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Affiliated to GBTU,LUCKNOW

FINANCING SMALL SCALE INDUSTRIES

SBI VIS--VIS OTHER BANKS

NAME OF THE STUDENT: PROJECT MENTOR

JYOTI YADAV (AT THE BANK)Mr. DINESH PODAR

JUNE 14-2013 TO AUG 14-2013


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DECLARATION

Jyoti Yadav hereby declare this Summer Training Report entitled Financing Small

Scale IndustriesSBI vis--vis other submitted in partial fulfillment of the

requirement of course the curriculum ofMASTER OF BUSINESS

DMINISTRATION. It is an original work and has not been submitted for the award

or similar title elsewhere.

ce: VaranasiJyoti Yadav

MBA 3rd Sem.


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ACKNOWLEDGEMENTWay to express the Gratitude.

If Practical knowledge carves and sharps the carrier of a person

practical experience polishes it and luster and brilliance to it.

The satisfaction that accompanies that the successful completion of any

task would be incomplete without the mention of people whose ceaseless

co-operation made it possible.

First of all I would like to Thanks to Mr. Dinesh Podar (Branch

Manager), SBI Bhelupur for his technical support & immense poll of

knowledge which he is so very graciously placed and my disposal. His

persistent helps & expertise in project works has been of immeasurable

help.

I completed the project to the best of my abilities & within available

time.

Jyoti Yadav

MBA 2nd Sem.


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INTRODUCTION

( Students Profile)

PERSONAL DETAILS

NAME : - JYOTI YADAVFATHER NAME : - A.K.YADAVMOTHER NAME : - PHULWASI YADAVDATE OF BIRTH : - 08/03/1989ADDRESS : - B-59 Ashok Nagar, Varanasi

EMAIL ID :- [email protected] OBJECTIVE: To work with that organization that gives me the

opportunity to proves myself so that it can bebeneficiary for both the organization as well as forme.

PROFESSIONAL QUALIFICATIONS

Pursuing M.B.A from Rajashri School OfManagement And Technology affiliated to G.B.T.U.


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With immense pleasure and deep sense of sincerity, I have completed my

Industrial training. It is an essential requirement for each and every student to

have some practical exposure towards real world situations. A systematized

practical experience to inculcate self confidence in a student so that they can

mentally prepare themselves for this competitive environment.

The purpose of training are:

1. Developing intellectual ability of student

2. Bring confidence

3. Developing skills

4. Modify Attitudes


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TABLE OF CONTENT

S.NO TOPIC PAGE

NO.

1. INTRODUCTION

I ndustrial Estate Ram Nagar, Chandaul i

State Bank of I ndia

F inancing The SSI

2. Impact of SSI on Other Bank

BOB

Union Bank of I ndia

2 Research Methodology

Collection of Data

3. Analysis and F inding

4. L imi tation of study

5. -Recommendation

6. Significance

7- Conclusion

8. Bibliography


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The industrial sector plays an important role in the economicgrowth of both developed and developing countries. The Small ScaleIndustrial (SSI) sector is very important for any country irrespectiveof the level of development because, SSI contributes maximumsocio economic benefits with low level of investment and results inemployment creation, income generation, poverty alleviation and

restricts migration of unemployed and underemployed workers intocities. It is also one that maximizes the utilization of local resourcesand results in innovations, new technology and is a pathway toemerging entrepreneurs. It is a starting point for industrial growth.However, systematic economic policies have not been designed forthe development of smallscale industries yet, in India. Thereforesmallscale industries face a lot of difficulties with regard tofinancial, marketing, cost of production, skilled labor and lack oftechnology.

Lack of access to credit is recognized as one of the most pressing

problems faced by small scale industries (SSI). Traditional financial

institutions are usually unwilling to lend money to small industries

because of high transaction costs. Thus successive governments

have frequently provided small and medium scale industrialists

with relatively cheap lines of credit. Most small industries currently


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in operation have faced the danger of running at a loss. This study

considered the effectiveness of the loan scheme (SMILE 1 & 11) and

the factors contributing to its effectiveness. The existing loan

schemes had been considered as a variable in the study. The study

was carried out in the Ramnagar Industrial Area, Varanasi District

in Uttar Pradesh. The study reveals that the SMILE loan scheme

has not been able to fulfill its already set objectives due to

inefficiency of the loan giving institutions, the small scale industries

and overall economic conditions. Institutions are not adequate

flexible and have not given the required amount of l have proper records,

knowledge and experience. From the perspective of the economy the shor

term profit and small loans

required by this sector involved high transaction costs and

profitability is limited owing to economic conditions.

Small and medium scale industries (SMIs) have been considered

essential for economic development not only in less developed

countries (LDCs) but also in more developed regions of the world.

Since they are seen as being more dynamic, innovative and have

higher labor absorptive capacities than their corporate

counterparts, the SMI sector has been the backbone of industrial

development in many developed countries. SMIs have played a

significant role in Varanasieconomics development. SMIs have been

estimated as providing 44% of total employment and have fulfilled

important functions such as being the foundation for local

entrepreneurship and innovation, as critical supporting industries

and as a service base for multinational companies (Williams, 1999).


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According to the Annual Survey of Industries undertaken by theDepartment of Census and Statistics, small firms(i.e.2529 personsengaged) accounted for 46% of total firms surveyed, while mediumfirms (i.e30199 persons engaged) accounted for 36% of total firmssurveyed. The SMI sector is often quoted as accounting for 65% of

industrial employment in India. According to the 1996 AnnualSurvey of Industries small firms accounted for only 3% of totalemployment and medium firms accounted for 17% of totalemployment. In terms of value of output small and medium firmsaccounted for 1% and 19% respectively, (Williams,1999). Theindustrial sector was relegated to the background during the colonialera. Then the focus on economic policy, in so far as one could talk ofan economic policy during this period, was export orientedagriculture and related trade and infrastructure facilities. During theperiod prior to the Second World War, the little

manufacturing activity there mainly in was in the processing of primaryproducts such as tea, rubber and coconut

for export. In addition, there were traditional cottage industries(Lakshman, 94). After political independence in 1948, economicpolicies were for some time, biased against industrial development.After independence, there was no policy to develop the SMIs sectorhowever between 1959 to 1977 private sector was encouraged tosetup small industries by offering incentives such as tax relief,depreciation allowances and credit facilities. Several institutionswere set up for development of SSI sector by government such asIndustrial Development Board (IDB), Department of Small


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Industries, National Institute of Small

State banks etc.

Small Scale industries encompass vast scope covering activities like

manufacturing, servicing, financing, construction, infrastructure

etc. In view of Government of Indians given to the small scale industries i

national economy more &

more small scale industries are to be set up in the years to come.

By contributing its increasing share employment & exports, small scale

industries also contribute to the economic development of the country.

However, these industries are

also plagued by the problems of raw material, finance, marketing,

underutilization of capacity, etc. cash has become a big problem for

small & even big businesses today. Lack of finance has driven many

small business units into bankruptcy. Unfortunately many small

businesses will become bankrupt because their owners have

neglected the principal of cash management which normally

determines their successes or failure. Cash is like oxygen to a

business. Small scale enterprises, given their small resources find it

difficult to have these own. Finance has been the important

resource to start & run an enterprise4because it facilitates the

entrepreneur to procure land, labour, material, machine& so on

from different parties to run his/her enterprise. Report of third allIndia censuses also clearly indicate that lack of demand& shortage

of working capital are the main reasons behind sickness/ incipient

sickness of registered & unregistered small scale industries.

Developing cash forecast is essential for new business because early


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sales do not generate enough cash to keep the company afloat.

Better financial management can lead the company ahead in

competition as well as it will help the entrepreneur to avoid the

situation of bankruptcy & industrial sickness. This paper is an

attempt to understand various financial techniques to help the

entrepreneurs to avoid the situation of industrial sickness

Finance is the key input of production distribution& development.

It is therefore aptly- blooddescribedindustry&of is as the prerequisite for

accelerating the process of industrial development. Especially in case of s

scale industries, finance is the key input

in growth & development. The financial investment of these small

units comes mainly from within; most of them invest their own

funds or borrowed funds. Much less comes from banks &

government channels. Small scale entrepreneurs face a lot of

problem while availing loan facility form commercial banks as well

as Government agencies. Financial institutions ask for a lot of

information& data, state financial corporation takes several months

to take decision on extending term loans small scale sector are not

in a position to offer guarantee required by the banking sector.

Even when small loans can be raised from Government agencies the

procedure is so cumbersome that most of the entrepreneurs, who

either are illiterate or semiliterate, hesitate to make use of thesefacilities. This makes matter very difficult for the small industrialist,

particularly when he is new to this way of life, & he has to deal with

both state financial corporation as well as banks. Quite often few

get fed up at this stage & give up.


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The word bank it derived from t banque that is French.

There was other of the opinion that the word bank derived from the Geword back me Italianized into banco. But whatever as Prof. Rramcha

Rao says. It w banking in Europe from middle ages.

Generally, banks do the business of money they take deposits of

moneys from client and give loan to the person who has need of

money. But in this age, for the convenience of customer, banks

provides some other services to their customer such as bankers

cheque, overdraft, internet banking, ATM facility, paying of bills,

credit card, telegraphic transfer, insurance, demat etc.

For a people, it is difficult to keep a very big amount of money in

his house safely. So, people save their money to bank. Bank gives

loan to the person who has need of money and gets higher interest

on it than the interest of deposit. The margin between the interest

of loan and interest of deposit is the income of bank.

SMEs FinancingThe Rising India

The only way out of the mire is that the Indian manufacturing

sector could be strengthened by the existing rural systems and


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making them self-sufficient. This could take place only by helping

Small and Medium Enterprises and the rural artisans (people with

innate skills and talents) in becoming effective and competitive

enough to face the future. A number of issues and business

practices of global players and markets can be observed, learnt and

adapted for ensuring competitiveness of Indian SMEs.

Let us take an anecdote, which is a part of the school days

about the meaning of domestic and global competition. It is

about two friends who while walking through a dense forest

suddenly hear the roar of a bear. One of them immediatelychanges his shoes that he is wearing in, to the one, he uses for

running. His friend asked him: If you think you can out beat the bea

The idea is not to beatThethemoral bear, of the but story is that the In

SME sector should be strong enough to out

beat the other players in the economy and not the competitionitself.

SMALL and MEDIUM enterprises (SMEs) play a catalytic role in the

development of any country. They are the engines of growth in

developing and transition economies. In India they account for a

significant proportion in manufacturing, exports and employment,

and are major contributors to GDP.

Considering the growth potential of Indian SMEs, the Government

of India has asked public sector banks to achieve a minimum 20

per cent year-on-year growth in the funding of SMEs that will lead

to double the flow of credit to the sector from Rs 7,000 crore in


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2004-2005 to Rs.35,000 crore by 2009-2010. A small-scale unit is

defined as one having original investment in plant and machinery

not exceeding Rs 1 crore. While recognizing the needs for larger

investment in some of the more important segments of small scale

industries (SSIs), the Government has enhanced this to Rs 5 crore

for specified industries.

The Government felt that a separate category of medium enterprises

(MEs) needs to be recognized and, accordingly, the new policy

package clearly defined the medium enterprises as those units

having investment in plant and machinery above the small-scale

industry limit and up to Rs 10 crore, as recommended by the

Working Group on Flow of Credit to the SSI sector, headed by Mr A.

S. Ganguly.


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The Importance of Small and Medium Enterprises (SMEs) in any

economy cannot be overlooked as they form a major chunk in the

economic activity of nations. They play a key role in

industrialization of a developing country like India.

They have unique advantages due to:-

their size

their comparatively-capital ratio high labor

need a shorter gestation period

focus ivelyonsmallerrelatmarkets

need lower investments ensure a more equitable distribute

facilitate an effective mobilization skills which might othe

remain unutilized and

Stimulate theustrialgrowthentrepreneurshipofind.

According to a UNIDO report, supports for SMEs are generallybased on three assumptions.

it sustains a broad and diversified employment and thus benefit

country as a whole

second, MEa sectorstrongwillnot Submerge without support

from the state, but they suffer disadvantages in the markets

because of their size

the programs aimed at smallest justified more in terms of their

welfare impact than their economic efficiency.


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Indian SME at a Glance

In India, SME sector accounts for around 95% of the industrial

units, 40% of the value added in the manufacturing sector output,

34% of exports and provides direct employment to 20 million

persons in around 3.6 million registered SME units. The SME

sector in India contributes to about -7% of

03. Now, the question is, Can it overtake the invasion of foreign

companies through their innovative, quality, affordable/reasonable

and readily available products? Of this in Ramnagar, Varanasi,

SME Sector accounts to 10% of the industrial units.

In developing countries like India, making the SMEs more

competitive is particularly pressing as trade liberalization and

deregulations increases the competitive pressures and reduces the

direct subsidies and protection that Governments offer to SMEs. If

our SMEs are to be competitive enough to withstand and fight back

the foreign MNC products, they have to be nurtured. According to

Porter, the only meaningful concept ofnational level is Productivity, wh

is the value of output produced by a unit of labor or capital. Productivity

turn depends

on both the quality and features of products (which determines the

prices that they can command) and the efficiency with which they

can be produced. Productivity is the prim long-run standard of living; it is

root cause of national per capita income. Further, to find awns economy

whole but on specific industries and industry segments. We must unders

how and why commercially viable


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skills and technology are created, which can only be fully understood at t

level of particular i

International trade and foreign investment can both improve a nations

productivity as well as there industries to the test of international standar

of productivity. An

industry will lose out if its productivity is not sufficiently higher

than its rivals to offset any advantage in the local wage rates. As

wage rates in India are sufficiently less to attract multi-nationals,

the only way is to increase the productivity of local small industries.

This means, the increase in the productivity of labor i.e. humanresources, the productivity of capital and that of the process,

which in turn relates to the use of technology that yields quality

and innovative products.

According to Ex-Commerce and Industry Minister and President of

the National Productivity Council, Mr. Arun Jaitley at the 47th

meeting of NPC, It has become so comp of the labor, for reasons of higheproductivity, has now shifted to

female labor. If we look at other Asian economies, Bangladesh or

Srilanka, Cambodia or Myanmar, we find that in manufacturing, it

is female labor, which is being encouraged because they have been

found more disciplined and hence with h

As every coin has two sides, similarly, even SME financing has a

share in the overall financing. The following are the issues of SME

financing:

They are unable to capture market require large production faciliti

and thus could not achieve


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economies of scale, homogenous standards and regular

supply.

They are experiencing difficulties as raw materials, machinery a

equipments, finance, consulting services, new technology, highly ski

labor etc.

Small size hinders the internalizes

market research, market intelligence, supply chain, technology

innovation, training, and division of labor that impedes

productivity.

Emphasis to preserve narrow proof

SMEs myopic about the innovative improvements to their

product and processes and to capture new markets.

They are unable to compete with product quality, range

products, marketing abilities and

cost.

And most importantly, absence of a and other services thosavailable to raise money and

sustain the business.

Absence of Infrastructure, quality and limited option

opportunities to widen the business.

Poor IT and Knowledge infrastructure

To overcome all these difficulties, Indian SMEs and rural artisans

deserves all the policy support the Government can offer. What they

need is, not protection but institutional support to fund

modernization and technology up gradation, infrastructure support


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and adequate working capital finance. Also they have to have

professional inputs and knowledge about various happenings in

their own industries in and around the country. This brings in the

concept of SME networks and clusters that stimulate innovative

and competitive SMEs. These concepts (are not something new, but

can be traced back to Alfred Marshal districts in Britain in 1890s) essenti

bring together various stakeholders like technology providers, labor force,

financing arms, consultants, marketing arms, and others, for a common g

that

will help in enhancing the strength of SMEs.

THE Indian SME (small and medium enterprise) market seems to be

emerging a promising hunting ground for banks and financial

institutions because it poised for tremendous growth. As the access

of SMEs to capital markets is very limited, they largely depend on

borrowed funds from banks and financial institutions. In majority

of the economies, while the investment credit to SMEs was being

provided by financial institutions, commercial banks extended

working capital. In the recent past, with growing demand for

universal banking services, the term loan and working capital are

becoming available from the same source. Besides the traditional

needs of finance for asset creation and working capital, the

changing global environment has generated demand forintroduction of new financial and support services by SMEs.


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Brief Industrial Profile of Chandauli District

1. General Characteristics of the District

Chandauli district derives its name from Chandra Sah, a Barhaulia

Rajput who built the fort in the district. It was carved out from

Varanasi district in 1997. Chandauli town is the districtheadquarters. Chandauli district is a part of Varanasi Division.

Mughal sarai, a city in the district has the busiest rail station in the

North Eastern Railways. The district has great natural beauty in the

form of Chandraprabha Sanctuary and many waterfalls which

include Devdari and Rajdari.

District is not well developed particularly from view point of

infrastructure and education. However, situation is slowly improving.

Agriculture is the main occupation of the people of this district and

rice and wheat are the main crops.

Location & Geographical Area.

The District is located2535inN 2456longitut 8114 to 8424 E latitude

d south east of Varanasi. It is bonded on east by Bihar State,

on the north and north east by Ghazipur District, on the South by

Sonebhadra District, on the South -West by Mirzapur and on the

North- West by Varanasi district. River Ganga separates the district

from the districts of Varanasi


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and Ghazipur. Total geographical area of the district is 2541 Sq. Km

1.2 Topography

On the basis of geology, soils and topology, the distri ct is subdividedin the following three regions:

I. Chakia Plateau: The region is comprised of southern part of

Chakia tahsil. The 100 meter contour separates the region from

Chandauli Plain. It is hilly tract with dissected surface.

II. Chandauli Plain: The region comprises parts of Chandauli,

Sakaldiha and Chakia Tahsil.The area under Chandauli tahsil iscomparatively low which causes water logging during rainy season.

Major part of the region is devoid of streams.

III. Ganga Khadar: It is narrow belt along the Ganga river extending

from one end of the district to the other end. Surface is low lying and

subject to inundation during flood. Approach of flood water delimits

the boundary of this region.

Availability of Minerals.

Only Sand is available as a minor mineral in the district Chandauliwhich is used for construction of buildings.

PRODUCTION OF MINERAL 2010 -11

S.NO. NAME OF MINERAL PRODUCTION IN CUBIC METER

2010-2011

MAJOR MINERAL

1. Nil -


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MINOR

1. Sand 84000

Source: - Dept. of Mines & Geology, Chandauli

1.4 FOREST

According to Revenue Department, the area under forest is 77,400

Hectare and almost ninety nine percent of it is found in Naugarh

C.D. block of Chakia tahsil. There are forests on ridges offlat hill tops

and foot hills but trees found in this region are generally of poor

quality. Salai, Piar, Mahuwa, Tendu trees apart from usual trees are

mainly found in the district. Dry green vegetation can be seen on the

plateau region.

The Naugarh C.D. block is covered with dense forest in which trees

of Sakhu, Sagaun, Sheesham, Mahuwa, Aonla etc. are mostly found.

Wood obtained from these trees is very useful for building

construction, playing materials and for making wooden toys. The

wax and honey is received f rom forest area in large quantity. Besides

these, the Tendu leaves are also found in huge quantity, which is

exported toother district also for making Beed

1.5 Administrative set up.

The deputy commissioner heads administration of Chandauli

district. He is top administrator and is responsible for good

administration and planned development of the district. The district

has been divided into three tehsils and nine blocks. Block

development officer is the in- charge of the block. To maintain thegeneral administration of the district there is one additional District


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Magistrate. Administrative set up of the district also includes three

Sub-Divisional Magistrates, one each of the Tehsils.

District at a glance


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Existing Status of Industrial Areas in the District

Chandauli.

. Medium Scale Enterprises

3.5.1 List of the units in Chandauli & Near By Area

i. M/s Gharana Foods Pvt. Ltd. Karwat, Dandi, Chandauli.

ii. M/s M. P. Biscuit Pvt. Ltd. B -18, Indl.. area, Ramnagar,Chandauli.

iii. M/s. Alaknanda Cement Pvt. Ltd. Indl.area Ramnagar,Chandauli.

iv. M/s. Govt. Printing Press, Indl. Area Ramnagar, Chandauli.

v. M/s. S. A. Iron & Allied Pvt. Ltd. Jivnathpur, Chandauli.

vi. M/s. Ganga Pulp & Paper Pvt. Ltd. A -6, Indl. Area Ramnagar,Chandauli.

vii. M/s. R.A.S. Polytex Pvt. Ltd. E -11, Indl. Area Ramnagar,Chandauli.

3.5.2 Major Exportable Item - NIL

3.6 Potential for Development of MSMEs

To support the agriculture sector there is a strong need to developindustrial sector, which can

enhance the demands for raw materials for processing industries.The main processing industries

operating in this district are:

1. Handicrafts industry

2. Khadi and handlooms

3. Agriculture and livestock based industries


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4. Forest produce based

5. Fibre based other than handlooms

6. Chemical and allied product based

7. Minerals based general engineering industry

Cottage industry, trade and services have traditionally been theother important sector

contributing to the economy of the district, as has inwardremittances by workers, both inland

and overseas. Silk sarees weaving, electric fan manufacturing, fruitpreservation, small wooden

toy making etc have been traditionally undertaken. Most of theseactivities are in a state decline

due to competition of similar products at much cheaper rates.

3.6.1 Potentials areas for service industry

i. Photostat/Xerox Unit.

ii. Repairing & Servicing of Two Wheelers/ Modern Garage.

11

iii. Dhaba.

iv. Colour Photo Laboratories.

v. Clinic/ Laborarotries for Pathological Testing.

vi. Carpentry Units.

vii. Automobile Body Building Unit.

viii. Hotels /Restaurants

ix. Tourism Centres.


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x. Beauty Parlour.

xi. Mobile repairing.

xii. Photo Framing.

xiii. Coal Depo.

3.6.2 Potential for new MSMEs

i. Fruit Beverages

ii. Red Brick Kiln (Fixed Chimney Type)

iii. Steel Fabrication

iv.Leather Boots & Shoes

v. Engineering Workshop

vi. Modern Rice Mill

vii. Cold Storage.

viii. Mineral Water

ix. Agarbati Sticks Mfg.

x. Stone

xi. Agricultural Implements

xii. Ceramic Industry

xiii. Plastic Products

xiv. Bread & Biscuit

xv. Dal Mills

xvi. Packaging Material

xvii. Aaurvedic/Herbal Medicine

xviii. Roller flour mills


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xix.Jam, Jellies & Pickles.

xx. Wooden Doors and Furniture.

Existing Clusters of Micro & Small Enterprises

There is no any Cluster is existing in the Chandauli District.

4.1 DETAIL OF MAJOR CLUSTERS NIL

4.1.1 Manufacturing Sector NIL

4.1.2 Service Sector NIL

4.2Details for Identified cluster NIL

5. General issues raised by industry association during the course ofmeeting

General issues raised by industry association during the course of

meeting i.e. Udyog Bandhu Meeting, Chandauli are as under:

1. Maintenance of industrial area (Road and Drainage) is not well.

2. Lack of Electricity.

3. Health & Safety.

4. Lack of awareness about Housekeeping

5. Bankers avoid accepting the cases under CGTMSE especially for

the new entrepreneurs and insist for the collateral security.


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The origin of the State Bank of India goes back to the first decade of

the nineteenth century with the establishment of the Bank of

Calcutta in Calcutta on 2 June 1806. Three years later the bank

received its charter and was re-designed as the Bank of Bengal (2

January 1809). A unique institution, it was the first joint-stock bank

of British India sponsored by the Government of Bengal. The Bank of

Bombay (15 April 1840) and the Bank of Madras (1 July 1843)

followed the Bank of Bengal. These three banks remained at the apex

of modern banking in India till their amalgamation as the Imperial

Bank of India on 27 January 1921.

Primarily Anglo-Indian creations, the three presidency banks came

into existence either as a result of the compulsions of imperial

finance or by the felt needs of local European commerce and were

not imposed from outside in an arbitrary manner to modernise

India's economy. Their evolution was, however, shaped by ideas

culled from similar developments in Europe and England, and was

influenced by changes occurring in the structure of both the local

trading environment and those in the relations of the Indian economy

to the economy of Europe and the global economic framework.


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Bank of Bengal H.O.

Establishment

The establishment of the Bank of Bengal marked the advent of

limited liability, joint-stock banking in India. So was the associated

innovation in banking, viz. the decision to allow the Bank of Bengal

to issue notes, which would be accepted for payment of public

revenues within a restricted geographical area. This right of note

issue was very valuable not only for the Bank of Bengal but also its

two siblings, the Banks of Bombay and Madras. It meant an

accretion to the capital of the banks, a capital on which the

proprietors did not have to pay any interest. The concept of deposit

banking was also an innovation because the practice of accepting

money for safekeeping (and in some cases, even investment on behalf

of the clients) by the indigenous bankers had not spread as a general

habit in most parts of India. But, for a long time, and especially up to


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the time that the three presidency banks had a right of note issue,

bank notes and government balances made up the bulk of the

invertible resources of the banks.

The three banks were governed by royal charters, which were revised

from time to time. Each charter provided for a share capital, four-

fifth of which were privately subscribed and the rest owned by the

provincial government. The members of the board of directors, which

managed the affairs of each bank, were mostly proprietary directors

representing the large European managing agency houses in India.

The rest were government nominees, invariably civil servants, one ofwhom was elected as the president of the board.

Group Photograph of Central Board (1921)


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First Five Year Plan

In 1951, when the First Five Year Plan was launched, the

development of rural India was given the highest priority. The

commercial banks of the country including the Imperial Bank of

India had till then confined their operations to the urban sector and

were not equipped to respond to the emergent needs of economic

regeneration of the rural areas. In order, therefore, to serve the

economy in general and the rural sector in particular, the All India

Rural Credit Survey Committee recommended the creation of a state-

partnered and state-sponsored bank by taking over the Imperial

Bank of India, and integrating with it, the former state-owned or

state-associate banks. An act was accordingly passed in Parliament

in May 1955 and the State Bank of India was constituted on 1 July

1955. More than a quarter of the resources of the Indian banking

system thus passed under the direct control of the State. Later, the

State Bank of India (Subsidiary Banks) Act was passed in 1959,enabling the State Bank of India to take over eight former State-

associated banks as its subsidiaries (later named Associates).

The State Bank of India was thus born with a new sense of social

purpose aided by the 480 offices comprising branches, sub offices

and three Local Head Offices inherited from the Imperial Bank. The

concept of banking as mere repositories of the community's savings

and lenders to creditworthy parties was soon to give way to the

concept of purposeful banking sub serving the growing and

diversified financial needs of planned economic development. The


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State Bank of India was destined to act as the pacesetter in this

respect and lead the Indian banking system into the exciting field of

national development

The Bank is actively involved since 1973 in non-profit activity called

Community Services Banking. All SBI branches and administrative

offices throughout the country sponsor and participate in large

number of welfare activities and social causes. SBI business is more

than banking because we touch the lives of people anywhere in many

ways. SBI commitment to nation-building is complete &

comprehensive.

ASSOCIATE BANKS

State Bank of India has the following seven Associate Banks (ABs)

with controlling interest ranging from 75% to 100%.

1.State Bank of Bikaner and Jaipur (SBBJ)

2.State Bank of Hyderabad (SBH)

3.State Bank of Indore (SBIr)

4.State Bank of Mysore (SBM)

5.State Bank of Patiala (SBP)

6.State Bank of Saurashtra (SBS)

7.State Bank of Travancore (SBT)

As on 31st march, 2013 the financial information of State bank

of India is given as under


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Financial RS (in crore)

Details

Capital 125,033.02

Borrowings203,723.20

Deposits 1,627,402.61

Investments 519,393.19

Advances 1,392,608.03

Net Profit 18,322.99

Source : balance sheet and profit and loss accounts schedule of state bank of

India from annual reports of year ending 31st march, 2013

General Shareholder Information

Number of shareholders as on 30.9.2004 was 5.61 lacs. Theshareholding pattern was as under.

Reserve Bank of India 60.15%

Non-residents (FIIs, OCBs, NRIs) 18.52%

Banks, FIs including insurance companies 11.01%

Mutual funds/UTI 4.70%

Domestic companies/private corporate 1.54%bodies/trusts

Resident individuals 4.08 %


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DomesticChart Title

Residentcompanies/privat individuals

e corporate 4%bodies/trusts Mutual funds/UTI

2% 5%

Banks, FIsincludinginsurancecompanies Reserve Bank of

11% India60%

Non-residents(FIIs, OCBs,

NRIs)18%

MISSION

To retain the Banks Position a

Financial Services Group, with world class standards

and significant Global business, committed to

excellence in customer, shareholder and employee

satisfaction and to play a leading role in the

expanding and diversifying financial services sectorwhile continuing emphasis, on its development banking

role.

DR. KALAM TALKS ABOUT SBI PLAN AND MISSON


43/98

EW DELHI : President A.P.J. Abdul Kalam on Tuesday chalked out aseven-point action plan for the State Bank of India (SBI) while urgingthe country's premier bank to create a Rs. 5,000-crore venturecapital fund and hike lending to the farm sector.

In his address at the SBI's Bicentennial Celebrations here, Mr. Kalamnoted that within the next three years, the bank should raise thecredit to the farm and agro-processing sector from 10 to 20 per centof its total loan disbursal.

Agricultural growth, he said, was lagging behind while sectors suchas manufacturing and services were showing robust increases. Ahigher credit disbursal, he said, was essential to hike farm growth to

over four per cent as it was a vital requirement for increasing theoverall Gross Domestic Product growth to 10 per cent.

Unveiling his plan, Mr. Kalam asked the SBI to allocate Rs. 5,000crores as venture capital from 2007-08 for the purposes of fundinginnovative scientists and technologists for speedier societaltransformation. This would include the development of ICT products,software development and software services.

The President also advised the bank to create and nurture five ruraldevelopment projects, on the lines of the bio-fuel project and seaweedproject, as it had the potential to provide employment to 50 lakhpersons in the rural areas at the least.

Mr. Kalam also asked the SBI to adopt and innovatively fund at leastone lakh sick units in the small-scale sector to infuse the latesttechnology and turn them into profitable ventures.

Another sector with great potential, Mr. Kalam said, was medicaltourism in which the bank could extend funds at competitive interestrates for setting up corporate hospitals which would also serve therural areas. Likewise, yet another sector for the bank's participation,he said, was infrastructure development, including provision of 50


44/98

million quality houses with basic infrastructure in rural areas inassociation with state and Central entities.

Turning to the plight of villagers caught in the ``vicious cycle ofborrowing,'' Mr. Kalam asked the SBI to adopt a ``villager-friendly''

banking system to free them from the clutches of money-lenders.

Mr. Kalam also lamented that hassle-free loans were being extendedby the SBI to students of only the best engineering colleges, medicalcolleges and business schools. ``I would request the SBI to examinethe possibility of providing loans to students who would like topursue science and commerce as a career," he said.

Besides, ways should be found to fund the education of those

meritorious students who could not get admission to top engineering,

medical and B-schools owing to stringent competition, Mr. Kalam

said.


45/98

An entrepreneur requires a continuous flow of funds not only for

setting up of his/ her business, but also for successful operation as

well as regular upgradation/ modernisation of the industrial unit.

To meet this requirement, the Government (both at the Central and

State level) has been undertaking several steps like setting up ofbanks and financial institutions; formulating various policies and

schemes, etc. All such measures are specifically focussed towards

the promotion and development of small and medium enterprises.

The public sector banks are the major source of financial assistance

to the industrial sector. They extend credit support to the firms in

the form of loans, advances, discounting bills, project financing,

term loans, export finance, etc. Some of the major examples of such

banks are:-


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1. State Bank of India (SBI) providesa wide range of financial

products and services that can cater to any business or market

requirement. It deploys multiple channels to deliver integrated

solutions for all financial challenges faced by the corporate

universe. Its various funding schemes are:-

Working capital finance,extended to all segmentsofindustries and services sector.

Corporate term loans tosupport capital expenditures forsetting up new ventures as also for expansion, renovation,

etc.

Deferred payment guarantees to support purchase

ofcapital equipments.

Project finance

Structured Finance

The bank also provides financial assistance to agriculturists

through a network of rural and semi-urban branches. These

specialized branches have been set up in different parts of the
http://business.gov.in/outerwin.php?id=http://www.sbi.co.in/http://business.gov.in/outerwin.php?id=http://www.sbi.co.in/http://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.sbi.co.in/


47/98

country exclusively for the development of agriculture through

credit deployment. Their schemes cover a wide range of

agricultural activities like crop loan, finance to horticulture,

farm mechanization schemes, land development schemes,

minor irrigation projects, agricultural term loans,etc.

SBI offers SME EASY LOAN AGAINST PROPERTY

SBI offers BEST DEAL FOR DEALERS at 9.70%* p.a. interest-

(lowest Rate of Interest)

Now SBI offers POINT OF SALES (POS) LINKED

OVERDRAFT facility

SBI Offers POWER POS Current Account to the customers.

SME Insta Deposit Card launched for Cash

Credit/Current Account customers.
http://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/viewsection.jsp?lang=0&id=0,8,66,148http://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/viewsection.jsp?lang=0&id=0,8,66,148http://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/user.htmhttp://business.gov.in/outerwin.php?id=http://www.statebankofindia.com/viewsection.jsp?lang=0&id=0,8,66,148


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SBI presents SME EASY LOAN AGAINST PROPERTY. Now use

the power of your property for business

SBI presents SME Easy Loan Against Property: Now use the power of

your property for business.For more details please go to loan

products link or contact your nearest branch

SBI offers BEST DEAL FOR DEALERS at 9.70%* p.a. interest-

(lowest Rate of Interest)

SBI now offers dealer financing at 9.70% p.a. - Lowest rate of

interest (SBI Base Rate at 9.70%), 100% funding and convenience of

banking under Electronic Dealer Finance Scheme (e-DFS

Now SBI offers POINT OF SALES (POS) LINKED OVERDRAFTfacility

POS customers can now avail hassle free overdraft facility on

their POS linked current accounts

SBI Offers POWER POS Current Account to the customers.

Customers who avail our Point of Sales (POS) terminals are eligible

to open Power POS Current Accounts. This Current Account is a zero

balance account which offers various facilities

SME Insta Deposit Card launched for Cash Credit/Current

Account customers.

Customers can now deposit cash in the

Insta Deposit Card and State Bank Business Debit Card at

Cash deposit Machines installed at our branches
https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1https://sbiforsme.sbi.co.in/SME/announcementDetails.htm?execution=e3s1


49/98

A WORD ABOUT SBI-CARD

A word about SBI card

SBI Segment : Small business credit card (SBI credit card)

Preamble :

Small business units, retail traders, artisans, village

industries, small-scale industrial units and tiny units,

professionals and self employed persons etc., contribute

significantly to the growth of our economy.The entrepreneur

himself manages many of the units. Very often, these entrepreneurs

complain of procedural delay in sanctions and renewal of limits. They

also find it difficult to cope with the demands for audited balance

sheet and other statements sought by the bank from time to time for

availing credit facilities. With a view to providing hassle free financial

supports to the above categories of entrepreneurs who have shown

commitment to run the unit successfully and who are dealing with

the banks for last two years satisfactorily, new and friendly credit

product namely small business credit card scheme is designed.

Under the scheme, cumbersome procedural aspects relating to

reviews and renewals, submission of balance sheet, stock statementsand other statements are done with credit delivery made simple and

easy.


50/98

Purpose :

To meet the credit requirements of small business units, industrial

unit, retail trader, artisan, Small Scale Industry (SSI) and tiny units.

Eligibility :

A.Customers of the following segments with a satisfactory track

record for the last two years enjoying credit facilities.

Small industrial units (SSI and tiny units including artisans)

Small retail traders (Under SBF)

Professional and self employed persons

Small business enterprise

B.Units who do not enjoy credit limit with us/other banks at present

with excellent performance and credential may be considered.

Quantum of loan :

Loan up to Rs. 5 Lakh can be sanctioned to eligible persons.

Assessment :

The small business credit card limit can be fixed as follows :

For small business, retail trader etc. 20% of the annualturnover declared for tax purpose or last twelve months

turnover in the operative accounts, whichever is higher.


51/98

In respect of parties with good track record, where sales tax returns

are not available, the credit limits may be decided taking into

consideration the actual turnover in the accounts during the last

two years.

For professionals and self employed persons, 50% of their

gross annual income as per IT return shall be considered as the

limit for issuing the SBI credit card.

For small scale industrial units, tiny sector units the assessment

norms in vogue as per the Nayak Committee recommendations

would continue.

Validity :

Credit card limit will be valid for a period of three years,

subject to satisfactory conduct of the accounts.

Annual review will be done based on conduct/operations of

the A/cs. A major portion of the sales turnover should havebeen routed through the accounts as revealed by the credit

summations.

Repayment :

The working capital advance may be continued subject to that

review every year provided the credit summations in the accountis not less than 50% of the projected sales turnover. If the credit

summations is less than 50% of projected sales turnover. The

outstanding as on the due date of review should be made

repayable in suitable monthly installments.


52/98

The term loan is repayable in suitable installments with in a

maximum period of five years.

In case of composite loans, only the term loan is repayable in

installments up to a maximum period of five years.

Interest rate :

As per extent instructions issued from time to time relating the

market segment.

Refinance :

No refinance is to be claim from SIDBI

Security :

Primary : Hypothecation of the stock in trade

receivables,machinery, office equipment.

Collateral :

Under SSI-No collateral security as per existing guidelines of RBI.

User SBF :

Up to Rs. 25000/- No collateral security.

Over Rs. 25000/- charge over movable/immovable propertyor third party granted.

However, in case of the excellent track record, sanctioning

authority may waive collateral requirement.


53/98

Margins :

Up to Rs. 25000/- - NIL

Rs. 25001/- to Rs. 5,00,000/- - 20%

Documentation :

Documents as per extant instructions.

Credit Card - A Convenient Banking Product :

The credit card is a hassle free convenient banking productaimed at simplifying the credit delivery mechanism.

Cumbersome procedural aspects relating to reviews and renewals,

submission of stock statement, balance sheet and other statements

are done away with. The credit limit will be worked as detail above.

Small business credit card

Card No.

Name

Account No.

Tel. No.

Limit Rs.

Date of issue

Valid upto

.. (Branch Code)

Signature of the Brach Manager Card holders

Photograph with signature


54/98

The borrower would be issued a photo card indicating sanctioned

limit and validity of the limit (sample card)

Insurance :

Fixed assets/stock pledged/hypothecated to the bank be fully

insured at least to the extent of the bank interests.

Bank may waive insurance of assets for equipment against

the fire and other risk up to Rs.25000/-

Cover under credit guarantee scheme :

All eligible loan accounts sanctioned for small scale industries

(other than services) would qualify for cover under CGTFSI scheme

(presently the scheme has been introduce in five circles onpilot basis

viz. New Delhi, Chandigarh, Lucknow, Patna & Hydrabad).

Operation :

Small business credit card accounts should be maintained in a

separate ledger.

Cheque book should be issued and marked as small

business credit card account.

Pass book should be issued for mall business credit card

holders.

Stock statement waived.

Submission of audited balance sheet waived.

Borrower would be issued a small business credit card with

photograph thereon. Cost of photograph to be borne by banks.


55/98

IRAC norms would be applicable.

Brief opinion report should be recorded. Marked inquiries

should be made and recorded in the opinion report and singed

by the field officer/cash officer or officers not below that rank.

Units within a radius of 5 kilometers may be covered intensively

for the issue of credit card. This condition may be waived for such

of those units already in the book of the branch.

Inspections :

Half-yearly inspection/monitoring to ensure the end user funds.

Sanction :

Required loan may be sanctioned with in a week after receipt of

detailed information.

Control return after sanction may be sent to next

higher authority for approval .

Scoring Model :

Loan would be sanctioned up to Rs. 5,00,000/- based on the

simplified scoring model as given in annexure- II. Those who

are scoring less than 60% would not qualify for the loan.

Rationale :

New schemes for hassle free credit facilities to small borrower.

Automatic Teller Machine (ATM)


56/98

An ATM (Automatic Teller Machine) card is useful to a card

holder as it helps him to withdraw cash from banks even

when they are closed.This can be done by inserting the card in

the ATMinstalled at various banks locations.

State Bank Cash Plus CARD

Signature Panel.

Magnetic Stripe

Features of State Bank Cash Plus Card

State Bank Cash Plus Card having the 19 digit.

Name of the card holders mention there on it.

In case of State Bank Cash Plus Card, there is no expiry period

but for the old card, the date after which your card needs to be

renewed is the last day of the month indicated on your card.

Signature panel on which you must sign as soon as you car

identifies the card as your State Bank Card Plus Card.

The magnetic stripe, which contains encoded information.

ATM card possess pincode which having the 4 digit.

Use of State Bank Cash Plus Card

We use our State Bank Cash Plus Card for cash

withdrawal from ATMs.

We use it for making the payments for purchase made at

the merchant establishments


57/98

BANK OF BARODA

HISTORY

1969

- The Bank was brought into existence by a Ordinance issue on 19th July, by

the Central Government. The Bank is a Government of India Undertaking

and carries on all types of banking business including foreign exchange. The

Ordinance was replaced by the Banking Companies (Acquisition and Trasfer

of Undertaking) Act, 1969.

- Besides managing public issues and giving underwriting support, the Bank

established a `Non-resident Portfolio Management Consultancy Cell'. Due to

closure of 2 branches in U.K. and 1 branch in UAE, non-operative branch in

Bangladesh was not taken into account.

1970

- Income-Tax consultancy services was set-up in September to assist itsconstituents in the filing of income returns.

- Bank of Baroda (U.K.) Nominees Ltd., London is a subsidiary of the Bank.

Bob Fiscal Services Ltd., is also a subsidiary of the Bank which handles

functions such as merchant banking, equipment leasing, investment

banking, inter-corporate deposit, etc. Bank of Baroda (Kenya) Ltd., Kenya is

subsidiary of the Bank.


58/98

1986

- The bank sponsored and set-up five RRBs taking the total number of RRBsto 19.

- Rs 16 crores capital subscribed for by Government.

1988

- The erstwhile `Trades Bank Ltd.' was amalgamated with the Bank.

- Rs 14 crores capital subscribed for by Govt. Rs 5.5 crore reimbursementreceived from World Bank.

1989

- Rs 891,47,850 capital subscribed for by Govt.

1990

- Rs 2704,41,129 capital subscribed for by Govt.


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1991

- Rs. 11,491.97 lakhs capital subscribed for by Govt.

1992

- Rs. 9158.43 lakhs capital subscribed for by Govt.

1993

- Rs. 409,34,000 capital subscribed for by Govt.

- The bank received `in principle' approval from RBI to set up a separatesubsidiary for its credit card business.

- The bank had established a new department to act as custodian of local

shares issued by Indian companies who came out with Euro Issues

(GDRs/ADRs) to raise funds from abroad. With this in view, the bank

entered into an agreement with Bank of New York, who act as Depository

for issue of GDRs by companies.

- The bank was associated as lead manager/co-manager in respect of 142

issues involving a sum of Rs 3411 crores. The bank was activity considering

setting up of a separate subsidiary to undertake all types of merchant

banking activities.

1994

- Rs. 1,63,30,000 capital subscribed for by Govt.

1995

- Rs 163,93,59,000 capital from reserve fund. 1996


60/98

- The Bank devised new products, two new deposit schemes `BOB

SUVIDHA', `BOB CAPITAL GAINS EXEMPTION DEPOSIT' was launched

to suit the savings requirements of individuals, HUF, Association of

persuing, firms and companies.

- The bank initiated several measures to bring qualitative improvement in the

area of credit. A fast track systems for processing credit proposals of A+ & A

rated corporate client was introduced. In addition, schemes to increase

credit fluid sectors like leasing, hire purchase, advances against shares, Can

Loan Schemes etc. were formulated and guidelines were issued for

increased lending to infrastructure projects.

- The Company lead managed 1 public and 5 rights issues aggregating Rs

40.541 lakhs through BOB Capital Markets Ltd. BOB Housing Finance Ltd.

made a fresh disbursements of Rs 21 crores. Total cumulative loans

sanctioned reached Rs 127 crores.

- 3810,00,000 No. of Equity shares returned to Govt. of India. 1000,00,000No. of Equity shares issued through prospectus to the public at a prem. of

Rs 75 per share.


61/98

1997

- Bank of Baroda (BoB) has received permission from the Reserve Bank of

India to open a branch at Durban in South Africa. BoB proposes to start

operations in the country soon after it receives a banking licence from theSouth African Reserve Bank (SARB).

- Bank of Baroda (BoB) proposes to undertake a survey of West Bengal,

Sikkim and North-Eastern States to explore business opportunities and also

for setting up new branches.

- Bank of Baroda (BoB) proposes to wholly own the 120 million HK dollars

IOB Bank in Hong Kong by increasing its stake from 33 per cent to 100 per

cent to make its presence felt in the Far East.

- Bank of Baroda (BoB) plans to have an alliance with a foreign bank for

merchant banking. The proposed venture would manage external

commercial borrowings (ECBs) by Indian corporates and handle

disinvestment programmes of public sector undertakings.

- Bobcards Ltd, a wholly owned subsidiary of Bank of Baroda, has achieved

a 40 per cent growth in profit before tax in the first half year ended

September, 1997.

- Bank of Baroda's New York branch has received the highest 1 rating from

the US Federal Reserve. This is for the first time that the US Fed has given

the highest rating to any Indian bank branch operating in New York.

1998

- Bank of Baroda has become the first public sector bank to implement the

autonomy package announced by the ministry of finance in November,


62/98

1997.

- BoBGLOBAL, the first Indian credit card introduced for international use,

with VISA tie-up, is already being accepted by over ten million

establishments in over 60 countries.

- The Bank of Baroda (BoB) plans to restructure its international operations,

particularly in Europe and the United States (US) ahead of the launch of the

euro, the European Union's single currency unit.

- Bobcards Ltd, the wholly owned subsidiary of Bank of Baroda is looking forpartners to enter into a joint venture.

- Bank of Baroda is weighting the option of setting up a separate

subsidiary dedicated exclusively to its highly profitable international

business.

- Bank of Baroda has the second largest resource base in the country afterState Bank of India.

- Bank of Baroda (BoB) has revised the rate of interest on foreign currencynon-resident (banks) deposits for various maturities for different currencies

effective October 26.

- Bank of Baroda has revised the rate of interest on FNCR (b) deposits for

various maturities for different currencies with effect from November 30.


63/98

1999

- Bank of Baroda (BoB) will co-ordinate with the finance ministry to set up adebt recovery tribunal (DRT) in Mumbai.

- Bank of Baroda (BoB) has revised the rate of interest on its FCNR (B)

deposits for various maturities and different currencies with effect from

February 1.

- Rating agency Icra has assigned the highest rating, LAAA (LAAA), to

Rs.600 crore long-term unsecured subordinated bonds of Bank of Baroda

(BoB). The public sector bank is coming out with the bond issue to increase

its tier II capital.

- Public sector Bank of Baroda has been designated as a clearing bank

for castor oil trading in the future, which will be launched by the

Bombay Oilseeds and Oils Exchange (BOOE) on May 10.

- Bank of Baroda has bought out the 49 per cent shareholding of

Government of Uganda in Bank of Baroda (Uganda) Ltd, thus making it afully-owned subsidiary of Bank of Baroda.

- Bank of Baroda (BOB) is keen to diversify into the insurance sector,

where the focus of its activities will be the rural population. BOB has

proposed to enter health and general insurance where it plans to

mainly target the rural areas.

- Bank of Baroda (BoB) has made a proposal to the Union ministry of

finance (MoF) to tap foreign markets for enhancing the bank's equity base.

- International rating agency Standard & Poor's (S&P) has revised its rating

outlook on Bank of Baroda (BoB) to stable from negative.


64/98

2000

- The BoB as launched services such as OmniBoB and BoBCash to help

the customer practice anywhere-banking at 18 branches with the `Smart

Card'.

- Bank of Baroda launched its e-banking products in Chennai.

- Bank of Baroda has joined hands with financial institutions such as

IDBI and ICICI for a speedy recovery of dues from common problem

accounts.

- Bank of Baroda has set up a core support group consisting 500 knowledge

workers from across its branches to help catalyse change management.

- Bank of Baroda has opened its 104th branch in Kalyan and will also offersafe deposit lockers and a housing cell.

- Bank of Baroda has decided that it will hold more than 50 per cent in the life

insurance subsidiary it proposes to set-up.

- Bank of Baroda will launch seven day banking in two branches of Chennaiand Mylapore and K K Nagar, on 17th August.


65/98

- The Bank is exploring strategic tie-ups with local and foreign partners

in the area of insurance, retail lending and Web banking.

- Bank of Baroda and Punjab National Bank will tie up to form a subsidiary for ainto life insurance business.

- Bank of Baroda is in an advance stage of talks with a foreign insurance

company for a life insurance joint venture and is expected to finalise the

tie-up within a fortnight.

- The Bank will introduce 7-day banking at 10 branches in Mumbai from October 8

- Bank of Boarda will introduce `any branch banking' facility to makecustomer transactions at the nearest branch countrywide in the next 18

months.

- The Bank of Baroda has signed up to be a depository participant with CDepository Services (India) Ltd.

2001

- Bank of Baroda proposes to go in for a major drive to expand its ATM network athe country.

- Bank of Baroda is tying up with a US-based IT company to set up the

basic IT infrastructure of the bank at a cost of Rs 300 crore.

- Crisil has assigned an `AAA' rating to the Rs 600-crore sub-ordinated bond issBank of Baroda.

- BANK of Baroda Housing Finance, a subsidiary of the Bank of Baroda,

has disbursed a sum of Rs 50.0 crore to 2578 beneficiaries in rural and

semi-urban areas under the golden rural housing schemes of the

National Housing Bank.


66/98

- BoB has signed a redeployment policy with its Federation Union, affiliated

to the National Confederation of Bank Employees (NCBE) regarding the

transfer of clerical staff.

- Bank (BoB) has lowered interest rates by 25-40 basis points, for FCNR (B)

deposits in force from September 5, for different currencies, effective from

September 17.

-Bank of Barodas (BoB) net profit during the secondre,downfromquahas

126.64 crore in the corresponding period last fiscal.

2002

- GOI nominates N S Mhatre as Director on the Board of Bank of Baroda.

-GOI nominates Anand Sinha on the Board of Bank of Baroda.

-Govt sanctions merger of Benares State Bank with Bank of Baroda.

-Bank of Baroda has informed BSE that the Benares State Bank Ltd now standsamalgamated with the bank wef June 20,


67/98

2002 and branches of erstwhile Benares State Bank Ltd have started

functioning as Bank of Baroda's branches with effect from July 19, 2002.

-Bank of Baroda has informed BSE that the Bank of Baroda (Uganda) Ltd.,

- Subsidiary of the Bank in Uganda has proposed to make Public Offer of 8million equity shares of face value of Ushs.100/- each at an offer price of

Ushs.600/- per share. The offer also involves concessional offer of 200

equity shares per staff member at a price of Ushs.350/-. The offer shall

open on August 26, 2002. The said offer has been approved by RBI.

-Bank of Baroda has informed BSE that the Government of India, Ministry

of Finance, Department of Economic Affairs, Banking Division, New Delhi

has nominated Mr Vinod Rai, Joint Secretary, Ministry of Finance &

Company Affairs, Deptt of Economic Affairs (Banking Division), New Delhi

as Director on the Board of the Bank with effect from October 25, 2002.

-Bank of Baroda elects 4 Directorsthe Director so elected will assume

office w.e.f. today (November 16, 2002) and will hold office till November

15, 2005. 1. Shri Amritlal Sanghvi 2. Dr M J Manohar Rao 3. Shri Pradip N

Khandwalla 4. Shri Prem P Pareek

-RBI grants BoB Capital Markets Ltd. to operate as a primary dealer in Govt.securities market

-Comes out with two special policies for the victims of the communal riots inGujarat

-Decreases its deposit rates by 25 basis points

-IFCI gets Rs 100 cr credit from Bank of Baroda

-BOBCARDS Ltd, a wholly-owned subsidiary of Bank of Baroda, in


68/98

collaboration with Mastercard International, unveils PARAS credit cards

-Tops Non Performing Assets (NPA) list

-Shifts Central Office from Ballard Peir to Bandra

-Unveils flexi-deposit scheme for corporates

-Contributes Rs 1 lakh for repair of Akshardham temple for repairs ofdamages caused by terrorist attacks

-Slashes down deposit rates by 25 basis points

-Reduces its deposit rates by 50 basis points at the longer end deposits

-Brings down floating rate on home loans by 0.75%

-Launches international debit card in alliance with Visa International

-BOB CARDS, a subsidiary of Bank of Baroda, and Cholamandalam

Investment and Finance Company declare a tie-up to issue co-branded

credit cards to Cholamandalam's vehicle finance customers


69/98

2003

-Decreases interest on domestic term deposits by 25-75 basis points acrossdifferent maturities effective January 10,2003

-Gets govt. approval to raise Rs 600 crore through bonds

-Unveils Super Savings Account, savings account with value addedpropositions

-Appoints IBM, H-P, Accenture for Business Process Reengineering (BPR)

-Paves the way for single-window banking across its 2,200 branches in the

country

-Cuts lending rates by 25 bp

-Extends super savings scheme to Coimbatore account holders

-Ties up with Bharat Overseas Bank Ltd. (BOBL) to expand credit cardsbusiness in South India

-Amends interest rates for FCNR(B) deposits

-Picks up 10 pc stake in IFCI's Asset Care Enterprise (ACE)

-Sign MOU with Small Industries Development Bank of India (SIDBI) to co-finance the small scale industries sector

2004

-Mobilizes Rs 300 Cr through Tier II bonds

-Ministry of Finance, Department of Economic Affairs, Banking Division,

New Delhi vide their Notification dated January 09, 2004 has nominated

Shri G K Sharma, Chief General Manager in-charge Reserve Bank of India,


70/98

Dept. of Administration & Personnel Management, Central Office, Mumbai

as Director on the Board of the bank w.e.f. January 09, 2004 in place of

Shri Ramesh Chander, Regional Director, RBI, New Delhi.

-S P Garg is new managing director of Bobcards Ltd, a wholly-ownedsubsidiary of Bank of Baroda.

-Bank of Baroda has informed that the Government of India, Ministry of

Finance, Department of Economic Affairs (Banking Division), New Delhi

vide their notification dated February 4, 2004 has appointed Dr. A K

Khandelwal, Executive Director (ED) of Bank of Baroda as Chairman &

Managing Director (CMD) of Dena Bank.

-The government has chosen Bank of Baroda for channelising government

credit to other countries which runs into billions of dollar

-Ties up with Punjab Tractors for offering finance to farmers for buyingtractors from Punjab Tractors


71/98

-Bank of Baroda signed a memorandum of understanding with L&T JohnDeere Pvt Ltd to prop up farm sector lending.

-Bank of Baroda inks pact with Escorts Ltd, Indo Farm Tractors & Motors Ltdto boost farm lending

-BOB join hands with NIC for non-life insurance products

-Bank of Baroda enters China

-Ties up with Chennai-based Tractor & Farm Equipments Ltd (TAFE) forfinancing their tractors

-Mr T.V. Lakshminarayanan has taken over as the Head of the South Zone,

Bank of Baroda

-Bank of Baroda (BoB) has tied up with Mahindra and Mahindra Ltd (M&M)for tractor financing

2005

- BoB has appointed Dr A K Khandelwal, as the Chairman & Managing

Director (CMD) of the Bank for a period of three years with effect fromMarch 01, 2005 upto March 31, 2008

- Bank of Baroda signs contract with HP India Sales Pvt Ltd for

implementation of Bank's IT enabled Business Transformation Process

-BoB unveils new logo, ropes in Dravid as brand ambassador

-Bank of Baroda inks co-financing agreement with SIDBI

-Bank of Baroda has amalgamated its three sponsored regional rural

banks (RRBs) into single RRB, called Baroda Gujarat Gramin Bank

-BOB signs Memorandum of Cooperation with EXIM Bank


72/98

-BoB unveils campaign on tractor, irrigation advances.

2006

-Bank of Baroda (BOB) has informed that the Bank and Infrastructure

Development Finance Company Ltd (IDFC) have on February 16, 2006,

entered into a Memorandum of Understanding (MOU) to enhance the

provision of financing and other banking products and services to entities

involved in infrastructure development.

-The Bank of Baroda unveiled its first SME loan factory in Pune on Oct 13.

- Bank of Baroda (BOB) has informed that pursuant to powers conferred by

clause (b) of sub-section (3) of section 9 of Banking Companies (Acquisition

and Transfer of Undertakings) Act, 1970, read with sub clause (1) of clause

3 of the Nationalised Banks (Management and Miscellaneous Provisions)

Scheme, 1970, the Government of India, Ministry of Finance, Department of

Economic Affairs (Banking Division) vide their Notification Dated October 31,

2006 have nominated Shri G C


73/98

Chaturvedi, Joint Secretary (B&I) MOF, GOI as Director of the Bank viceShri Vinod Rai with immediate effect.

2007

-Bank of Baroda and India Infrastructure Finance Company Ltd (IIFC) on

January 10, 2007, have entered into an Memorandum of Understanding

(MOU) to enhance the provision of financing and other banking products

and services to entities involved in infrastructure development.

-Bank of Baroda , Andhra Bank and M/s. Legal & General Group plc, UK

have signed an MoU on November 16, 2007 to form a Joint Venture (JV)

for Life Insurance Business.

-Bank of Baroda has appointed Shri. Atul Agarwal as a part time non official

Director on the Board of Directors of the Bank for a period of three years

with effect from November 23, 2007 or until further orders, whichever is

earlier.

2008

-Bank of Baroda has appointed Smt. Shahid as Director on the Board of the

Bank under section 9(3)(h) of The Banking Companies (Acquisition and

Transfer of Undertakings) Act, 1970 vide Government Notification dated

September 15, 2005 for a period of 3 years.

2009

- Bank of Baroda has announced the deposit rate cuts by 50 basis pointsacross all maturities.

- Bank of Baroda has appointed Dr. Masarrat Shahid as part time, non

official director on the Board of Bank of Baroda, for a second term of three


74/98

years w.e.f. October 29, 2009 or until further orders, whichever is earlier.

2010

- Bank of Baroda has appointed Shri N. S. Srinath as an Executive Director

of the bank.

- Bank of Baroda (BoB) has launched a Mobile Micro Loan Factory (MMLF)in Sultanpur district of Uttar Pradesh.

- Bank of Baroda (BoB) has signed a Memorandum of Understanding (MoU)

with the Unique Identification Authority of India (UIDAI).The memorandum

which has been signed between the two organizations would make the bank

to act as a registrar for the enrolment of UID for its existing and future

customers.

- A memorandum of cooperation (MoC) has been signed by Bank of

Baroda (BoB) with the Dubai Multi Commodities Centre Authority (DMCC)

in order to provide value added services to DMCC-registered companies

as well as to enhance the proposition of operating in Jumairah Lake

Towers (JLT) Free Zone.

- Bank of Baroda has informed BSE that in exercise of the powers

conferred by of sub-section 3 (h) and (3-A) of Section 9 of The Banking

Companies (Acquisition and Transfer of Undertakings) Act, 1970 read with

sub clause (1) of clause 3 of The Nationalised Banks (Management &

Miscellaneous Provisions) Scheme 1970, the Central Government vide its

notification dated August 31, 2010, has nominated Shri. Satya Dev Tripathi

as part-time non-official Director of the Bank, for a period of


75/98

three years w.e.f. August 31, 2010 or until further orders, whichever isearlier.

2011

-BoB hikes FD interest rates of diff maturities

-Bank of Baroda hikes Benchmark Prime Lending Rate (BPLR) & Base Rate

2012

-Bank of Baroda hikes interest rates on domestic term deposits by up to2.5%

-Bank of Baroda announced the reduction in home loan rates by 25 basis

points across all the categories for both new and existing customers.

Small Scale Industries

A Small Scale Industrial Unit, is one which is engaged in the manufacture, processingor preservation of goods or is a servicing and repair workshop undertaking repairs ofmachinery used for production, mining or quarrying or custom service unit (except waterservice units), having investments in plant and machinery (original cost) not exceedingRs. 1 Crore.

Bank of Baroda has special Loans and Advances for the purpose of fixed capitalinvestment and also for working capitalrequirement.

Key Benefits

The loans and advances offered by Bank of Baroda for SSI Units can be used for thebasic needs of:

Acquisition of factory, land and construction of building spaces.

Purchase of plant and machinery including lab equipment, testing equipment, etc.

Meeting working capital requirements, like raw materials, stock-in-progress,


76/98

finished goods and for purchase or discounting of bills.

Temporary additional assistance for meeting the urgent needs of raw material.

Additional monitory assistance for any eligible purpose.

Since most of the branches in the extensive network of over 2700 Bank ofBaroda branches and 25 specialised SSI branches, are computerised, the usergets a benefit of anytime, anywhere banking, along with the advantage of severalconsumer driven products.

The loan amount can extend up to a maximum of Rs. 25 Lakhs.

There are also facilities of Credit Guarantee Fund trust scheme for the borrowers:


77/98

o Rate of interest for this will not be more than 3% over the Bank's currentrate.

o No guarantor or collateral security is required.

o These credit facilities are available as a term loan and / or fund basedworking capital facilities (cash credit, overdraft, bills purchased or

Discounted etc.)

o A service charge (guarantee fee) at 2.5% of the credit facility sanctioned ispayable upfront.

o Annual service fee at 1% P.a. on the outstanding loan amount is payable bythe borrower.

o Loans to the software industry up to Rs. 1 Crore are eligible to be treatedas SSI finances. Working capital requirements up to Rs. 5 Crores aregoverned by simple procedures.

o Working Capital Limits are fixed based on the projected annual salesturnover. (However, Projected Turnover should be realistic and in linewith past trends).

o Simplified application and sanction procedure.

o Rate of interest on credit facilities to SSI borrowers will be fixed on softterms through liberal Credit Rating mechanism.

Terms & Conditions

Only the following are eligible as SSI units

o The units that have obtained permanent registration based on the Govt.order dated 10.12.1997 would continue to remain as SSI unit in spite ofthe order dated 24.12.1999 reducing the investment limit to Rs.1 Crore.

o The units that had switched over the SSI status based on the order-dated10.12.1997 would continue to remain as SSI units in spite of the order.

o The units which have got provisional registration with the state authoritiesfor their SSI status would continue to remain as SSI units in spite of theorder dated 24.12.1999 provided the provisional registration had takenplace within the period of limitation of 180 days specified in the order dated

10.12.1997.

o The units that have obtained provisional registration on the basis of theNotification dated 10th December, 1997, and have taken concrete steps forimplementing the project such as preparation of project report, sanction ofloan, purchase of land, civil construction, placement of orders for plant andmachinery, etc., prior to 24th December, 1999 would continue to enjoy theSSI status so long as the investment in plant and machinery does not


78/98

exceed Rs. 3 Crores notwithstanding the revised investment limit of Rs.1Crore notified on 24th December, 1999

Financial Assistance is available for Technologists and Technicians to set up SSIUnits. The eligibility for this is:

o The product is applicable to technically qualified and / or experienced

persons and also craftsmen.

o The product is extended to proprietary concerns, partnership firms, co-operative societies or private limited companies consisting of technologists/ technicians and other with experience in sales, business, finance etc. Thisis provided that they satisfy the Bank that they are not in a position to raisenecessary resources, but can contribute their skills in making the project asuccess.

The main eligibility criteria for this product is that the unit should be a small scaleindustrial unit, which might include artisans, village and cottage industrial units,tiny units in the SSI sector or small scale service establishments engaged inindustrial activities only.

The maximum amount of loan can be till Rs. 25 Lakhs.

No collateral security/ third party guarantee needs to be furnished.


79/98

The charge on assets is created out of the loan amount and the othercollateral securities as determined on the merits of this case.

Loans & Advances

In addition to Working Capital Finance and Term Finance, Bank of Barodahas laid out a comprehensive suit of products specifically catering to SSI(small-scale industries) and Small Business Borrowers.

Loan and advances offered by Bank of Baroda are -

Working Capital Finance

Term Finance

Micro, Small & Medium Enterprises Sector

Baroda SME Loan Pack

Small Business Borrowers

Working Capital Finance

A firm's working capital is the money it has available to meet current obligations (thosedue in less than a year) and to acquire earning assets.

Bank of Baroda offers corporations Working Capital Finance to meet theiroperating expenses, purchasing inventory,receivables financing, either by directfunding or by issuing letter of credit.

Key Benefits

Funded facilities, i.e. the bank provides funding and assistance to actuallypurchase business assets or to meet business expenses.

Non-Funded facilities, i.e. the bank can issue letters of credit or can give aguarantee on behalf of the customer to the suppliers, Government Departments
http://www.bankofbaroda.co.in/bbs/workcapfinance.asphttp://www.bankofbaroda.co.in/bbs/termfinance.asphttp://www.bankofbaroda.co.in/bbs/msme.asphttp://www.bankofbaroda.co.in/bbs/sme.asphttp://www.bankofbaroda.co.in/bbs/profscheme.asphttp://www.bankofbaroda.co.in/bbs/profscheme.asphttp://www.bankofbaroda.co.in/bbs/sme.asphttp://www.bankofbaroda.co.in/bbs/msme.asphttp://www.bankofbaroda.co.in/bbs/termfinance.asphttp://www.bankofbaroda.co.in/bbs/workcapfinance.asp


80/98

for the procurement of goods and services on credit.

Available in both Indian as well as Foreign currency.

UNION BANK OF INDIA

Union Bank of India (UBI) was registered on 11 November 1919 as a limited company in Mumbai and was inaugurated byMahatma Gandhi. At the time of India's Independence in 1947, UBI only had four branches - three in Mumbai and one inSaurashtra, all concentrated in key trade centre

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