I acknowledge with the great gratitude to all those who helped me to make this project a great success. At the very outset, I would like to express my thanks to the almighty who has bestowed upon me the required skill to pursue this course. I greatly express my gratitude for my faculty guide Ms. Dhanya Alex for providing her valuable guidance and assistance throughout the course of this project. I am highly obliged and grateful to Mr. Jacob Mathew (Chief Manager, Federal Bank Chennai Regional Office) for guiding me throughout the project within his busy schedule.
There are various aspects that can affect the profitability of an organization. When it comes to bank Non Performing Assets is one of the major factors which can affect the same. So it is main concern for the bank to take it seriously. Most of the banks have their Asset Recovery Departments that deals with the non-performing assets and also with the settlements that arise. The project was done in The Federal Bank Ltd. , Chennai Regional Office. It is a Private sector bank founded by K. P. Hormis in 1931. It is one of the pioneer private sector banks, which launched Core Banking Solution.
Federal Bank provides a variety of Value Added Services like Insurance, Online trading, Demat, Mutual funds, Cash Management Services etc… The study conducted used descriptive research design and mathematical tool like percentage method to analyze the data collected. Pie charts and bar graphs are used to give the graphical representation of data analyzed. The study is also done on the classification of accounts i. e. category-wise study and then priority wise study. The priority sector was again classified in to its sub categories. The study was mainly on Chennai Regional Bank.
Understanding of the recovery procedures of the bank was one main thing. Other priority sector has the highest NPA level in the region. Each sector is being tried to be improved by the bank and this is a good sign. Even the income from the interest of the loans is being managed by the bank for improvement. The study will help the bank to know how well it is performing in its asset recovery department especially in the doubtful category asset.
Banking has become an integral part of our existence. We cannot even imagine a time when we did not have them. They have made such inroads into our existence at all levels— state wise, national and even international. The rich and the poor, the learned and the illiterate have all their associations with banks, though large groups of them are still beyond their influence or reach. But the democratic set up of our society and its emphasis on social control of institutions like banks, are bound to extend their influence to larger and larger masses. A study of the history of the banks is likewise very comprehensive.
Banks have grown progressively from primitive forms to the ultra modern sophisticated programmes and processes controlling our lives. A clear understanding of some of these developments and processes will pay rich dividends in our comprehension of human ingenuity and resourcefulness. It will also reveal the differences in ideological patterns across international frontiers and barriers. Despite wildly varying elements in behaviours among people separated vastly, geographically and culturally, there has been an amazingly intimate understanding and international co-operation in this field.
It is a surprising revelation of the solidarity of human endeavours in growth. The antiquity of banking transactions, methods of handling and dealing in money in the form of species and documents, the challenges they raised to protect the interests of individuals, communities, nations, governments and ideologies—these form attractive pageants in this fleeting panorama of the history of banks. From immemorial times, banks were involved in agriculture, industry, sanitation, rehabilitation, aesthetics and defence programmes of he communities or nations which had raised them as their organs of service. Indian Banking Industry The growth in the Indian banking industry has been more qualitative than quantitative and it is expected to remain the same in the coming years. Based on the projections made in the ?
Indian Vision 2020? prepared by the planning commission and the draft 10th plan, the report forecasts that the pace of expansion in the balance sheets of the banks is likely to decelerate. Bank assets are expected to grow at an annual composite rate of 13. per cent during the rest of the decade as against the growth rate of 16. 7 per cent that existed between 1994-95 and 2002-03. It is expected that the will be large additions to the capital base and reserves on the liability side. The Indian Banking Industry can be categorised into non-scheduled banks and scheduled banks. There are about 67,000 branches of scheduled banks spread across India. As far as the present scenario is concerned the banking Industry in India is going through a transactional phase.
The public sector banks, which are the base of the banking sector in India account of more than 78 per cent of the total banking industry assets. Unfortunately they are burdened with excessive Non Performing Assets, massive manpower and lack of modern technology. On the other hand the private sector banks are making tremendous progress. They are leaders in Internet banking, mobile banking, phone banking, ATMs. As far as foreign banks are concerned they are likely to succeed in Indian Banking Industry.
With years, banks are also adding services to their customers. The Indian banking industry is passing through a phase of customers market. The customers have more choices in choosing their banks. A competition has been established within the banks in India. With the stiff competition and advancement of technology, the services provided by banks have become more easy and convenient. The past days are witness to an hour wait before withdrawing cash from accounts or cheque from the north of the country being cleared in one month in south.
In the Indian banking industry some of the Private sector Banks operating are IDBI Bank, ING Vyasa Bank, SBI commercial and International Bank Ltd, Bank of Rajastan Ltd. and Banks from the Public sector include Punjab National Bank, Vijaya Bank, UCO Bank, Oriental Bank, Allahabad Bank among others. ANZ Grindlays Bank, American Express Bank Ltd, Citibank are some of the foreign banks operating in the Indian Banking Industry. 10 HISTORY The evolution of the modern commercial banking industry in India can be traced to 1786 with the establishment of Bank of Bengal in Calcutta.
Three presidency banks were set up in Calcutta, Bombay and Madras. In 1860, the limited liability concept was introduced in banking, resulting in the establishment of joint stock banks like Allahabad Bank Limited, Punjab National Bank Limited, Bank of Baroda Limited and Bank of India Limited. In 1921, the three presidency banks were amalgamated to form the Imperial Bank of India, which took on the role of a commercial bank, a bankers‘ bank and a banker to the government. The establishment of the RBI as the central bank of the country in 1935 ended the quasi-central banking role of the Imperial Bank of India.
In order 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 taking over the Imperial Bank of India and integrating with it, the former state-owned and state associate banks. Accordingly, the State Bank of India (? SBI? ) was constituted in 1955. Subsequently in 1959, the State Bank of India (Subsidiary Bank) Act was passed, enabling the SBI to take over eight former state-associate banks as its subsidiaries. In 1969, 14 private banks were nationalised followed by six private banks in 1980.
Since 1991 many financial reforms have been introduced substantially transforming the banking industry in India. INDUSTRY STRUCTURE Prior to 1991, India‘s banking system was almost entirely owned by the Government, with the exception of 22 private sector banks (which were considered too small to be nationalised) and the foreign banks. After the economic crisis in 1991, the process of financial reforms has resulted in the banking system moving from a totally administered sector into a more marketdriven system. This was a result of the recommendations contained in the report of the Narasimham Committee set up in 1991.
In line with the established objectives of the banking sector reforms which include improving the macroeconomic policy framework, improving the financial health and competitive position of banks, building the financial infrastructure relating to supervision, audit technology and legal framework and improving the level of managerial competence and quality of human resources, the reforms include progressive tightening of prudential norms for asset quality and capital adequacy in line with international norms, deregulation of interest rates, reducing the statutory co-option of bank deposits to finance Government deficits, liberalising the entry norms for new intermediaries, and the development of new institutions (for trading,clearing and settlement of debt market transactions, forex and derivative instruments, credit information bureaus and asset reconstruction companies).
The key drivers for this success within the Indian Banking sector 11 ave been a clear focus on the emerging opportunities in retail banking, technology architecture, relationship-based approach in Corporate/Treasury, Capitalisation and a Quality Management Team. The formal banking system in India comprises the RBI, Commercial Banks, Regional Rural Banks and the Cooperative banks. In the recent past, private non-banking finance companies also have been active in the financial system, and are being regulated by the RBI.