduced.
1993 - It established connectivity of SWIFT (society of worldwide interbank finance
telecommunication).
1995 - Specialized branches like Asset Recovery Management Branch, Hi-tech
Agriculture Branch, Small Scale Industry Branch and Housing Finance Branches were
opened.
1996 - First telebanking facility was introduced at south block branch, New Delhi and
first ATM was installed at Gandhinagar, Bangalore.
1998 - Kissan credit card was launched.
2002 - Centralized Banking Solution under the brand name “Syndicate-e-banking”
launched at Delhi, Mumbai, Bangalore and Manipal.
2002 - First branch under CBS (Core Banking Solution) started operation at Bangalore.
2004 - Bank ties up with United India Insurance Co. Ltd. for distribution of Non-Life
Insurance products
2005 - Introduced On-line reservation of Railway Tickets through Indian Railway
Catering & Tourism Corporation Ltd. (IRCTC) for Internet banking customers of our
Bank.
2005 - Implementation of Venture Capital Scheme of SMALL FARMERS AGRI-
BUSINESS CONSORTIUM (SFAC) Entered into MOU with SFAC for promoting of
investments in Agri-business products.
2006 - Inauguration of SyndBank Services Limited, the 1st BPO outfit of a Nationalized
Bank, a wholly owned subsidiary of Syndicate Bank & 525th CBS Branch.
2007 - First Branch Opened in Mizoram in Aizawl.
2008 - Branch network expanded to all States and Union territories except Manipur and
Daman Diu.
3.2 Nature of Business Carried
Syndicate Bank being a major public sector banks in India, is well known for its banking
operations that is, it provides various services and products to the customers by means of ATM,
Debit Card, Credit Card, Internet Banking as the services and Retail Credit Scheme, Personal
Banking Loan Scheme, Deposit Schemes at CBS Branches, and Term Deposit Schemes as its
products. Other than the banking operation it also provides Foreign Business, Mercantile
Banking, Insurance Banking, General Banking, and Social Baking to the various customers in
India as well as in abroad.
3.3 Vision Statement of the Bank
A vision statement outlines what a company wants to be. Vision statement describes a desirable
state that a company wishes to attain at some time in the future. Vision statement of Syndicate
Bank is as follows
Consolidating position as a Premier Public Bank with increased global outreach.
Emerging as a strong, vibrant, responsive competitive bank.
Embracing state of art technology, harnessing human potential and effective participating in
the process of nation building.
Serving its constituents and stakeholders as a faithful and friendly financial partner.
3.4 Mission Statement of the Bank
A mission statement is a brief statement of the purpose of an organization. The intention of a
mission statement is to keep members and users aware of the organization's purpose. Mission
statement of Syndicate Bank is as follows:
To redefine and redevelop peoples management technique to unleash human potential
and drive growth.
To guarantee highest level of satisfaction to the customer who is the purpose, the
stakeholders for their valued interest and the regulators, the shepherd.
To develop leadership of high quality corporate governance via best and sound business
practices, enhance the shareholders value and retain the competitive edge through
innovation and world class standards of delivery of contemporary services and products.
To rebuild a vibrant and proactive financial institution fully committed to national
development.
3.5 Quality Policy of the Bank
Quality Policy is the general direction and goals of the organisation referring to quality being
officially published by the management.The quality policy provided by the Bank is of great
excellence. It provides services to the customers especially in the rural areas. Special services are
provided to special category like Kisan Cash Certificate, Small Scale Industries, Small and
Medium Enterprises, Agriculture and Allied activities, Senior Citizens of India, Social
Development like Syndicate Rural Development Trust, Rural Development and Self
Employment Training Institute, SyndVidya and Lead Bank Scheme are provided to the
customers.
3.6 PRODUCT PROFILE
Syndicate Bank provides various deposit products, loans and advances and other services. The
retailing banking business provides financial products and services to the customers. They
provide housing, retail trade, automobile, consumer education and other personal loans and
deposit services such as demand savings and fixed deposits for the customers.
The Bank has also focused on addressing the needs of priority sector customers and offer
specialized products and services to these sectors. The Bank delivers its products and services
through its extensive branch network, extension counters, ATM’s, phone banking and internet.
Following are the various types of products and services provided by the Bank.
1) Deposit Products
The following are the various types of deposit products offered by the Bank
Savings Bank Account: These accounts are designed to help the individuals (personal
customers) to inculcate the habit of saving money and to meet their future requirement of
money.
Current Accounts: Current Accounts can be opened by individuals, partnership firms,
private and public limited companies, specified associates, societies, trusts, etc.
Syndicate Suvidha Deposit: A Fixed Deposit with partial withdrawal facility - A flexible
and convenient scheme whereby a deposit is made for a fixed period from which amounts
can be withdrawn as and when needed. It is ideally designed for those who desire the high
interest on their fixed deposit with the operational convenience of withdrawals in times of
need.
Social Security Deposit: It is an ideal monthly income plan. Nothing provides greater
comfort and peace of mind than a guaranteed and regular income. This is particularly for
the aged and the pensioners who desire a monthly income through periodical investment of
their accumulated savings.
Special Premium Savings Account: The Bank has introduced a Special Premium Savings
Account at e-banking branches that combines full safety, easy liquidity and highest
possible interest. The salient features of this scheme are that customer’s money earns solid
interest as a fixed deposit; it turns liquid to meet his urgent needs.
Pigmy Deposits: This deposit scheme suits the needs of everyone viz. businessmen,
professionals, wage earners, teachers, salaried personnel, traders, housewives etc. The
Bank's authorized agent collects the savings at our doorsteps at regular intervals.
Quick Money Deposit: A fixed deposit with overdraft facility. Convenience at its best
could well be the name of this scheme. A onetime fixed deposit of Rs.25,000/- or more for
a specified period automatically entitles to an overdraft limit of 80% of the deposits.
Vikas Cash Certificate: It is a Money Multiplier scheme and also an ideal and fast growing
scheme for those with big future commitments in mind viz., children's education,
daughter's marriage, and house purchase etc.
Senior Citizens' Security Deposit: A highly beneficial value added scheme, specifically
designed for the benefit of the respected Senior Citizens (above 60 years of age).
2) Personal Loan Product
The Bank is meeting varied personal credit requirements of different classes of people through
the following loan schemes under personal banking.
SyndMahila: This type of loan is given to women employees and self employed in order to
meet any genuine personal credit needs.
Syndvahan Vehicle Loans: This type of loan is given to the individuals to purchase new/old
4-wheeler and new 2-wheeler by individuals.
Syndvyapar - Loans for Traders: This scheme helps to meet the credit limit of all types of
traders.
SyndShakti: Artisan friendly scheme for extending need based credit for purchase of power
tools and to provide credit for purchase of power toolkits and need-based working capital
to the artisans, enabling them to upgrade the level of technology and improve their work
efficiency.
SyndVidya: The Scheme covers the entire spectrum of educational needs from the school
education to super speciality courses including overseas courses.
SyndNivas Plus: This is a pre approved personal loan for housing loan customers with
good payment record in order to meet any genuine personal or business credit requirement.
Syndpigmy: Syndpigmy is used to meet any contingent requirement of pigmy depositors.
SyndSenior: SyndSenior is an exclusive personal loan scheme for pensioners.
3) Services
Tele–Banking: Round the clock access regarding account details, balance enquiries,
transfer of funds can be made from one account to another and utility bills like electricity,
telephone, etc., can also be paid.
Internet Banking: The Bank is accessible from home, office or while travelling. A login
password and transaction password has to be obtained, with these passwords one can login
and
a. View account transactions.
b. Effect transfer of funds
c. Place requests for issue of Cheque books.
Any Branch Banking: Banking is no longer restricted to the physical boundaries of branch
premises. One can
- Get cash payment of cheque up to a limit in any other CBS Branches.
- Get collection of cheques.
- Purchase DDs, or get online transfer of funds.
Synd Bill Pay: A hassle free utility payment product wherein utility bills can be paid
directly by the Bank. The modes of payment are done by registering with the Bank all for
no charges.
Online Collection of Direct Taxes: Bank collects Central Board Direct Taxes from the
customer at the selected branches identified for this purpose.
Western Union Money Transfer: The Bank has signed MoU with M/s Kuoni Travel (India)
Pvt. Ltd. Agent for M/s Western Union Network (Ireland) Ltd to make payments of
Western Union Money Transfer remitted by NRIs from foreign countries.
Life Insurance: The Bank is in alliance with M/s. Bajaj Allianz for the distribution of Life
Insurance products under a Corporate Agency arrangement since October 2003.
SyndSona: The Bank has launched sale of gold coins under the brand name SyndSona. The
coins are in denominations of 4 Gms, 8 Gms, 10 Gms, 20 Gms and 50 Gms with 999.9 %
purity certificate and are sold through designated branches.
General Insurance: The Bank has tied up with United India Insurance Company Limited
under a Corporate Agency arrangement for distributing General Insurance products.
AREA OF OPERATION- GLOBAL/NATIONAL/REGIONAL
Syndicate Bank is a major public sector bank which serves over 21 million plus customers
through 2169 branch comprising of 644 rural, 492 Semi urban, 508 urban and 524 metro
branches, a branch at London and with a total staff strength of 26637. As at march 2008 the
Bank has branches in all states and Union Territories except the State of Manipur and the UT of
Daman and Diu. The Bank is known for Mass Banking through its innovative schemes ranging
in scope from small savings and social lending to corporate finance and foreign business. There
are five Regional Rural Banks sponsored by the Syndicate Bank covering 30 districts in 5 States
(Andhra Pradesh, Haryana, Karnataka, Kerala and Uttar Pradesh) with a network of 1244
branches. Some of the RRB’s occupy top slot among all RRB’s in the country in respect of key
business parameters. Total business of all RRB’s stood at Rs.19995 crores and registered a
growth of 23.26% during the year.
3.7 OWNERSHIP PATTERN:
The shareholding pattern of Syndicate Bank as on 31 -03 -2008 is as follows:
Sl.
No.
Category Number of
shares held
Percentage of
shareholding
A Promoter’s Holding
1 Promoters
Government of India 346968282 66.47
Foreign Promoters Nil
2 Persons acting in concert Nil
Sub Total 346968282 66.47
B Non-Promoter Holding
3 Institutional Investors
A Mutual Funds and UTI 1969055 0.38
B Banks, Financial Institutions, Insurance Companies
(Central/ State Govt. Institution/ Non-government
Institutions)
32897360 6.31
C FII’s 64536306 12.36
Sub Total 99402721 19.05
4 Others
A Private Corporate Bodies 9564030 1.83
B Indian Public 65019939 12.46
C NRIs/OCBs 750380 0.14
D Any others 262930 0.05
Sub Total 75597279 14.48
Grand Total 521968282 100.00
3.8 COMPETITORS INFORMATION
For any industries there are number of competitors who themselves try to emerge with
innovative products and services, to compete with other industries. They provide products and
services in order to satisfy the customers, which are economy to their purchasing habits.
Likewise Syndicate Bank is also having its competitors like all Public Sectors Banks in India,
and Private Sectors Banks, Foreign Banks etc. The main competitors of Syndicate Bank are SBI
and its Associates, Punjab National Bank, Canara Bank, Corporation Bank, Indian Overseas
Bank etc.
3.9 INFRASTRUCTURAL FACILITIES
During the financial year 2007-08, 46 branches including one Asset recovery management
branch at Kolkata were opened by the bank. Out of the above, 10 branches were opened in
minority concentrated districts and 21 under banked districts.
Ambience and Visibility: Good ambience encompassing neat and tidy business premises,
attractive and comfortable interiors coupled with proper visibility has been ensured in all
branches and offices, since these factors substantially impact the business.
Furnishing and Site Preparation: Timely and appropriate furnishing of premises to open new
branches and offices, refurnishing of branches cutting out to CBS and TBM, Site preparation for
opening ATM’s facilitated rapid expansion of core banking and computerization of branches, as
planned.
Energy saved is energy produced: Recognizing the fact that the use of energy efficient luminaries
like Compact Fluorescent Lamps saves electricity substantially, conventional light fittings have
been replaced with CFLs in 100 identified branches. In all new branches, renovated branches and
offices, only CFL fittings are used. This major step taken by bank will not only save much
needed electricity, but also economise on power charges.
Records Pool: With the Right to Information Act, the nature and volume of bank’s records to be
preserved for a longer period has become necessary.
3.10 ACHIEVEMENT / AWARDS WON BY THE BANK OVER THE YEARS
Following are the awards won by the Bank
1972 - INDIAN MERCHANTS' CHAMBER AWARD for outstanding contributions towards
welfare of community.
1974-INDIAN MERCHANTS CHAMBER AWARD for outstanding contribution in
promotion of savings.
1975 - FICCI AWARD For outstanding achievements in agriculture.
1975-LAGHU UDYOG SAHAKARI AWARD by the national alliance of young
entrepreneurs for Bank's significant contributions to the development of small scale
industries and assistance to the young entrepreneurs through self employment clinics.
1975 - INTERNATIONAL AWARD by JAYCEE INTERNATIONAL for self employment.
1975 - FICCI AWARD in recognition of corporate initiative in industrial relations.
1975 - CERTIFICATE OF MERIT for Bank's house journal "GIANT".
1976 - INTERNATIONAL AWARD by JAYCEE international for outstanding contribution
to the cause of the JAYCEE movement.
1977 - ASSOCHAM AWARD for promotion of rural and agricultural activities of Syndicate
Agriculture Foundation sponsored by the Bank.
1978 - INDIAN MERCHANTS CHAMBER AWARD for outstanding contribution towards
welfare of the community.
1978 - NATIONAL TROPHY For outstanding export performance .
1981 - NATIONAL INVESTMENT AND FINANCE AWARD for Priority Sector lending.
1999 - FICCI AWARD for institutional initiative in the field of "Rural Development" to
RUDSETI jointly sponsored by Syndicate Bank.
2001 - Banking Technology Award for innovative use of Banking Applications on INFINET
awarded by IDRBT, Hyderabad.
2003 - Banking Technology Award conferred on Syndicate Bank by IDRBT, Hyderabad.
2006 - Institute for Development and Research in Banking Technology (IDRBT), established
by Reserve Bank of India has conferred Syndicate Bank, “Special Award for Use of IT for
Customer Service in Semi-Urban and Rural Areas”. The award was given to Shri C P
Swarnkar, Chairman & Managing Director, Syndicate Bank by Dr Y.V. Reddy, Honourable
Governor, Reserve Bank of India on Sept. 02, 2006 at Hyderabad.
2008 -Won the Asian Banker Award for best core banking solution implementation among
the large-sized banks in the Asia-Pacific region.
Customer approaching the bank/ Enquiry
Introduction
Documentation
Saving, Fixed, current & Recurring
A/C
A/C Holder facilities
Deposits
Cashier
Cash supervisor
Account of the customer
Account of the customer
Cash supervisor
Cashier
Withdrawal
3.11 WORK FLOW MODEL OF SYNDICATE BANK
DEPOSITS
This is the work flow adopted by the Bank at the time of receiving the deposits from their
customer.
The following explains the detailed procedure adopted by the Bank at the time of
receiving the deposits from their customers. The Bank has gone through the following steps
while receiving deposits from their customers.
The first step in this process is customer approaching the bank. When the customers will have
surplus money with them, they will be looking to invest that money in some place where they
can get good returns out of it. Bank is one such place which accepts deposits from their
customers and pays interest on them. So the customers will be looking for that bank which will
pay them highest rate of interest on their deposits.
Once the customer identifies the bank where he is going to deposit his amount, he has to go
through the introduction stage, were the customer needs to be introduced to the bank. He may be
introduced to the Bank by the customer or an employee of this Bank.
The customer is asked for providing documents like Ration card or any license for address, age
& income proof. Once the account is opened (i.e. Either S.B a/c, fixed deposits, recurring
deposits or current a/c) he/she will provide with facilities like Cheque book, ATM or O.D if it’s a
current a/c.
Once the customer opens an account in the Bank he can deposit any amount any number of times
but in case of fixed deposit its one lump sum amount deposited till its maturity it is not
withdrawn. When amount is deposited it goes to the hands of cashier and then to cash supervisor
and then to his account, but now due to CBS in a minute we give to cashier and it is transferred
to customers a/c.
The depositors are eligible to withdraw the amount which is credited in their account and not
more than that unless it is current account. Depositors can withdraw as an when they need but in
case of fixed deposits prior 7 days notice to be given but today’s banker will not ask for any
notice just give it in the spot with penalty.
The process of withdrawal is reverse of depositing where from his account it goes to cash
supervisor from him to cashier finally to the hands of customer, again traditional work flow.
Now all are computerized where in one person does all the activity. Automated Teller Machines
have emerged as an alternative banking channel which facilitates low cost banking transaction.
Now Banks customers need not go to the bank branches but can withdraw money through the
Interface with the Manager
Know Your Customer
Evaluation of project
Sanction of Loan
Documentation
Transfer to S/B account
of ATM cards provided by the Bank to their customers. Customer can directly withdraw in
ATMs or can directly issue Cheque to the other party.
Advances
This is the work flow model followed by the Bank at the time of giving advances to their
customers. This involves the following series of steps, they are:
Interface with Manager
Any party requiring funds through Bank first has to talk with the respective manager of a branch
of his area. One thing the manager has to see that the amount of loan he has to sanction is in his
power/ limit or else he has to concern his higher authority. In this stage the process of negotiation
regarding rate of interest between party and Banker takes place.
Know Your Customer
The important duty of a manager is to know his customer. There are many systematically
techniques and process to know the real identification of the customers. This is done mainly to
avoid anti-laundering.
Evaluation of Project
The purpose of loan to be sanctioned should be clearly understood either by evaluating blue print
of his project or balance sheet or performance proof of his existing business. This is mainly done
to make sure that repayment of the amount is ensured and party won’t become Bankrupt. In case
of personal loan evaluation of the person is done through other person who is known to the
Banker.
Sanctioning
Sanctioning is not actual giving of loan that is the amount to be paid is promised .The party in
need of it is capable of withdrawing the amount not more than the amount sanctioned to him.
Documentation
The documentation deals with filling of forms that are in contractual form and most of the
documentation process could be seen in all the stage. It also deals with submission of security for
their loan and its formalities.
Transfer to his Account
The party which is borrowing loan from Bank need to have an account in that Bank, if not the
Banker will create an account for this purpose. And most of time the loan amount is transferred
to his account and rarely they give it in their hand, either in their hand, either in the form of DD,
Cheque or cash it depends upon the Banker and the party .
STRUCTURE
The bank has a well organized three tier structure with a sound foundation of 2113 business
outlets and a well defined reporting architecture as the body to support. The corporate
governance which is the breath sustaining the momentum is through a very talented board of
directors including government appointed directors employee and office representative directors
guided by RBI, Ministry of Finance, Government of India which forms the superstructure.
In the organization structure at the top is the board of directors, consists of 11 directors and they
are,
The Present Board of Directors
Mr. George Joseph Chairman & Managing Director
Mr. Ramesh Adige Director
Mr. M Deena Dayalan Director
Mr. K Seetharamu Director
Mr. Vinay Kumar Sorake Director
Mr. M Bhaskara Rao Director
Mr. A R Nagappan Director
Mr. Bhupinder Singh Suri Director
Mr. Kawaljit Singh Oberoi Director
Ms. Shobha Oza Director
Mr. Dinkar S Punja Director
Mr. Suresh Kumar Rustagi Director
The organization structure is based on standard function of the management. The syndicate bank
consists of a very talented board of directors, including government appointed directors,
employees and officer’s representative, directors guided by RBI, ministry of finance, and
government of India which forms the superstructure.
3.13 Organizational Structure of Syndicate Bank
General Managers
Portfolios
1. Corporate Credit Division – I (CCD-I) 9. Priority Sector Credit Dept
2. Corporate Credit Division – II (CCD-II) 10. Premises & Maintenance Dept
3. Retail Banking Department 11. Central Accounts & Legal Dept
4. Planning & Development Dept 12. Personnel Department
5. Recoveries Dept & General Admn Unit 13. Inspection Department
6. Dept. of Information Technology 14. Vigilance Department
7. Risk Management & Monitoring Dept.
8. Treasury & International Banking Division
Board of Directors
Branches- 2125
Chairman and Managing Director
Executive Director
4. DATA ANALYSIS
RESPONSES FROM SHG REPRESENTATIVES
1. it is required that the members of the SHG should be literate for smooth work flow as
well as proper documentation.
TABLE 4.1
4.1 Table Showing Literacy Level Of SHG Members
Valid Frequency Percent Valid Percent Cumulative Percent
Yes 35 87.5 87.5 87.5
No 5 12.5 12.5 12.5
Total 40 100.0 100.0 100.0
TABLE 4.1
4.1 Graph showing literacy level of SHG members:
From the above table it is clear that 87.5% of members of SHG’s are literates whereas only
12.5% of the members are illiterates which shows that majority of customers are well educated.
2. SHGs is formed by the members who may be from different occupations hence this study
also helps us to know about the homogeneity of the groups
TABLE 4.2
4.2 Table Showing Occupation Of Members
Valid Frequency Percent Valid PercentCumulative
Percent
Homogenous 15 37.5 37.5 37.5
Non-Homogenous25 62.5 62.5 62.5
Total
40 100.0 100.0 100.0
TABLE 4.2
4.2 Graph Showing Occupation Of Members
Homogenous Non Homogenous0
5
10
15
20
25
30
Occupation of the members
Occupation of the members
In Bangalore region it is found that most of the groups are non homogeneous in nature i.e. 62.5%
and remaining 37.5% are homogeneous members.
3. The main motive behind formation of SHG is to motivate SMEs hence this study helps us to know how far the objective is applicable in present scenario.
If Homogenous have you any new business from the borrowed money
TABLE 4.3
4.3 Table Showing Self Employed Undertaken Due To Homogeneity:
Valid Frequency Percent Valid PercentCumulative
Percent
Yes24 60.0 60.0 60.0
No
16 40.0 40.0 40.0
Total 40 100.0 100.0 100.0
TABLE 4.3
4.3 Graph showing self employed undertaken due to homogeneity:
It is inferred that most of the homogeneous groups utilize the credits for investing in SMEs. It is clear that 60% of the total respondent utilizes credit funds for the SMEs and remaining 40% members utilize fund for other purpose.
4. Most of the SHGs exist in the rural areas hence their occupation is related to primary sector especially agricultural related occupation
TABLE 4.4
4.4 Table showing occupation of the members:
Valid Frequency Percent Valid PercentCumulative
Percent
Agriculture 7 17.5 17.5 17.5
Self Employed 20 50.0 50.0 50.0
Home maker 7 17.5 17.5 17.5
others specify 6 15.0 15.0 15.0
Total 40 100.0 100.0 100.0
TABLE 4.4
4.4 Graph showing occupation of the members:
It is inferred that most of the respondents in Bangalore region dependent on self
employment that is 50%, 17.5% respondents engaged in agricultural occupation, 17.5%
respondents are home makers and the remaining 15% respondents engaged in other than this
occupations.
5. Every member has some motive behind joining SHGs. This question shows the prime
motive of the members before joining SHG in Bangalore region.
TABLE 4.5
4.5 Table Showing Prime Motive Of Members Behind Joining SHG
Valid Frequency Percent Valid PercentCumulative
Percent
For obtaining credit 9 22.5 22.5 22.5
To improve saving habit5 12.5 12.5 12.5
For achieving economic self reliance 12 30.0 30.0 30.0.0
To form social bond14 35.0 35.0 35..0
Total 40 100.0 100.0 100.0
TABLE 4.5
4.5 Graph Showing Prime Motive Of Members Behind Joining Shg
It is clear that 22.5% of the respondents joined SHGs to enjoy credit facility, the next
12.5%respondents joined SHG to improve saving habit, 30% of the respondents joined SHG for
achieving economic self reliance and remaining 35% respondents joined SHG to form social
bond.
6. SHGs have been graded on the basis of its age i.e. how old the group is and on that basis the bank extend credit facility.
TABLE 4.6
4.6 Table showing age of the group:
Valid Frequency Percent Valid PercentCumulative
Percent
Less than 1 -year 0 0 0 0
1 to 3 years 0 0 0 0
More than 3-years 40 100.0 100.0 100.0
Total 40 100.0 100.0 100.0
TABLE 4.6
4.6 Graph Showing Age Of The Group
less than 1 year 1 to 3 year more that 3 years 05
1015202530354045
Age of the group
In this survey it has been found that all the groups aged more than 3 years. From this it can be
inferred that from 2006 the formation of new group has come down drastically particularly in
Bangalore region.
7. The SHG will conduct their meeting as decided by the members according to their
convenience. In the meeting they will decide about their activity and they collect the sayings
money from each member and they verify their books of accounts. The meetings are conducted
weekly or fortnightly or monthly according to their convenience and the groups which conduct
weekly meetings are graded well by the banks.
TABLE 4.7
4.7 Table Showing Frequency Of Group Meeting:-
Valid Frequency Percent Valid PercentCumulative
Percent
Weekly 37 92.5 92.5 92.5
Fortnightly1 2.5 2.5 2.5
monthly2 5.0 5.0 5.0
Total
40 100.0 100.0 100.0
TABLE 4.7
4.7 Graph Showing Frequency Of Group Meeting:-
In Bangalore region 92.5% of the respondents replied that their groups conduct meetings once in
a week, 2.5% of the groups conduct meetings fortnightly and the remaining 5% of them conduct
once in a month. The groups which conduct the meeting once in a week are treated as more
active groups.
8. The attendance of the group members indicates how active the group is and the group is
treated as active group when all members of the group are more than 85% of attendance in
meetings.
TABLE 4.8
4.8 Table Showing Attendance In The Meeting
Valid Frequency Percent Valid PercentCumulative
Percent
Less than 60% 0 0 0 0
Between 60% to 85% 0 0 0 0
Above 85%40 100.0 100.0 100.0
Total40 100.0 100.0 100.0
TABLE 4.8
4.8 Graph Showing Attendance In The Meeting
Less than 60% 60% to 85% Above 85%0
5
10
15
20
25
30
35
40
45
Attendence in meeting
In Bangalore region it is found that in all most all the groups more than 85% of attendance is
found. Therefore it can be said that the SHG’s of Bangalore region are active groups.
9. The group which follows democratic style of functioning can lead to social empowerment
because in a group all the members will get an equal opportunity for participation as well as
decision making
TABLE 4.9
4.9 Table Showing Style Of Functioning & Group Discussion
Valid Frequency PercentValid
PercentCumulative
PercentDemocratic & Transparent 40 100.0 100.0 100.0
Autocratic 0 0 0 0
Total 40 100 100 100.0
TABLE 4.9
4.9 Graph showing style of functioning & group discussion:
Democratic Autocratic0
5
10
15
20
25
30
35
40
45
Style of functioning
It is one of the interesting findings that all the groups in Bangalore region which are surveyed are
following the democratic style of functioning and it will help in achieving the objectives of the
SHGs and social empowerment. Therefore it can be said that these SHGs help full in
empowering women in the society.
10. In olden days the rural poor who did not have any banking knowledge are hesitated to go
to banks because of lack of knowledge. But now because of SHG every member of the SHG has
got the knowledge about the bank and now they are getting better response from the banks.
Showing the change in the response of bank towards the SHG member’s than as an individuals.
TABLE 4.10
4.10 Table Showing Change In The Response From The Bank As A Member Of Shg Than As An Individual:
Valid Frequency Percent Valid PercentCumulative
Percent
Yes40 100.0 100.0 100.0
NO0 0 0 0
Total40 100.0 100.0 100.0
TABLE 4.10
4.10 Graph showing change in the response from the bank as a member of shg than as an individual:
Yes No05
1015202530354045
Change in response of banker towards members
Among the total respondents it is found that 100% of the respondents agree that they get
better response from the banker as a group than as an individual.
11. Ths is question will help us to know how often the bank managers will visit the SHG’s and
attain their meetings and about the role of the bank in the development of the SHG’s.
Showing the frequency of Bank managers attending SHG’s meeting.
TABLE 4.11
4.11 Table Showinh Frequency Of Bank Managers Attending SHG’s Meeting
Valid Frequency Percent Valid PercentCumulative
Percent
monthly 12 30.0 30.0 30.0
never 28 70.0 70.0 70.0
Total 40 100.0 100.0 100.0
TABLE 4.11
4.11 Graph Showing Frequency Of Bank Managers Attending SHG’s Meeting
From the survey it has been found that 30% of the respondents are of the opinion that bank
managers attain their meeting once in a month and the remaining 70% of the respondents say that
bank managers never attain their meeting, ctly.
12. One of the objectives of SHG is empowerment of the rural poor especially the rural women
for that it has to generate and develop decision making and leadership quality of the rural poor.
This study helps to find whether every member in a group gets an opportunity to become a leader
or representative of that group. Showing the leadership opportunity in the group
TABLE 4.12
4.12 Table showing opportunity for becoming a leader in the group:
Valid Frequency Percent Valid PercentCumulative
Percent Yes 40 100.0 100.0 100.0
No 0 100.0 100.0 100.0
TABLE 4.12
4.12 Graph showing opportunity for becoming a leader in the group:
Yes No0
5
10
15
20
25
30
35
40
45
Leadership opportunities in a group
In this survey it is found that in every group each person gets an equal opportunity to become the
leader of the group, which helps the members of the group to develop their leadership as well as
decision making qualities. It is also found that the time gap between the changes of group leader
is from 1 to 2 years.
4.13 This question is to know whether the member of the SHG’s have undergone any training
program conducted by banks or NGO’s or any other government organizations.
TABLE 4.13
4.13 Table Showing Training Program For The Members
Valid Frequency Percent Valid PercentCumulative
Percent
Yes 40 100.0 100.0 100.0
TABLE 4.13
4.13 Graph showing training program for the members:
From this survey it has been inferred that all the respondents of Bangalore region have attained
some or the other training program, among which most were conducted by NGO’s.
RESPONSES FRSOM BANK MANAGERS OF SYNDICATE BANK, BANGALORE REGION. Training Program for SHG’s:As for smooth running of the SHG and proper documentation, certain skills and knowledge of
book keeping is essential for the group members, hence certain training needs to be provided to
the SHG members. They should also be trained for making effective utilization of their funds and
should be encouraged for forming SME’s. Hence this questionnaire helps to know how far the
bank is engaged in providing training to the SHG members.
TABLE 4.14
4.14 Training program conducted for SHG's
Valid Frequency Percent Valid PercentCumulative Percent
Yes 3 30.0 30.0 30.0
No 7 70.0 70.0 70.0
Total 10 100.0 100.0 100.0
From this survey it has been inferred that in Bangalore region only 30% of branches of Syndicate
Bank provides various trainings to the SHG’s and the remaining 70% of the branches do not
provide any trainings. The reason behind this is most of the SHG’s are related to bank through
NGO’s and hence those groups are been trained by the SHG.
Percentage of default rate by SHG’s:
Earlier it was considered very risky to provide loans for rural people as the credit required by them was of smaller size hence bank has to incur high transaction cost as well as the default rate was higher. But now the scenario has been changed, this study helps us to find the default risk of loans given by Syndicate bank in Bangalore region.
TABLE 4.15
4.15 Percentage of default of SHG loans
Valid Frequency Percent Valid PercentCumulative Percent
00 to 0.5 10 100.0 100.0 100.0
From this survey it has been inferred that 100% of the respondents in Bangalore region are of the
opinion that the default risk in lending to SHG is from 0 to 0.5% only. This low default rate
helps banker to provide liberal credit policies to the SHG’s.
. Probability that members of SHG’s have opened saving bank a/c in their
individual name:
One of the objectives of SHG is to generate savings. This study helps to find out whether the
increase in the savings of the SHG members has lead to increase in the SB accounts in the banks
which leads to increase in the deposit base of the banks.
TABLE 4.16
4.16 Probability that members of SHG’s have opened SB a/c in their individual a/c
Valid Frequency Percent Valid PercentCumulative Percent
Yes 6 60.0 60.0 60.0
NO 4 40.0 40.0 40.0
Total 10 100.0 100.0 100.0
Probability that members of SHG’s have opened SB a/c in their indi-
vidual a/c
YesNo
From the above survey it has been inferred that 60% of the SHG members opens the SB accounts
in the banks, which leads to increase in the deposit base of the banks
.Banks motivation to SHG's to utilize fund for productive purpose:
The main purpose behind lending loans to SHG is to use it for productive activities. Hence this
study helps to know the level of motivation provided by Syndicate bank for productive usage in
Bangalore region.
TABLE 4.17
4.17 Banks motivation to SHG's to utilize fund for productive purpose
Valid Frequency Percent Valid PercentCumulative Percent
Yes 10 100.0 100.0 100.0
From the survey it has been found that 100% of the respondents motivate the SHG to utilize the
funds for productive purpose.
Interpretation from secondary data.
TABLE 4.18
Particulars 2006-07 2007-08
Existing SHG's linked 63112 87416
New SHG's linked 24304 28180
Total SHG's linked 87416 115596
2006-07 2007-080
20000
40000
60000
80000
100000
120000
6311287416
24304
28180
New SHG's linked Existining SHG's linked
The above figure shows the growth of SHG linked to Syndicate bank Bangalore region. The
SHG linked to bank shows a growth rate of 32% in the year 2007-08. It seems to be a favourable
figure as it leads to increase in the social and deposit base of the bank.
TABLE 4.19
Particulars 2006-07 in crores 2007-08 in croresExisting SHG's Cr linked 322.103 496New SHG's Cr linked 174.37 316Total 496.473 812
1 20
100
200
300
400
500
600
700
800
900
322.103
496
174.37
316
New SHG's Cr linkedExisting SHG's Cr linkedParticulars
The above figure shows the growth of SHG credit linked to Syndicate bank Bangalore region.
The SHG credit linked to bank shows the approximate growth rate of 70% in the year 2007-08. It
indicates that the banking habit of the rural poor in this area is increasing tremendously, which is
a good opportunity for the growth of the bank.
1. SUMMARY OF FINDINGS
Various findings of this study are as follows:
from the above table it is clear that 87.5% of members of SHG’s are literates whereas only 12.5% of the members are illiterates which shows that majority of customers are well educated.
Only 37.5% of the SHG’s members in Bangalore region are homogeneous in nature and the
remaining 62.5% are non-homogeneous in nature. As a result it is found that a very small
portion of credit i.e.22.5 %( 60%of 37.5% homogeneous) is utilized for SME’s.
The main motivators of the SHG in Bangalore region are NGO’s; especially two NGO’s are
playing a vital role: Women and Child development department and Shri Kshetra
Dharmastala Rural Development Program (SKDRDP).
The prime motive of the members in Bangalore region to join SHG’s is to form social bond
i.e.35% and to achieve economic self reliance i.e.30% of the total respondents.
It is found that all the respondent groups are formed before 2006, from this it can be inferred
that before 2006 the SHG movement in Bangalore region was very strong but from the year
2006 onwards the formation of new SHG’s has come down. Therefore proper measure has to
be taken to motivate the SHG formulation.
In Bangalore region 92.5% of the SHG’s conduct their meeting once in a week and every
member save a certain predetermined amount. This shows how the SHG’s has generated
saving habits in the minds of rural poor.
The groups are following democratic type of functioning and each and every member of the
group has an equal opportunity for decision making and becoming a leader.
sAlmost all the SHG members in Bangalore region have the opinion that they are getting
better responses from the banks as a member than as an individual.
Almost all the branch managers of Syndicate bank Bangalore region has the opinion that the
banking habit of the members has been improved than that from the individuals.
Almost all the branch managers of Syndicate bank Bangalore region have the opinion that the
formulation of the SHG has increased the deposit base of the bank.
5.1 SUGGESTIONS:
From this survey it has been found that the formulation of SHG has been drastically come
down. It is necessary for Syndicate bank, Bangalore region to create awareness among rural
people about.
From this survey it has been found that only 70% of the bank managers don’t attain the
SHG meeting. By attaining the group meeting the bank managers get access to the
difficulties faced by the group and also the other opportunities by lending to the group.
From this survey it has been found that the formation of SHG leads to improvement in the
banking habit of the people in that region. At this movement banks should motivate and
educate people to improve saving habit by opening different accounts with bank.
The bank should provide liberal policies for credit lending to SHG as the default rate is
negligible.
The lending rates to the SHG should be increased (From 9% to 12%) and the bank should.
The bank should change their view about micro finance (loans for SHG) from a social
responsibility to a business opportunity and this can be done by increasing a lending rate.
The Syndicate bank Bangalore region should try to increase its credit base and use the
refinance facility provided by the NABARD.
5.2 CONCLUSION:-
The Bank is well equipped to face the competition from the foreign banks as well as the private
sector banks. The Bank has implemented the Core Banking Solution in most of its branches. The
Bank has set up apex training institute in Manipal for training for its employees. The Bank has
been offering innovative products to its customers and also it has set up separate branches to
offer services in the field of housing Finance and small and medium enterprises. The Bank has
been continuously expanding its branches throughout the India. The technological advancement
made by the Bank is aimed at providing banking service to all the sections of the society besides
using it as a management tool.
5.3 BIBLIOGRAPHY
References:
Bank Quest, vol-75, Oct-Dec 04. (the journal of Indian Institute of Banking & Finance)
Annual Reports of Syndicate Bank, for the years 2006-07, 2007-08.
N.S. Toor, “Handbook of Banking Information”, 25th edition, Jun-2007, Skylack
publications, Delhi. Page no. 3.6.
G C Beri, Marketing Research, 2007
Websites
http://www.syndicatebank.in
http://www.wekipedia.com.
http://en.wikipedia.org/wiki/micro_finance
http://www.rbi.org.in/scripts/Publications.aspx
http://www.nabard.org/nabardrolefunct/nabardrole&functions.asp
http://cgdif.nic.in/shg.htm#
http://megselfhelp.gov.in/default.htm
http//www.microfinance.in/presentation/sou.ppt